~

VIKAS"

INDUSTRIAL RELATIONS AND

SIXTH REVISED EDITION

S C Srivastava
INDUSTRIAL RELATIONS AND
LABOUR LAWS
INDUSTRIAL RELATIONS AND
LABOUR LAWS

Suresh C Srivastava

~
VI~
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ISBN: 978-93-259-5540-0
Vikas® is the registered trademark ofVikas Publishing House Pvt Ltd
First Published in 1982
Sixth Edition: 2012
Copyright© SC Srivastava, 2012

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This book is dedicated to the memory of my Grand Uncle and Grandfather,

Late Mr Jai Mangal Prasad

Late Dr Mata Prasad

My Parents,

Late Mrs and Dr SR Varma

My respected teacher,
Late Professor Anandjee

whose blessings inspire me

This book is also dedicated to my wife,

Late Mrs Vinodini Kumari
 PREFACE TO THE SIXTH EDITION

Labour law seeks to regulate relations between an employer or a class of employers and their
workmen. The reach of this law is so wide that it touches the lives of millions of men and
women who constitute the labour force. However, it is unfortunate that barring a few statutes
such as the Minimum Wages Act, 1948 and the recently enacted Unorganized Workers Social
Security Act, 2008, most labour laws are, in effect, not applicable to unorganized labour
which constitutes about 93 per cent of the entire labour force. Further, most labour legislation
is more than 6 decades old. It is felt that our labour laws are over-protective, over-reactive,
fragmented, outdated and irrelevant and have created hurdles in achieving economic
targets, particularly given the global competition and economic recession. The emergence
of globalization, liberalization and privatization has further brought new challenges. There
is therefore, mounting pressure to reform labour laws. In view of this, the First and Second
National Commissions on Labour and the National Labour Law Association made a series of
recommendations to remove the irritants and stumbling blocks but barring some legislative
amendments in recent years, no major reforms have been undertaken to give legislative
shape to the recommendations of the Commissions.
Since the fifth edition of this book was brought out, much water has flown under the
bridge in the area of labour laws and industrial relations. In the legislative sphere, the most
notable development was the amendment in the Industrial Disputes Act, 1947 in 2010. The
Amended Act has (i) expanded the definition of 'appropriate government' under Section
2(a); (ii) raised the wage ceiling of a supervisor from fl,600 to fl0,000 per month under
Section 2(s); (iii) provided direct access to the workman to labour court/tribunal in cases
of disputes arising out of Section 2A; (iv) expanded the scope of qualifications of presiding
officers of labour courts or tribunals under Sections 7 and 7A; (v) provided for grievance
redressal machinery in every industrial establishment employing 20 or more workmen for
the resolution of disputes arising out of individual grievances; (vi) empowered the labour
court/tribunal to execute awards/settlements/orders.
Apart from the above, a survey of judgements delivered by the Supreme Court and
high courts reveals that there has been a marked shift in the approach of the Indian judiciary
in the area of discipline and disciplinary procedure. Further, new norms have been evolved
to determine whether a person is a workman. Moreover, post 2005, the Supreme Court has
generally held that relief by way of reinstatement with back wages is not automatic even
if termination of an employee is found to be illegal or in contravention of the prescribed
procedure and in such cases, compensation in lieu of reinstatement may be appropriate.
However, in two cases reported in 2010, the Supreme Court felt that the approach of the
courts must be compatible with the constitutional philosophy of which the Directive
Principles of State Policy constitute an integral part and justice due to the workman should
not be denied by entertaining spurious and untenable grounds put forward by the employer
(public or private). Whatever may be the justification for the aforesaid line of approach, the
law has become uncertain on this issue. Further, the requirement of notice for strike/lock-
out in public utility services under Section 22 received a new interpretation in 2008, which
appears to be contrary to the legislative scheme and has added to uncertainty on this subject.
Moreover, in 2006 the Supreme Court has held that daily /casual/temporary /contract
workers employed in public employment could not claim regularization but in 2010-2011,
it laid down that this principle did not apply in labour disputes. In fact courts even refused
to apply this principle where the plea that the affected worker was not employed in public
employment through the proper selection procedure, was not taken before the tribunal.
viii • Preface

In view of the above, a need was felt to bring out the sixth edition of this book. This
edition has not only been extensively revised and updated to cater to the needs of labour
lawyers, managers, public administrators and labour tribunals, but has also widened the
scope and dimensions of the book. Thus, Chapter 1 now includes judicial legislation on labour
law, review of labour laws and labour reforms along with a look at the International Labour
Organization and its influence on Indian labour laws. Chapter 2 (a new chapter) provides
an overview of industrial relations. Chapter 3 includes a new section on regulation of daily/
casual/contract/temporary workers. Chapter 4 now includes the objectives, composition
and functioning of employers' organizations. Chapter 15 includes a new section on current
approaches of the Supreme Court on interpretation of Section 2(s). Chapter 21 which is now
titled 'Management of Discipline' also includes the procedure for conducting a domestic
inquiry and precautions to be taken by disciplinary authority in awarding punishment.
The book has been divided into five parts. Part I provides the contextual and
constitutional framework of labour law. Part II briefly sketches the trade union movement
and employers' organizations and also examines the laws relating to trade unions, collective
bargaining, unfair labour practices and victimization. Part III deals with regulation of
industrial disputes including the arena of interaction and participants. It also provides the
framework of persuasive, coercive and voluntary processes for settlement of industrial
disputes and governmental power under the Industrial Disputes Act. This part examines
the laws relating to instruments of economic coercion, which has brought within its fold
strikes, picketing, gherao and lockouts. It also examines the laws regulating management of
discipline and the management's prerogative during pendency of proceedings and change
in conditions of service. Moreover, it examines laws relating to lay-off, retrenchment,
transfer and closure. Part IV deals with standing orders in the light of statutory provisions
and judicial decisions. Part V seeks to delineate the functioning of workers' participation
in management.
It is hoped that the book will receive appreciation from lawyers, managers, officials
of the labour department, labour judiciary and students.
At the end, I wish to place on record my gratitude for the support and encouragement
received from my daughters Reena, Rachna and Simmi and sons-in-law Manoj Khare and
Sumit Sahay. I cherish the love and affection received from my granddaughters Eesha,
Somya, Shivika and Sanvi. I also wish to express my sincere thanks to M/ s Vikas Publishing
House, New Delhi for their keen interest and skilled editorial inputs for the publication of
the present edition of the book.

Suresh C Srivastava
 CONTENTS

PREFACE VII

LisT OF Cases xvii

PART I INDUSTRIAL RELATIONS AND LABOUR LAWS

CHAPTER 1 Introduction to Labour Law 3
Approach to Labour Law 3
Basis of Labour Law 4
Social Justice and Labour Law 4
Public Interest Litigation for Enforcement of Labour Laws 7
International Labour Organization and its Influence on
Indian Labour Laws 7
Review of Labour Law by the First National Commission on Labour 10
Review of Labour Law by the Second National Commission on Labour 11
Approaches of Indian Judiciary and Judicial
Legislation on Industrial Relations 12
Labour Reforms: Review of Labour Law 14
CHAPTER 2 Industrial Relations: An Overview 19
The Contextual Framework 19
Dimensions of the Problems of Industrial Relations 20
Industrial Unrest and Work-Stoppages 21
Unemployment and Underemployment as
Barriers to Improving Industrial Relations 22
Other Difficulties in Healthy Growth of
Industrial Relations through Labour Law Policy 23
Scope and Concept of Industrial Relations 27
Industrial Relations vis-a-vis Human Relations Management 28
Objectives of Industrial Relations 28
Role of the State in Industrial Relations 29
Changing Dimensions of Industrial Relations in India 30
Impact of Globalization and the WTO Regime on Industrial Relations 30
Five-year Plans and Industrial Relations 31
CHAPTER3 Constitutional Framework on Industrial Relations 37
Constitutional Perspective 37
Constitutional Amendments on Right to Free and Compulsory
Education 41
Contribution of Indian Judiciary in Evolution of Industrial
Jurisprudence Through Constitutional Interpretation 42
Sexual Harassment of Women at Workplace and the Constitution 45
Constitutional Validity of Service Contracts and Standing Orders 48
Regulation of Daily Wager /Casual Workers or Contract
Labour /Temporary Workers in Public Employment 52
x • Contents

PART II TRADE UNIONS AND LAW

CHAPTER 4 Trade Unions of Workers and Employers' Organizations:
A Contextual and Historical Analysis 57
Need to Form Trade Unions 57
Right to Form Trade Unions 57
History of the Trade Union Movement in India 57
Existing Strength of Central Trade Unions 68
Current Issues 69
Closed Shop /Union Shop 70
Employers' Organizations 70
CHAPTER 5 Judicial Delineation of Statutory Definition of
Trade Union and Trade Dispute 75
The Definition 75
Members of Trade Unions 76
Trade or Industry 79
Objectives of Trade Unions 81
Trade Dispute 81
CHAPTER 6 Registration of Trade Unions 83
Legal Status of Registered Trade Unions 83
Compulsory Versus Voluntary Registration 84
Appointment of the Registrar 84
Mode of Registration 85
Powers of the Registrar 88
No Power of the Registrar to Verify Membership of Trade Unions 88
Power to Conduct Election 89
No Power to Hold Inquiry 90
No Power to Decide Rival Claims 90
No Power to Decide Regarding Admission of Membership 91
Duties of the Registrar 92
Certificate of Registration: A Conclusive Evidence 95
Minimum Requirement for Membership of a Trade Union 95
Cancellation and Deregistration of A registered Trade Union 95
Appeal 97
The Result of Deregistration 98
Re-registration 98
Registered Office 99
Change of Name, Structure and Dissolution 99
Submission of Returns 100
Penalties and Procedure 101
CHAPTER 7 Members, Office Holders and Outsiders in Trade Unions 103
Some Disturbing Aspects of Outsiders in the Union 103
Rights of Minors to Membership of Trade Unions 103
Outsiders in the Union Executive and the Law 104
 Contents • xi

Disqualification of Office-Bearers 105

Ceiling on Holding Offices in Trade Unions 106
Tenure of Elected-Bearers/Members of Executive 106
Rights And Duties of Office-Bearers and Members 106
Transfer of Office-Bearers of Trade Union 108
Inter-Union and Intra-Union Rivalries 109
CHAPTER 8 Trade Union Finances and Funds 111
Factual Review 111
Membership Subscription: Law's Response 112
General Fund: Purposes for Which it May be Spent 114
Political Fund: Nature and Effect of Non-Contribution 116
CHAPTER 9 Privileges of Registered Trade Unions 117
Immunity from Criminal Conspiracy 117
Immunity From Civil Actions 121
Enforceability of Agreements 127
Termination at the Instance of Union 127
CHAPTER10 Recognition of Trade Unions 129
The Need For Recognition of Trade Unions 129
Recognition of Trade Unions In Retrospect 129
Law and Practice Relating to Recognition of Trade Unions 132
CHAPTER 11 Collective Bargaining 147
The Perspective 147
ILO Principles on the Right to Collective Bargaining 148
Concept and Meaning of Collective Bargaining 148
Prerequisites for Collective Bargaining 150
Advantages and Disadvantages of Collective Bargaining 152
Collective Bargaining in India 152
CHAPTER 12 Unfair Labour Practices and Victimizations 157
Unfair Labour Practices on the Part of Employers under
the Trade Unions (Amendment) Act, 1947 157
Unfair Labour Practices on The Part of Trade Unions
under the Trade Unions (Amendment) Act, 1947 157
Judicial Delineation of 'Unfair Labour Practice' 158
Code of Discipline in Industry 158
Response of The [First] National Commission on Labour 159
Unfair Labour Practices on the Part of Employers
and Trade Unions of Employers under The
Industrial Disputes (Amendment) Act, 1982 159
Unfair Labour Practices on the Part of Workmen
and Trade Unions of Workmen under The
Industrial Disputes (Amendment) Act, 1982 162
Proof of Unfair Labour Practice 163
xii • Contents

Victimization 163
Scope of Interference by Industrial Tribunal 165

PART III INDUSTRIAL DISPUTES ACT, 1947

CHAPTER 13 Industrial Disputes Act: A Contextual Framework 169

Object of the Act 170
Scheme of the Act 171
Industrial Disputes (Amendment) Act 1982 and 1984 172
Trade Unions and The Industrial Disputes
(Amendment) Bill, 1988 173
Industrial Disputes (Amendment) Act, 2010 174
Scope of the Act 174
Interpretation of Industrial Relations Law 175
No Jurisdiction of Civil Court in Industrial Dispute 175
CHAPTER 14 Concept and Scope of Individual and Industrial Disputes 179
Industrial Dispute 179
Individual Dispute 191
Legislative Response : Insertion of Section 2A 199
No Time Limit Prescribed 202
Recommendation of The [Second] National
Commission on Labour 202
Remedy to Individual Workman under Section 2A
Prior to 2010 Amendment 203
Amendment of Section 2A by the Industrial Disputes
(Amendment) Act, 2010 203
CHAPTER 15 Arena of Interaction and Participants in Industrial Disputes 205
Industry 205
Bangalore Water Supply and Sewerage Board Case 207
Response of the (First) National Commission on Labour 230
Parliament's Disapproval of Judicial Response 231
Current Confusion 234
Re-examination of the Decision in Bangalore Case 238
CHAPTER 16 Workmen 241
Definition
Tests for Determination of Supervisory Capacity 251
Specific Cases 259
Current Approach of the Supreme Court on the Interpretation of Section 2(S) 268
Recommendations of the (Second) National Commission on Labour 269
Employer 269
CHAPTER 17 Settlement of Industrial Disputes 271
Works Committee 271
Grievance Settlement Authorities 275
Court of Inquiry 297
 Contents • xiii

Voluntary Arbitration 298

Processes Involved in Reference of Dispute to Voluntary Labour Arbitrator 298
Adjudication 306
Award 321
Non-Statutory Machinery and its Working 353
CHAPTER18 Powers of the Appropriate Government 361
Government's Power of Reference 361
Power of the Government to Withdraw and
Transfer Certain Proceedings 392
Government's Power to Refer any Question
for Interpretation of the Award 392
Power to Make Rules 394
Delegation of Power 395
Power to Amend Schedules 396
Power of the Government to Exempt 396
CHAPTER 19 Instruments of Economic Coercion 397
Strike 397
Picketing 408
Gherao 411
Bandh 412
Lockout 414
Right to Strike 422
Right to Lockout 438
Regulation of Strikes and Lockouts 439
Illegal Strikes and Lockouts 456
Sanctions and Criminal Proceedings 456
Justification of Strike and Lockout 459
Dismissal Of Strikers 463
Wages For Strike and Lockout Period 466
CHAPTER 20 Lay-off, Retrenchment, Transfer and Closure 473
Lay-Off 473
Retrenchment 487
Transfer and Closure of the Undertaking:
Prevention and Regulation 535
CHAPTER 21 Management of Discipline and Disciplinary Procedure 559
Regulation of Management's Prerogative of
Disciplinary Action: The Context 559
Meaning and Scope of Misconduct 562
Nature and Concept of Dismissal and Discharge 563
Discharge Simpliciter or Dismissal in Disguise:
Courts' Power to Lift the Veil 564
Domestic Inquiry 576
Right to be Defended by a Lawyer in Domestic Inquiry 582
xiv • Contents

Right of Representation in Disciplinary Proceedings

through Co-employees 583
Applicability of the Evidence Act 585
Domestic Inquiry Pending Criminal Proceedings 585
Can Deparbnental Proceedings be Continued
against the Delinquent in Case of his Acquittal by Criminal Court 587
Effect of Delay in Conduct of Inquiry 590
Power to Conduct Inquiry Afresh 590
Non-Supply of Inquiry Report 591
Domestic Inquiry Found Defective-Date of its Effect 594
Power of Labour Courts, Tribunals and National Tribunals to Give
Appropriate Relief in Case of Discharge or
Dismissal of Workman 595
Discriminatory Treabnent 621
Relief to Wrongfully Dismissed Workmen 623
CHAPTER 22 Management's Prerogative During the Pendency of
Proceedings and Notice of Change 635
Section-I 635
Legislative Development and the Present Legislation 635
Object of Section 33 637
Requirements under Section 33 637
Scope of Inquiry under Section 33 638
Alteration in the Conditions of Service 640
Misconduct not Connected with Pending Dispute:
Section 33(2)(B) 642
Protection of Union Official under Section 33 652
Section 33-A: The Remedy to an Aggrieved Workman 653
Section-II 657
Change In Conditions of Services: Notice of Change 657
PART IV STANDING ORDERS

CHAPTER 23 Contextual Frame-Work of the Industrial

Employment (Standing Orders) Act, 1946 665
Constitutional Validity of Automatic Termination of
Service under Standing Orders 667

CHAPTER 24 Scope and Coverage of the Industrial Employment

(Standing Orders) Act, 1946 669
Coverage of the Act 669
Workers Covered 673
Employer under the Act 673
CHAPTER 25 Concept and Nature of Standing Orders 675
The Concept of Standing Orders 675
II. Nature of the Standing Orders 677
 Contents • xv

CHAPTER 26 Certification Process-Its Operation and Binding Effect 683

Submission of Draft Standing Orders by Employers 683
Conditions for Certification of Standing Orders 683
Procedure for Certification of Standing Orders 687
Certifying Officers: Their Appoinbnent,
Jurisdiction, Powers and Duties 687
Appeals Against Certification 689
Date of Operation of Standing Orders or Amendments 690
Binding Nature and Effect of Certified Standing Orders 690
Posting of Standing Orders 693
CHAPTER27 Modification and Temporary
Application of Model Standing Orders 695
Modification of Standing Orders 695
Temporary Application of Model Standing Orders 698
CHAPTER 28 Interpretation and Enforcement of Standing Orders 699
Interpretation of Standing Orders 699
Penalties and Procedure 705
Remedies for Enforcement of Rights and Liabilities
Created under the IESOA 705
Inspection Machinery 706
CHAPTER 29 Role of Government under the IESOA 707
Concept of the 'Appropriate Government' 707
Delegation of Power 707
Power of the Government to Make Rules 708
Time-Limit for Completion of Domestic Inquiry 709
Payment of Subsistence Allowance 709
PART V WORKERS' PARTICIPATION IN MANAGEMENT

CHAPTER 30 Workers' Participation in Management 715

Introduction 715
Constitutional Commibnent 716
Concept and Scope 716
Statutory and Non-Statutory Schemes 718
Making Workers Shareholders 722
Representation of Workers on Board of Directors 722
Workers' Participation in Winding up Operation 724
Workers' Right to Run Sick Industries 725
Participation of Workers in the Management Bill, 1990 725
Steps Taken During 1996-97 730
An Evaluation 730
INDEX 731
 LIST OF CASES

A
A C C Rajanka Lime Stone Quarries Mazdoor Union v. Registrar of Trade Unions, AIR 1958 Pat. 475, 92
A C Mukerjee v. Union of India, (1972) 2 LLJ 1978 (Calcutta), 132
A G Kher v. Atlas Copco (India) Ltd, (1992) lLLJ 423, 127
A G Mazdoor Sangh v. Indian Air Gases Ltd, (1977) 2 LLJ 503 (Allahabad), 687
AL Kalra v. Project & Equipment Corporation of India, 1984 LIC 961 (SC), 581
ALP Hindustan Zinc Ltd v. HZ Workers' Union, (1988) Lab. IC 1361, 295
AM Sainalabdeen Musaliar v. District Collector, (1994) Lab. IC 57,321
A P Electrical Equipment Corporation v. Its Staff Union (1986) Lab. IC 1851, 438,454
A Rodrick v. KC Thapar, (1963) 1 LLJ 248 (SC), 563
A Sundarambal v. Government of Goa, Daman and Diu, (1988) 4 SCC 42: 2012 LLR 26,214,267
A V Nachane v. Union of India AIR 1982 SC 1126: (1982) 25CF 1246 (1982) 1 SCC 205,497
Abdul Khalil St. Bharu v. Commission of Labour, Nagpur, 1997 Lab. IC 122 (Born), 202
Abdul Rahiman Haji v. Abdul Rahiman 1980 Lab. IC 910,389
Abdul Salem v. State of Tamil Nadu, (1973) 43 FJR 180 (Madras), 375
Abdul Wahab Shaikh Lai Bhai v. GE Patankar, (1980) Lab. IC 623 (Bombay), 230
Addl. Chancellor, Farmers Service Cooperative Bank v. Labour Court, (1996) LLR 654 (Kerala), 313,314,598
Administrator, Union Territory of Dadra and Nagar Haveli v. Gulabhia M Lad, 2010 (125) FLR 880 (SC), 582
Aeron Steel Rolling Mills v. State of Punjab, (1959) 1 LLJ 73 (Punjab), 392
Aftab-e-jadid, Urdu Daily Newspapers v. Bhopal Shramjivi Patrakar Sangh, (1985) 1 LLJ 272,301
Agra Electric Supply Co. v. Aladin, (1969) 2 LLJ 540 544 (SC): AIR 1970 SC 5 13,340, 665, 692
Agriculture Produce Market Committee v. Ashok Harikuni, AIR 2000 SC 3116: (2000) 2 LLJ 1382, 211
Ahmedabad Mfg. & Calico Ptg. Co. v. Ramtahel, AIR 1972 SC 1598, 351
Ahmedabad Pvt. Primary Teachers Association v. Administrative officer, (2004) 1 SCC 755, 262
Ahmedabad Textile Industry Research Association v. State of Bombay and Others, AIR 1978 SC 548,591,215
Ahmedabad Textile Industry Research Association v. State of Bombay, (1960) 2 LLJ 720 (SC), 125, 215, 216
Air Corporation Employees' Union v. D V Vyas, (1962) 1 LLJ 31 (Bombay), 302
Air Gases Mazdoor Sangh v. Indian Air Gases Ltd, (1977) 2 LLJ 503, 505 (Allahabad), 688
Air India Cabin Crew Association v. Union of India, (2012) 1 SCC 619,257
Air India Corporation Bombay v. VA Rehellow, (1972) 1 LLJ 501, 627, 652
Air India Statutory Corporation v. United Labour Union, (1997) 9 SCC 377,368
Ajanta Industries v. Central Board of Direct Taxes, AIR 1976 SC 437, 389
Ajit Kumar Nag v. General Manager (PJ) Indian Oil Corporation Ltd, (2005) 7 SCC 764, 587
Akhil Raj Rajya Hand Pump Mistries Sangthan v. State of Rajasthan, (1994) Lab. IC 345,230
Akhil Ranjan Das Gupta v. State of Assam, (1965) 2 LLJ 614,680
Alexandra Jute Mills Ltd v. Their Workmen, (1950) ILLJ 1261, 158, 186
Alien Macgregor Smith Forge v. First Industrial Tribunal, (1963) 1 LLJ 556 (Calcutta), 213
Aligarh Muslim University v. Mansoor Ali Khan JT 2000 (7) SC 529: 2000) 5 SCC 65, 51, 611
All India Bank Employees Association v. National Industrial Tribunal, (1961) I LLJ 375: AIR 1962 SC 171,
57,132,423,431
All India Bombay Tyres International Employees' Federation v. CB Dinagre (1993) Lab. IC 817, 281
All India Radio v. Santosh Kumar and Another, (2003) LLR 9,238
All India Reserve Bank Employees' Association v. Reserve Bank of India, AIR 1966 SC 305: (1965) 2 LIJ 178,
189,190,250
Allahabad District Cooperative Bank Ltd v. Vidhya Varidh Mishra, (2004) 6 SCC 482,587
Allen Berry & Co. Ltd v. Their Workmen, (1951) 1 LLJ 228 (LAT), 327
Alloy Steel Project Company v. Their Workmen, (1971) 1 LLJ (SC), 483
xviii • List of Cases

Alumina Mazdoor Sangh v. Ratna Construction Co. and Others (2003} LLR 382, 506
Amal Kumar Parial v. Union of India, (1989) ATC 679,581
Amalendu Gupta v. LIC, (1982) 2 LLJ 332 (Calcutta}, 424,470
Amar Jyoti School v. Govt. ofNCT, (2009) 122 FLR 354,261
Amar Singh v. State of Rajasthan, AIR 1955 SC 504, 348
Ambabai Manjunath Amin v. P L Majumdar, (1987) 1 LLJ 36 (Bombay}, 336
Ambica Mills Ltd v. Second Labour Court, (1967} 2 LLJ 800 (Gujarat}, 338
Ambika Jute Mills v. Their Workers, (1954) 1 LLJ 835 (IT), 459,460
Ambika Singh v. UP State Sugar Corpn. Ltd (1991) I LLN 490,498
Ameteep Machine Tools v. Labour Court, (1980} 2 LLJ 453 (SC}, 319
Amulya Ratan Mukkerjee v. Deputy Chief Mechanical Engineer, Eastern Railways, AIR 1961 Cal 40, 572
Anakapalla Cooperative Agricultural & Industrial Society v. Its Workmen (1962} 2 LLJ 621 (SC, 253,270,538
Anameinuger Development Corporation Ltd v. Second Industrial Tribunal, (1986) Lab. IC 1741, 253
Anand Bazar Patrika (Pvt.) Ltd v. Its Workmen, (1969) 2 LLJ 670 (SC}, 250
Anand Bihar v. Rajasthan State Road Transport Corporation, Jaipur (1991} Lab. IC 494, 503
Ananda Bazar Patrika v. Their Employees, 1963 2 LLJ 429, 165
Anandam v. Tamil Nadu Electricity Board, 1997 LLR 247, 590
Anando Chandra Swam v. State of Orissa, (1973) 1 LLJ 508 (Orissa}, 229
Ananthanarayanan v. SR, (1956) 1 LLJ 29 (Madras}, 572
Andhra Pradesh Electrical Equipment Corporation, Hyderabad v. Andhra Pradesh Electrical Equipment
Corporation Staff Union 1986 Lab. IC 1851 (AP}, 423
Andhra Scientific Co. Ltd v. A Sheshagiri Rao, AIR (1967) SC 408: 1959) 2 LLJ 551,349,563,638
Anil Bapurao Kanase v. Krishnq Sahkari Sakkar Karkhana Ltd (1998} I LLJ 343, 502
Anil Giluker v. Bilaspur-Raipur Gramin Bank, 2011 LLR 1121 (SC}, 573, 582
Anil Kumar Chakraborty v. Saraswatipur Tea Co. Ltd, (1982} 2 SCC 328; 1982 SCC (L&S} 249; AIR 1982
SC 1062,628
Anil Sood v. SK Sarvaria, (1997) LLR. 386,342
Ankulaiah v. DG, P&T, SLJ (1986} CAT 407,580
Annamalai Timber Trust Ltd (1950) LLJ 994 (IT), 473, 535
Anoop Sharma v. Executive Engineer Public Health Division, Panipat 2010 (4) SCALE 203, 53,505,508,523
Antony v. Kumaran, (1979) 1 LLJ 606, 545
AP SRTC v. Raghuda Siva Sankar Prasad, (2007) 1 SCC 222; (2007) 1 SCC (L&S} 151; AIR 2007 SC 152,628
Apparel Export Promotion Council v. AK Chopra, JT 1999 (1) SC 61: (1999} 1 SCC 759, 47
APSWL Co-operative Society Ltd v. Labour Court, 1987 Lab. LC 642 at 649 (SC}, 41
Arun Mathur v. Labour Court 1993 1 C.L.R. 467,497
Aruna Mills Company Ltd v. Textile Labour Association, (1951) lLLJ 647,486
Ashok Kumar Sharma v. Oberoi Flight Services (2010) 1 SCC 142, 633
Ashok Leyland Ltd v. State of Tamil Nadu, (2004) 3 SCC 1,339
Ashok Leyland Ltd, Madras v. Presiding Officer, Second Additional Labour Court, Madras 2003 LLR 784,699
Ashok Textile Pvt. Ltd v. Their Employees, 461,469
Assam Chah Karmachari Sanagha v. Dimakuchi Tea Estate, AIR (1958) SC 353, 186
Assam Oil Co. Ltd v. Its Workmen, (1960} 1 LLJ 587, 560, 561, 563, 591
Associated Cement Co. Ltd v. Cement Staff Union 2010 LLR 162, 16, 660
Associated Cement Co. Ltd v. TC Srivastava (1984) 2 LLJ 105, 702
Associated Cement Co. Ltd v. Their Workmen, (1952) 2 LLJ 255 (IT}: AIR 1970 SC 177,196,460,461,483
Associated Cement v. PD Vyas, AIR (1960} SC 665, 685
Associated Electrical Industries (India) Private Ltd v. The Workmen, (1961} 2 LLJ 123 (SC}, 392
Association Cement Co. Ltd, v. Their Workmen, (1953) 2 LLJ 369,328
 List of Cases • xix

Association of Engineering Workers v. Dockyard Labours, (1992) 1 Lab. IC 214, 97,520

Athani Municipality v. Labour Court, AIR 1969 SC 1335, 335
Atherton West & Co. Ltd v. Suti Mill Mazdoor Union, AIR 1953 SC 241, 638
Atlas Cycle Industries Ltd v. State of Punjab, (1962) 1 LLJ 536 (Punjab), 394
Atlas Cycle Industries v. P V Thukral (1971) Lab. IC203, 205 (Punjab and Haryana), 201
Authority of India19 and Ajay Hasia v. Khalid Muzib Sehravardi, (1981) 1 SCC 722,369
Automative Manufacturing Ltd v. Member, Industrial Court 1993 Lab. IC 534, 710
Automobile Products of India Ltd v. Rukmaji Bala. AIR (1955) SC 258,637,655
Avon Services (Production Agencies) Pvt. Ltd v. Industrial Tribunal, (1979) 1 LLJ 1 (SC), 376,388,384,543
Avtar Singh Anand v. Krishna, (1969) 2 LLJ 524 (Delhi), 545

B
BC Chaturvedi v. Union of India 1984 Lab IC 658, 613
B Chinna Rao v. Naval Civilian Employees Union, 2011 (1) SLR 375,273
B Jateshwar Sharma v. Director of Education, (1985) Lab. IC 414 (Gujarat), 228
B L C Ltd v. Ram Bahadur Jamadar, (1957) 1 LLJ 422 (LAT), 249
BR Singh v. Union of India (1990) Lab IC 389,424,436
B S V Hemantha Rao v. Deputy Registrar, Trade Union, (1988) 1 LLJ 83 (AP), 87
Babu Lal v. Haryana State Agricultural Marketing Board 2009 LLR 936 (SC), 589
Babula[ v. Collector, AIR (1956) M.B. 221,350
Badarpur Power Engineers' Association v. Dy. Chief Labour Commissioner (1993) Lab. IC 636,689
Bagalkot Cement Co. v. R K Pathan, AIR 1963 SC 439,676,678
Bagga Singh v. Distt. Magistrate, AIR 1955 Assam 83,389
Balakrishna Pillai v. Anant Engineering Works Pvt. Ltd, (1975) 2 LLJ 391, 669
Balkrishna v. LT Commissioner, AIR 1954 Madras 1118, 350
Balkrishna v. Ramaswami, AIR (1965) SC 195,352
Balmer Lawrie & Co. Ltd v. Its Employees' Union, (1989) Lab. IC 88 (Bombay), 439
Balmer Lawrie Workers' Union v. Balmer Lawrie & Co. Ltd, (1985) Lab. IC 242, 113
Banaras Electric Light & Power Co. vs Labour Court, (1972) 2 LLJ 328 (SC), 563
Banaras Ice Factory Ltd v. Their Workmen, (1957) I LLJ 253 (SC), 494
Bangali Raje v. Union of India, (1993) Lab. IC 812, 272
Bangalore Silk Throwing Factory v. Its Workmen, (1957) 1 LLJ 435 (LAT), 465,560
Bangalore W C and Mills Co. v. Their Workmen, (1968) 1 LLJ 514 at 518, 183
Bangalore Water Supply & Sewerage Board, (2002) (9) SCC 652, 265
Bangalore Water Supply and Sewerage Board case, AIR 1978 SC 548, 80,218
Bangalore Water Supply and Sewerage Board v. Rajappa, AIR 1978 SC 548,207,211,213,221,222,224,225
Bank of Baroda v. Ghemarbhai Harjibhai Rabri 2005 LLR 443 (SC), 513
Bank of India v. Apurba Kumar Saha, (1994) SCC 615, 580
Bank of India v. Bhimsen Gochhayat 2010 LLR 113 (SC), 588, 589
Bank Of India v. Dagala Suryanarayana, 1999 LLR 1073 (SC), 582
Bank of India v. T S Kelawala and SU Motors (P) Ltd v. Their Workmen (1990) 2 LLJ 39,470
Bar Association Canteen v. Chief Commissioner, Delhi, (1967) 2 LLJ 227 (Delhi), 212
Barium Chemicals Ltd v. Company Law Board, AIR 1967 SC, 295,374
Baroda Borough Municipality v. Its Workmen, AIR 1957 SC 110,206
Barsi Light Railway Co. Ltd v. Joglekar, (1957) 1 LLJ 243 (SC), 421,535
Barsi Light Railway Company v. Joglekar (KN), (1957) SCR 121,490,494
Basant Lal v. Div. Mechanical Engineers (G.W.) Rly Kathiar, (1977) (3) LLJ 154 (Patna), 229
Bata Shoe Co. (P) Ltd v. Ganguli (D N), AIR 1961 SC 1158, 185,288,298,465,466,559,622,625
xx • List of Cases

Bata Shoe Co. v. Its Workmen, (1956) 1 LLJ 278, 654

Beedi Factory v. Their Employees, (1950) LIJ 207, 135
Behar Journals Ltd v. Ali Hasan, AIR 1959 Pat. 431, 678
Bengal Bhatdee Coal Co. v. Ram Pradesh Singh 1963 1 LLJ 234 (SC}, 166, 625
Bengal Chemical & Pharmaceutical Works Ltd v. Their Employees, AIR 1959 SC 633,352,353
Bengal Coal Company Ltd v. Central Government Industrial Tribunal, (1962} 2 LLJ 414 (Patna}, 393
Bengal Immunity Co. v. State of Bihar, (1955) 2 SCR 603,350
Bengal Jute Mills v. Their Workmen, (1950) LLJ 437 (IT}, 415
Bengal United Tea Co. Ltd, (1962) 2 LLJ 376 (SC}, 654
Bharat Bank Ltd v. Employees of Bharat Bank Ltd (1950) LLJ 921: AIR (1950) SC 188,164,352,353
Bharat Bank v. Employees of Bharat Bank, AIR (1950) SC 188,352,353
Bharat Barrel and Drum Mfg. Co. v. Their Workmen, (1952) 2 LLJ 532 (IT}, 418,461,469
Bharat Bhawan Trust v. Bharat Bhawan Artists' Association, (2001} 7 SCC 630,261
Bharat Bhushan v. State of Industrial Tribunal, 6 FJR 278 (Allahabad}, 392
Bharat Forge Co. Ltd v. A B Zodge, 1996 LLR 385 (SC}, 313, 597
Bharat Forge Co. Ltd v. Uttam Manohar Nakate 2005 LLR 210 (SC}, 615
Bharat Heavy Electricals Ltd v. Anil and others, 2007 LLR 201, 200
Bharat Iron Works v. Bhagubhai Balubhai Patel AIR 1976 SC 98,164,165
Bharat Kala Kendra v. R K Baweja, (1980} 2 LLJ 236 (Delhi}, 249
Bharat Kumar K. Palicha v. State of Kerala, AIR 1997 Ker. 291 at 295,412
Bharat Petroleum Corporation Ltd v. Maharashtra General Kamgar Union 1997 LLR 180 (SC}, 584, 666,
690,693,698
Bharat Petroleum Corporation Ltd v. R J Tiwari, (1995) LLR 259,312
Bharat Sanchar Nigam v. Man Singh 2011 (12) SCALE 327, 528
Bharat Singh v. Management of New Delhi Tuberculosis Centre, New Delhi, 1986 Lab. IC 850,175,343
Bharat Sugar Mills Ltd v. Jai Singh, (1961) 2 LLJ 644 (SC}, 404, 563
Bhattacharjee Rubber Works Ltd v. Bhattacharjee Rubber Workers Union', (1960) 2 LLJ 198 (SC}, 545
Bhavnagar Municipality v. A Karimbai, AIR (1977} SC 1229, 655
BHEL v. M Chandrasekhar Reddy, (2005) 2 sec 481; 2005 sec (L&S} 282; AIR 2005 SC 2769, 627
Bhilai Steel Project v. Steel Works Union AIR 1964 SC 1333, 688
Bhilwara Dugdh Utpadak Sahkari S Ltd v. Vinod Kumar Sharma, 2011 LLR 1079 (SC}, 13
Bhola Nath Mukherjee v. Govt. of West Bengal, (1997} 1 SCC 562,537
Bhopgur Coop. Sugar Mills Ltd v. Harmesh Kumar (2006} 13 SCC 28, 532
Biecco Lawrie Ltd v. State of West Bengal (2009} 10 SCC 32,615,577,578,580
Bihar Fire Works and Potteries Ltd (1953) 1 LLJ 49 (LAT}, 460
Bihar Relief Committee v. State of Bihar, (1979) 2 LLJ 53 (Pat), 228, 229
Bijli Mazdoor Sangh, v. UP Electricity Board, AIR 1970 Allahabad 589,594,690
Bilash Chander v. Balmer Lawrie and Co. Ltd, AIR 1953 Calcutta 613, 184
Binny Ltd v. Their Workmen, (1972} 1 LLJ 478 (SC}: (1974) 3 sec 152; 1973 sec (L&S) 444; AIR 1973
SC 1403, 198,384, 628
Binoy Kumar Chatterjee v. Jugantar Limited (1983) 1 LLJ 8,496
Binoy Kumar v. State of Bihar, (1983} Lab IC 1884 (Patna) (F.B.}, 230
Blue Star Ltd v. N R Sharma, (1975) 2 LLJ 300 (Delhi}, 250
Board of Directors of South Arcot Electricity Distribution Co. Ltd v. Elumalai (1970) 2 SCJ 118, 537
Board of Management of SVT Educational Institution v. AR Bhatt, 1997, Lab IC 1917, 590
Bokajan Cement Corpn. Employees' Union v. Cement Corpn. of India Ltd, (2004) 1 LLJ 197, 88, 104
Bokaro Steel Workers Union and Another v. State of Bihar, 2000 I LLJ 117 (Pat}, 90
Bombay Corporation v. Mavlankar (1978) 3 SCR 1000, 566
 List of Cases • xxi

Bombay Dock Labour Board v. Stevedore Workers, (1954) 2 LLJ 200 (IT}, 270
Bombay Garage (Ahmedabad) Ltd v. Its Workmen, (1961} 2 LLJ 40 (Gujarat), 563
Bombay Gas Co. v. Gopal Bhiwa, AIR 1964 SC 752, 335
Bombay Pinjrapole v. The Workmen, (1971) 2 LLJ 393 (SC}, 218
Bombay Telephone Canteen Employees Association, Prabhadevi Telephone Exchange v. Union of India, (1997)
6 SSC 723, 235
Bombay Union of Journalists v. State of Bombay, (1964} 1 LLJ 351 (SC}, 375,390, 516
Bombay Union ofJournalists v. The Hindu, (1994) 2 LLJ 600: AIR 1963 SC 318,181, 188,191,192,193,197, 198
Bongaigaon Ref nery & Petrochemicals Ltd v. Samijuddin Ahmed, (2001} 9 SCC 557,191
Borosil Glass Works Ltd Employees Union v. D D Bombode, (2001) 1 SCC 350, 91
BPL Ltd V. R. Sudhakar (2004) 7 sec 223, 650
Bridhichand Sharma v. First Civil Judge, (1961} 2 LLJ 86 (SC}, 244,245
Brij Bhusan v. Delhi, AIR 1950 SC 129,350
Britannia Biscuit Co. Ltd Employees' Union v. Assistant Commissioner of Labour, (1983) 1 LLJ 181,281,393
Britannia Engineering Products & Services Ltd v. Second Labour Court & Ors, (2002) 4 CHN 704, 318
Brown Co. Ltd v. Their Workmen, (1959) 1 LLJ 450, 164
Buckingham and Carnatic Co. v. Venkatayaga, AIR (1964} SC 1272, 680,691
Buckingham and CarnaticMills Co. Ltdv. Their Workmen, (1951) 2 LLJ,399,400,401,424,466, 560,564,624
Bum and Co. v. Their Workmen, (1957) 1 LLJ 226,340
Burdwan Central Cooperative Bank Ltd v. Asim Chatterjee (2012} 2 SCC 641, 594
Burmah Shell Co. v. Burmah Shell Management Staff Association, AIR 1971 SC 922: (1970) 3 SCR 378:
(1970) 2 LLJ 590 (SC}, 251, 254, 257
Burn & Co. Ltd v. Their Workmen, AIR 1957 SC 438: (1959) 1 LLJ 450 (SC}, 107,465, 563, 621, 626
Burn Standard and Company v. IT 1995 (4) SC 23,685

C
CB R Ratnam & Co. v. Ekambram, (1957), 2 LLJ 206 (Madras), 338
CK Iypunny v. Madhu Sudan Mills, (1964} 1 LLJ 197 (Bombay), 338
C Kannan v. Superintendent of Police, 1974 Ker. LT 516,425
CL Kannan v. E SL Corporation, AIR 1968 Mad. 280, 671
CM CH Employees Union v. CM Cottage, Vellore Association, (2001} LLR 585, 52
CM T Institute v. Assistant Labour Commissioner, (1979) 1 LLJ 192 (Kamataka}, 79 227
C P Transport Services Ltd v. R G Patwardhan. (1957) 1 LLJ 27 (SC}, 680
CS T Corporation v. Mohd Noor Alam, AIR 1973 SC 1404, 651
C/o Indian Engg. & General Management, (2000) Lab. IC 2468, 265
Cadila Pharmaceutical Ltd v. Jyotiben Harishbhai Pandit 2011 LLR 162,346
Calcutta Electric Supply Co. v. Their Workmen, AIR 1959 SC 119 1,352
Calicut Co-operative Milk Supply Union v. Calicut Co-operative Milk Supply Workers' Union, (1986} Lab.
IC 1681 (Kerala}, 319
Calicut Wynd Motor Service (P) Ltd v. Industrial Tribunal, (1982} Lab. IC 517, 650
Caltex (India) Ltd v. The Commissioner of Labour and Conciliation Officer, AIR 1956 Madras 441,288
Caltex India Ltd, Madras v. Their Workmen, (1955) 2 LLJ 693 (LAT}, 462
Caltex Ltd v. Their Workmen, (1954) 2 LLJ 51,460
Cantonment Executive Officer v. Vijay D Wani, AIR 2008 SC 2953; (2009} 1 LLJ 26, 574
Capt. M Paul Anthony v. Baharat Gold Nines Ltd, AIR 1999 SC 1416: 1999) 3 SCC 679,585,711
(2006) 5 sec 446: 2006 sec (L&S) 1121, 589
Carona Sahu Co. Ltd v. AK Munakhan, (1995) (1) LLN 1014 (Mad}, 344
Cawnpore Tannery Ltd v. S Gupta, (1961} 2 LLJ 110 (SC}, 533
xxii • List of Cases

Cawnpore Tannery Ltd v. Their Workmen, (1954) 2 LLJ 459,249

Cement Works Karmcharis Sangh, Sawai Madhopur v. State of Rajasthan (1999) Lab. IC 503 (Raj.), 455
Central Bank of India Ltd v. PS Raja Gopalam, AIR 1964 SC 743: (1963) 2 LLJ 89 (SC), 332,334
Central Bank of India v. P C Jain, AIR (1969) SC 183, 640
Central Bank of India v. S Satyam (1996) 5 SSC 419,532,533
Central Hair Cutting Saloon v. Harishikesh Pramanik, (1956) 1 LLJ 596 (LAT), 228
Central India Spg. Wvg & Mfg Co. Ltd v. Industrial Court, (1959) ILLJ 468, 5
Central Inland Water Transport Corporation Ltd v. Brojo Nath Ganguly, (1986) 2 LLJ 171, 49
Central Provinces Transport Services Ltd v. Raghunath Gopal Patwardhan, (1957) 1 LLJ 27, 191
Ceramic Workers Progressive Union v. Addl. Registrar, (1994) Lab. IC NOC 66, 95
Certain Banks in the State of Punjab and Delhi v. The Workmen, (1950) LLJ 425 (IT), 460,461,467
Certain Tailoring Concerns v. Its Workmen, (1950) LLJ 280,460
Chairman-cum-Managing Director, Coal India Ltd v. Ananta Saha, 2011 Lab IC 2092 (SC), 572, 573
Chairman-cum-Managing Director, Coal India Ltd v. Mukul K Chaudhuri 2009 III CLR 645
(SC), 599,611
Chairman-cum-MD, Coal India Ltd v. Anant Saha, 2011 Lab. IC 2592 (SC), 581, 590, 633
Chairman-cum-MD, TNCS Corporation Ltd v. K Meerabai 2006 LLR 268, 588
Chandramalai Estate v. Its Workers, (1960) 2 LLJ 243 (SC), 426,461,468
Chandu Lal v. Pan American World Airways Inc. (1985) 2 SCC 727; 1985 SCC (L&S) 535; AIR 1985 SC
1128, 628 Kamal Kishore Lakshman v. Pan American World Airways Inc., (1987) 1 SCC 146; 1987 SCC
(L&S) 25; AIR 1987 SC 229,628
Channappa Basappa Happali v. State of Mysore, AIR (1972) SC 32, 563
Charanjit Lamba v. Commanding Officer (2010) 7 MLJ 367 (SC), 599
Chartered Bank Bombay v. Chartered Bank Employees' Union, (1960) 18 FJR 354, 560, 565, 638
Cheirinjumpatty Thampuratty v. State of Kerala, (2005) 1 LLJ 32, 218
Chelpark Co. Ltd v. Commissioner of Police, (1967) 2 LLJ 836 (Madras), 402
Chemicals and Fibres of India Ltd v. D.C. Bhoir, (1975) 2 LLJ 168 (SC), 201,439
Chemosyn Pvt. Ltd v. Kerala Medical and Sales Representative's Association 1988 Lab. IC 115, 83, 122
Cherinjumpatty Tharipuratty v. State of Kerala, (2005) 1 LLJ 32, 80
Chief Conservator of Forests v. Jagannath Maruti Kondhare, (1996) 2 SSC 293, 237
Chief Engineer (Construction) v. Keshava 2005 LLR 446 (SC), 513
Chief Engineer Irrigation, Orissa v. Harihar Patra, (1977), Lab. IC 1033 (Orissa), 229
Chief Mining Engineer, East India Coal Co. Ltd v. Rameshwar, AIR 1968 SC 218,334
Chief Soil Conservator, Punjab v. Gurmail Singh 2009 LLR 875, 515
Chintaman Martand Salvekar v. Phalton Sugar Works Ltd, (1954) 1 LLJ 499 (L.A.T.), 248,249
Chintaman Rao v. State of Madhya Pradesh, (1958) 2 LLJ 252 (SC), 244
Chipping and Painting Employers' Association v. AT Zambre, AIR 1969 Bombay 274,699,701
Chalan Roadways Ltd v G. Thirugnanasambadam (2005) ILLJ 569,644,645
Christian Medical College, Vellore Association v. Govt, of India, (1983) 2 LLJ 372 (Madras), 228
Cipla Limited v. Maharashtra General Kamgar Union, (2001) 3 SCC 101, 185
CKG Sugar Mills v. All Hasan, AIR 1959 SC 230,349
Clerk of Calcutta Tramways v. Calcutta Tramways, AIR 1957 SC 387, 352
Clerks Depot and Cashiers of the Calcutta Tramways Co. Ltd v. Calcutta Tramways Co., AIR 1957 SC 387,352
Clerks of Calcutta Tramways Co. Ltd v. Calcutta Tramways Co. Ltd, AIR (1957) SC 78,353
Cochin State Power Light Corporation Ltd v. Its Workmen, (1964) 2 LLI 100 (SC), 291
Coimbatore Municipality v. Triruvenkataswami, (1973) 1 LLJ 82 (Madras), 671
Coimbatore PDM Sangam v. Sivakumar Transport, (1986) Lab. IC 1012 (Madras), 424
Coimbatore Periyar Districts Dravida, Panjalal Thozhilalar Munnetra Sangam v. National Textile
 List of Cases • xxiii

Coir Board Ernakulam, Kerala v. Indira Devi P S, (1998) 78 FLR 845 (SC), 238
Coir Board Ernakulam, Kerala State v. Indira Devi PS and others, (1999) 1 LLJ 319,240
Colliery Mazdoor Congress v. New Virbhoom Coal Co. Ltd (1952) LAC 219 Mahalaxmi Cotton Mills
Cominco Binani Zinc Ltd v. KN Mohnan, (1993) Lab. IC 1298, 639,640
Commissioner of Police v. Jayasurian, (1997) 65 SCC 75, 573
Commissioner v. Lakshmindra, (1954) SCR 1005, 350
Common India Ltd V. Niranjan Das (1984) 1 sec 509,523
Communist Party of India (M) v. Bharat Kumar and others, 1997) (7) SCALE 21,413
Container Corporation of India v. Container Corporation Employes Union, (1998) LLR 301, 652
Conway v. Wade, (1909) AC 506, 517, 183
Cooper Engineering Ltd. v. PP Mukherjee, (1976) lSCR 361,314
Cooperative Central Bank Ltd v. Addl LT, AIR 1970 SC 245, 185, 691
Cooperative Milk Societies' Union Ltd., v. State of West Bengal, (1958)2 LLJ 61 (Calcutta), 228
Corpn.of the City of Nagpur v. Employees and Bangalore Water Supply and Sewerage Board v. A Rajappa,
(2003) 9 sec 290,208
Corporation Limited, 2011 LLR 1076 (HC Madras), 57, 113
Corporation of City of Nagpur v. Its Employees, (1960) 1 LLJ 523 (SC), 205, 206, 213, 217, 535
Corporation of Cochin v. Jalaja, (1984) 1 LLJ 526 (Kerala), 228
Cotton & Woollen Textile Workers' Union v. Industrial Tribunal, (1982) Lab. IC 1329 (SC), 228
Cownpur Tannery Ltd Kanpur v. Guha(s) (1961) 2 LLJ 110 at 112,534
Cox & Kings (Agents) Ltd v. Their Workmen, AIR 1977 SC 1666.
Crescent Dyes and Chemicals Ltd v. Ram Naresh Tripathi, (1993) 2 SCC 215, 583
Cricket Club of India v. Bombay Labour Union, (1966) 1 LLJ 775 (SC), 215
Crompton Greaves Ltd v. Its Workmen, (1978) 2 LLJ 80, 82 (SC): (1978) 36 FLR 329 (SC), 459,460,461,
463,467,469

D
D A V College Jullunder v. State of Punjab, AIR 1971 SC 1737, 132
D C & G Mills v. Shambhu Nath, AIR 1978 SC 8,361
DC Dewan Mohideen Sahib & Sons v. United Bidi Worker's Union, (1964) 2 LLJ 633. (SC), 245
D CM Ltd v. Lieutenant Governor AIR 1989 Del. 193, 553
DK Yadav v. JM A Industries Ltd, AIR 1987 SC 2408: (1993) 3 SCC 259, 50,667
D Maheshwari v. Delhi Administration, (1983) 3 SCR 949,314
D N Banerjee v. PR Mukherjee, AIR 1953 SC 58: (1953) 1 LLJ 195 (SC), 3, 192,195,205,351,399,443
D N Vohra, Dismissal, Discharge and Punishment, Lay-off and Retrenchment, (1967) 316, 623
D.C. Cotton Mills v. Commissioner of Income Tax, AIR 1965 SC 65. 69,352
Dabur (Dr SK Burman) Pvt. Ltd v. Their Workmen, AIR 1968 SC 17,349,389
Dahingeapara Tea Estate v. Their Workmen, (1956) 1 LLJ 187 (LAT), 270
Daily Aljamiat v. Gopi Nath Aman, 1977 Lab. IC (1352), 324
Dairy Development Corporation Ltd v. V K Durga Rao, (1988) Lab. IC 833 (Andhra Pradesh), 312
Daladdi Co-operative Agriculture Service Society Ltd v. Gurcharan Singh, (1993) (5) Serv LR 719 (P&H), 344
Dalmia Cement (Bharat) Ltd v. Their Workers, (1955) 2 LLJ 466 (LAT), 402,460,468
Dalmia Cement Co. v. Chaniah, (1955) 1 LLJ 599 (IT), 407
Dalmia Cement Ltd v. Naraindas Anandjee Bechar, AIR 1939 Sind 256, 122
Dalmia Dadri Cement Co. v. Murari Lal Bikaneria, (1970) 1 LLJ 416 (SC), 577
Dalmia International Ltd v. Thomas, (1975) 2 LLJ 526 2 LLJ 526 (Kerala), 655
Damodar Ganesh v. State, (1961) 2 LLJ 385,155,408,409,410
Damoh Panna Sagar Rural Regional Bank v. Munna Lal Jain (2005) 10 SCC 84, 617
xxiv • List of Cases

Damyanti v. Union of India, AIR 1971 SC 966, 57

Darayo v. State of UP, AIR 1961 SC 1457, 348
Datta Balu Sagar v. Dock Manager, Bombay Port Trust, 1997 LLR 720, 590
DC Works v. State of Saurashtra, AIR 1957 264,350
DDA v. Shri Radhey Shyam Tyagi, (1996} LLR 216 (Delhi}, 311
Debotosh Pal Chaudhary v. Punjab Bank 2002 LLR 1989, 592
Deccan Sugar and Abkari Co. Ltd v. Their Workmen, (1951) 1 LLJ 572 (IT}, 328
Deep Chand v. State of U.P., AIR 1959 SC 648, 41
Deepak Industrial Ltd v. State of West Bengal, (1975) 1 LLJ 293 at 294-98, 198
Deepak Puri v. Fifth Industrial Tribunal, (1986} Lab. IC 132 (Calcutta), 196,318,319
Deepok Industrial Ltd v. State of West Bengal, (1975) 1 LLJ 293, 197
Delhi Administration v. Edward Keventer Ltd, (1978) 2 LLJ 209,186
Delhi Administration v. Workmen of Edward Keventers, (1978) 2 LLJ 209 (SC}, 453
Delhi Cloth & General Mills Co. Ltd v. Union of India, (1984) 1 LLJ 174,282,496
Delhi Cloth & General Mills Ltd v. Shambhu Nath Mukherjee, AIR 1978 SC 8,495
Delhi Cloth & General Mills v. Ludh Budh Singh, (1972} 1 LLJ 180 (SC}, 313,314, 598
Delhi Cloth and General Mills Co. Ltd v. Shambhu Nath Mukheiji, (1978) 1 LLJ 1 (SC}, 493, 523
Delhi Cloth and General Mills v. Rameshwar Dayal, (1960} 2 LLJ 712 (SC}, 323
Delhi Development Horticulture Employee's Union v. Delhi Administration (1992) 1 LLN 939,515
Delhi Security Printer v. Hindustan Engg. and General Mazdoor Union (1996} LLR 714,426
Delhi Transport Corporation v. DTC Majdoor Congress, (1985) 3 SCC 116, 49
Delhi Transport Corporation v. Sardar Singh (2004) 7 SCC 574: 2004 LLR 953, 606, 648
Delhi Transport Undertaking v. IT Delhi, (1965) 1 LLJ 428, 650
Delta Jute Mills Ltd v. Their Workmen, (1950) 2 LLJ 1054, 400
Dena Bank v. Kirat Kumar T Patel AIR 1998 SC 511: (1998} 2 LL 1 (SC}, 344,346
Deoria sugar Mills Ltd v. Dy. Labour Commissioner, op. cit., 102, 701
Depot Manager, Andhra Pradesh State Road Transport Corporation v. Raghuda Siva SankarPrasad 2007
LLR 113,619
Des Raj v. State of Punjab, AIR 1988 SC 1182, 1997LLR 889,228,230,234
Desh Raj Gupta v. IT, (1991} 1 sec 249,314
Deshpande v. Ferro Alloy Corporation, (1964} 1 LLJ 613,457
Dev Singh v. Punjab Tourism Development Corporation Ltd 2003 LLR 1023, 603
Devendra Swamy v. State Road Transport Corporation 2002 Lab IC 2475, 600
Devinder Kaur (Smt) v. Child Welfare Council, Punjab, 2011 LLR 357, 256
Devinder Singh v. Muncipal Council, Sanaur, 2011 Lab IC 2799, 268,261,496
DGM Oil & Natural Gas Corporation Ltd v. Ilias Abdul Rehman (2005) 2 SCC 183,511
Dhampur Sugar Mills Ltd v. Bhola Singh, (2005) LLR 320, 263
Dhanalakshmi v. Reserve Bank of India, Bombay, (1999) LLR 278,284
Dhanlakshmi Bank Ltd v. Parameshwara Menon, (1980} 2 LLJ 45, 656
Dhanrajgiri Hospital v. Workmen, (1975) 2 LLJ 409 (SC}, 210
Dharam Singh v. Bank of India, (1979) Lab. IC 1079, 470
Dharangadhra Chemical Works Ltd v. State of Saurashtra, AIR 1957 SC 264 at 267, 242, 243, 244
Dhian Singh v. Deputy Secretary, AIR 1960 Punjab 41,351
Diamond Machinery Mfg. Works v. Their Workers, (1952) 1 LLJ 137,401
Digvijay Cement Co. Ltd v. Their Workmen, (1951) 1 LLJ 236 (IT}, 461
Digwadih Colliery v. Ramji Singh, (1964) 2 LLJ 143,638
Dimakuchi Tea Estate Karmchari Sangh v. Dimakuchi Tea Estate, AIR 1958 SC 358, 170
Dinesh Sharma v. State of Bihar, (1983} BLJR 207 (Patna}, 228
 List of Cases • xxv

Disciplinary Authority-cum-Regional Manager v. Nikunja Bihari Patnaik, (1996) 9 SCC 69; 1996 SCC (L&S)
1194, 628
District Labour Association v. Its Ex-employees, (1960) 1 LLJ 802 (SC), 516
Div. Manager, New India Assurance Co. Ltd v. A Sankaralingam, (2008) 10 SCC 698, 260
Divisional Controller, Karnataka State Road Transport Corporation v. MG Vittal Rao (2012) 1 SCC 442,
589,628
Divisional Manager, Rajasthan SRTC v. Kamruddin (2009) 7 SCC 552, 601
Doordarshan Karmachari Congress v Union of India, (1988) 2 LLJ 83 (Allahabad), 228
Duduwala and Co. v. IT., AIR 1958 Raj. 20,321
Dunlop Rubber Company v. Workmen AIR 1965 SC 1392, 584
Durga Pd. v. State of UP, (1954) SCA 204,350
Durga Prasad, Reinstatement and Labour Law, 7 J LLL, 36 (1965), 623
Durga Shankar v. Raguraj Singh, AIR 1954 SC 520,352

E
East Asiatic Allied Companies v. Shelka, (1961) 1 LLJ 162 (Bombay), 285
East Indian Coal Co. Ltd v. East Indian Coal Co. Ltd Workers' Union, AIR 1961 Pat 51, 83
Eastern Electric & Trading Co. v. Baldev Lal, (1975) 4 SCC 684,563,649
Eastern Plywood Manufacturing Co. Ltd v. Eastern Plywood Manufacturing Workers' Union, (1953) 1, LLJ
628,638
Eenadu Press Workers Union v. Government of Andhra Pradesh 1979 Lab. IC 330 (Andhra Pradesh), 454
EID Parry (India) Ltd v. Industrial Tribunal (1993) 2 LL N 168,312, 509
Elgin Mills Co. Ltd v. Suti Mill Mazdoor Union, 1958 1 LLJ 100 (LAT), 629
Emerald Construction Co. Ltd v. Lowthian & Others [1966] IWLR, 691, 122
Empire Industries Ltd v. State of Maharashtra, (2010) 4 SCC 271 at 274,364,381
Empire of India Life Insurance Co. Ltd v. Their Employees, Labour Gazette, October, 1947187, 415
Employees of Dewan Bahadur Ram Gopal Mills v. Dewan Bahadur Ram Gopal Mills, (1958) 2 LLJ 115,449
Engineering Mazdoor Sabha v. Hind Cycle Ltd (1962) 2 LLJ 760 (SC): AIR (1963) SC 874,302,349
Equitable Coal Co. v. Algu Singh, AIR (1958) SC 761, 655
Escorts Ltd V. Presiding Officer, (1997) 2 sec 621,502
Essorpe Mills (P) Ltd v. Labour Court, 1999 LLR 89,621
Everyday Flash Light Co. v. Labour Court, (1962) 2 LLJ 204 (Allahabad), 163
Excel Wear v. Union of India, (1978) 2 LLJ 527 (SC): (1978) 4 sec 224,474, 517, 551, 552, 554
Executive Engineer, National Highways v. IndustrialTribunal, Bhubaneshwar, (1995) 1 LLJ 470, 219
Executive Engineer, National Highway Division v. R.P.F. Commissioner, (1988) Lab. IC 690 (Orissa), 230
Executive Engineer, State of Karnataka v. K Soonasetty, (1997) LLR 889,234
Express Newspaper Ltd v. Industrial Tribunal, (1962) 2 LLJ 227 (SC): AIR 1963 SC 569,185,420,454,535

F
F L Corporation (P) Ltd v. Union of India, AIR 1970 Delhi, 60, 66, 184
F W Heilgers and Co. Ltd v. Its Workmen, (1950) LLJ 231 (IT), 459
Falcon Tyres Ltd v. Falcon Tyres Employees' Union Mysore112 (2006) LLR 129,697
Fateh Singh v. Rashtriya Mill Mazdoor Sangh, 1994 I LLJ 294 (Raj.), 90
Fedders Lloyd Corporation (P) Ltd v. Lt Governor, Delhi, (1970) Lab. IC 421 (Delhi), 180, 201
Federated Municipal and Shire Council Employees' Union ofAustralia v. Lord Mayor, Alderman, Councillors
Federation of Indian Chamber of Commerce and Industry v. Their Workmen, (1971) 2 LLJ 630 (SC), 216
Feroz Din v. State of West Bengal, (1960) 1 LLJ 244 (SC), 421,458
Filmistan (Pvt.) v. Balakrishna Bhiwa (1967) 2 LLJ 637 (Bombay), AIR 1972 SC 171,649,650
xxvi • List of Cases

Firestone Tyre and Rubber Co. of India Ltd v. B. Shetty, (1953) 1 LLJ 599, (LAT}, 404
Firstone Tyre and Rubber Co. Ltd v. K P Krishnan, AIR 1956 Bombay 273, 375
Food Corporation of India Staff Union v. Foods Corporation of India, 1995 Supp (1) SCC 678 (SC}, 139
Food Corporation of India v. George Vergese 1991 Lab. IC 1254 (SC}, 586
Food Corporation of India v. Union of India, 2011 LLR 77,346
Food Corporation of India Workers Union v. Food Corporation of India (1985) 2 SCC 295,368
Francis Gomez v. President, Thiruvanathapuram Shops and Commercial Establishments Employees' Union
(P &H),229
Francis Klein & Co. (P) Ltd v. Workmen, (1972} 4 SCC 569,627 AIR 1971 SC 2414, 627
Fraser and Ross v. District Labour Officer, (1966) 2 LLJ 682 (Madras), 213

G
GB Pant University of Agricultrue & Technology v. State ofU.P. (2000} SCC, 268
G C Kanungo v. State of Orissa, AIR 1995 SC 1655, 341
G C Sharma Sons v. R K Baveja, (1972} 2 LLJ 475 (Delhi}, 229
GM Security Paper Mills v. R S Sharma, (1986) Lab. IC 667,670 (SC}, 294
G Mathu Krishnan v. New Horizon Sugar Mills Pvt. Ltd, (1980) Lab. IC 475,388
G R S M (W) Co. Ltd v. District Collector 1982 Lab. IC 367, 424
GS Dhara Singh v. EK Thomas, AIR 1988 SC 1829, 115
G S Ramaswamy v. The Inspector General of Police, Mysore AIR 1966 SC 175, 533
G TLad v. Chemicals and Fibres India Ltd, (1979) 1 LLJ 260,643
Gammon India Ltd v. Niranjan Dass (1984) 4 SCC 509: 1984 SCC (L&S} 144, 505
Gandharba Bhagi v. Steel Authority ofIndia, (1987} Lab. IC 1226 (Orissa), 377
Gandhinagar Motor Transport Society v. Bombay State, AIR 1954 Bombay 202,349
Ganga Kisan Sahkari Chini Mills Ltd Jaivir Singh, 2007 LLR 260, 514
Ganges Jute Manufacturing Company Ltd v. Their Employees, (1950) LLJ 10,415
Gauri Shankar Chatterjee v. Taxmaco Ltd, (2002} Lab IC 2467, 381
General Labour Union (Red Flag) v. B V Charvan, (1985) 1 LLJ 82, 420
General Manager (Operations), State Bank of India v. State Bank of India Staff Union (1998} LLR 402, 658
General Manager (P), Punjab and Sind Bank v. Daya Singh 2010 LLR 1029, 617
General Manager (USD), Bengal Nagpur Cotton Mills v. Bharat Lai, 2011 (10) SCALE 478,247
General Manager Telecom v. A Sriniwasa & Others, 1998 (78) FLR 143 (SC}, 234
General Manager, B SN L v. Mahesh Chand, 2008 LLR 435,514
General Manager, Haryana Roadways, v. Rudhan Singh (2005) LLR 849,510
General Manager, Telecom v. S Srinivasa Rao, AIR 1998 SCC 657, 235
General Secretary, M.P.K.M. Panchayat (HMS) v. Western Coalfield Ltd, (1999} I LLJ 772, 502
General Secretary, Rourkela Shramik Sangh v. Rourkela Mazdoor Subha, 1991 Lab. IC 1270 (SC}, 358
Ghaziabad Development Authoirty & Anr. v. Ashok Kumar (2008} 4 SSC 261, 525
Glaxo Lab (India) Ltd v. PO, Labour Court, AIR 1984 SC 505, 581
Goa Sampling Employees' Association v. G S Company of India P. Ltd, 1985 Lab. IC 666,366
Goenka Mica Syndicate v. Mohd. Yasin, (1954) 1 LLJ 507 (IT), 28
Gokul Chand Dwarka Das Morarka v. King., 75 I.A 30,458
Goodlass Wall Co. v. Amir Ahmad Bakoor Khan, (1954) 2 LLJ 573; (1956) 1 LLJ 468 (LAT}, 406
Gopalji Jha Shastri v. State of Bihar, (1983} 2 LLJ 22 (SC}, 228
Gorden WoodroffLeather Manufacturing Co. Ltd Workers' Union v. Their Management, (1949) LLJ 45 (IT},328
Government of India, Second Five-Year Plan (1956) 49, 353
Government Tool Room and Training Centre's Supervisors and Offi cers Association v. Assistant Labour
Commissioner, (2002} Lab. IC 103, 78
 List of Cases • xxvii

Govind Sheet Metal Works and Foundry v. Their Workmen (1956) FJR 363 (LAT), 460
Govind Sugar Mills v. Hind Mazdoor Sabha, (1975) 2 LLJ 370,373,390
Govindbhai Kanabhat Mari v. N K Desai, (1988) Lab IC 505 (Gujarat), 230
Grindlays Bank Ltd v. Central Government Industrial Tribunal, (1981) 1 LLJ 327 (SC), 311
Grindlays Bank v. Central Government Industrial Tribunal, 1980 (supp) SCC 420,342
Guest Keen Williams (Pvt.) Ltd v. P J Sterling, (1959) 2 LLJ 405 (SC), 340, 691, 680
Gujarat Mazdoor Sabha v. State of Gujarat, (1999) 1 LLJ 39,309
Gujarat Rajya Kamdar Sabha v. Registrar under the Trade Unions Act, (1999) LLR 285, 96
Gujarat Steel Tubes case, (1980) 1 LLJ 137,306
Gujarat Steel Tubes Ltd v. Gujarat Steel Tubes Mazdoor Sabha, (1980) 1 LLJ 137 (SC), 302,303,349,423,
493,566,568,638
Gujarat Steel Tubes v. Gujarat Steel Tubes Mazdoor Sabha (1980) 2 LLJ 72: AIR 1980 SC 1897, 350, 352,
463,494,465
Guiab Singh v. Collector of Farukhabad, AIR 1953 All. 585,351
Gurdaspur Central Co-operative Bank Ltd v. Labour Court, (1999) Lab. IC 192, 163
Gurmail Singh v. State of Punjab 1991) 1 sec 189: 1991 sec (L&S) 147,505,539
Gursham Thappa v. Abdul Khuddus, AIR 1969 SC 744, 537
Gwalior Rayon Silk Mfg. Co. v. District Collector, (1982) 1 LLJ 356 (Kerala), 424
Gwalior Rayons v. Labour Court, (1978) 2 LLJ, 188 (Kerala), 336

H
H B Khaitan v. State of Maharashtra.187 (1987) Lab. IC 836 (Born), 455
H D Singh v. RB I 1985 Lab. IC 1733 (SC), 511
H M T Karmika Sangh v. Labour Commissioner, (1985) Lab IC 633, 89
HP Minerals and Industrial Development Corporation Employees Union v. State of HP (1996) 7 SCC 139,497
H R Adyanthaya v. Sandoz (India) Ltd, (1994) 4 sec 164,249,257,260,
H S Rajashekara V. State Bank of Mysore, (2012) 1 sec 285, 510, 515
Hall & Anderson Ltd v. SK Neogi, (1954) 1 LLJ 628 (Calcutta), 321
Hanuman Jute Mills v. Their Workmen, (1953) 2 LLJ 684 (LAT), 460
Harendranath Bose v. Second Industrial Tribunal, (1958) 2 LLJ, 1987, 362
Hari Nagar Cane Farm v. State of Bihar, AIR 1978 SC 548,211
Hari Prasad Shivshankar Shukla v. Divalkar (AD), AIR 1957 SC 121,490
Hari Shankar Jain v. Executive Engineer Rural Electricity Division, (1977) 2 LLJ 429 (Allahabad), 671,674
Hari Singh v. I.T. cum-L.C. Rohtak, (1993) II LLN 244,497
Hari Vishnu Karnath v. Ahmad Ishaq, AIR 1955 SC 223,351
Hariba v. KS RT Corporation, (1983) 2 LLJ 76 (Kamataka), 228
Harihar Bahinipati v. State of Orissa, (1965) 1 LLJ 501 (Orissa), 217
Harijinder Singh v. Punjab State Warehousing Corpn, (2010)3 SCC 192. para 19, 6, 13, 53,523,530
Harinarayan Srivastava v. United Commercial Bank, 1997 LLR 497 (SC), 583
Hariprasad Shivashankar Shukla v. AD Divalkar AIR 1957 SC 121,495, 504
Harish Chandra v. The Colli, AIR 1957 SC 444, 352
Harjinder Singh v. State of Haryana, (1992) (1) PLR 186 (P & H), 230
Harjinder Singh v. State of Punjab (2010) 3 SSC 192, 532, 534
Harmohinder Singh v. Kharga Canteen, Ambala Cantt 2001 LLR 849 (SC): (1997) 2 LLN 1007 (SC), 51,660
Haryana Financial Corp. v. Kailash Chandra Ahuja JT 2008 (8) SC 70, 593
Haryana State Co-op. Supply Marketing Federation v Sanjay (2009) LLR 1014: (2009) 14 SCC 43,511
Haryana State Electricity Development Corporation Ltd v. Mamni (2006) 9 SCC 434, 632
Haryana State F C C W Stores Ltd v. Ram Niwas (2002) Lab IC 2624, 499
xxviii • List of Cases

Haryana Urban Development Authority v. Devi Dayal, 2002 Lab. IC 1090, 230
Haryana Urban Development Authority v. Om Pal (2007} 5 SCC 742, 511
Haryana Woollen Development Corporation v. PO I.T cum LC, (1993) 2 LLJ 318,230
Hathi Singh Mfg Co. Ltd v. Union of India (1960) 3 SCR 528, 541, 547
Heavy Engineering Mazdoor Union v. State of Bihar, (1969) 2 LLJ 549,365,367
Herbert Sons Ltd v. Workman, (1977) Lab IC 162 (SC), 295
Highway Group of Estates v. Industrial Tribunal, (1978) 2 LLJ 251 (IT), 460,470
Himachal Pradesh State Electricity Board v. Laxmi Devi, 2011 LLR 52 (H.P.), 261
Himmat Lal v. State of M.P., AIR 1954 SC 1403, 350
Hind Construction and Engineering Co. Lt (1965) 1 LLJ 462, 624
Hind Construction and Engineering Co. Ltd v. Their Workmen, AIR 1965 SC 917: (1965) 1 LLJ 462,166,648
Hindustan Aeronautics Ltd v. Hindustan Aero Canteen K Sangh, (2003) 1 LLJ 494 (SC), 381
Hindustan Aeronautics Ltd v. Workmenl, (1975) 4 SCC 679,367
Hindustan Antibiotics v. Workmen AIR 1967 SC 948,340
Hindustan Construction Co. Ltd v. All India Hindustan Construction Workers Union, (1974) 2 LLJ 212 (Kerala),
302 National Project Construction Corporation Ltd v. Their Workmen, 1970 Lab. IC 907 (Patna), 302
Hindustan Construction Co. v. All India Hindustan Construction Workers Union, (1974) 2 LLJ 212 (Kerala), 350
Hindustan General Electric Corporation Ltd v. Bishwanath Prasad (1971) 2 LLJ 340,647
Hindustan Lever Ltd V. Ram Mohan Ray, (1973) 4 sec 141,658
Hindustan Lever Ltd v. The Management (1984) 2 LLJ 388,316
Hindustan Levers Ltd v. B N Dongre, (1995) Lab IC. 113(SC), 349
Hindustan Ltd v. Chief Commissioner, (1957) 2 LLJ 466, 197
Hindustan Motors Ltd v. Tapan Kumar Bhattacharya (2002) 6 SCC 41, 269
Hindustan Paper Corpn. v. Purnendu Chkrobarty 1997 2 LLN 1007 (SC), 667
Hindustan Paper Corporation v. Purnendu Chakrobarty, (2001) LLR 155 (SC), 51
Hindustan Steel Ltd v. Presiding Officer, Labour Court, AIR 1977 SC 31,495
Hindustan Steel Ltd v. State of Orissa, AIR 1973 SC 31,494
Hindustan Steel v. AK Roy (1970) 1 LLJ 228, 632
Hindustan Steel Works Construction Ltd v. Hindustan Steel Works Construction Ltd Employees Union, 2005
LLR 1025, 660
Hindustan Times Ltd v. Their Workmen, (1963) 1 LLJ 108 (SC), 329,330
Hindustan Tin Works (P) Ltd v. Employees (1979) 2 SCC 80, 629
Hindustan Tin Works Ltd v. Its Employees, (1958) 2 LLJ 474 (SC), 352
Hissar Central Cooperative Bank v. Kalu Ram (2003) 9 SCC 221,631
Hochtief Gammon v. State of Orissa, (1975) 2 LLJ 418 (SC), 375,391
Hoechst Pharmaceuticals v. State ofBihar, AIR 1983 SC 1019,41
Hombe Gowda EDN Trust v. State of Karnataka 2006 LLR 141 (SC), 598,606
Hopkings and Wiliam (Travancore Ltd v. Mineral Companies StaffAssociation), (1955) 2 LLJ 293 (LT), 461,469
Hornsby (P) Ltd v. TB Kadam, (1976) 3 sec 71, 563
Hosiery Workers' Union v. JK Hosiery Factory, Kanpur, (1952) (LAT), 321
Hotel Imperial v. Hotel Workers Union, (1959) 2 LLJ 544 (SC), 323, 641
Howrah Foundry Works v. Their Workmen, (1955) 2 LLJ 97 (IT), 402
Hussainbhai v. Alath Factory, (1978) 2 LLJ 397 (SC), 246
Hussainera Khatoona V. State of Bihar, (1978) I sec 238,430

IMH Press v. Additional Tribunal, 19611 LLJ 499 (SC), 465,559,560

ITC Ltd. Workers' Welfare Association v. Management of ITC Ltd, (2000) 1 SCC 371, 296
 List of Cases • xxix

IFFCO Phulpur Karmchari Sangh v. Registrar, Trade Union Kanpur, 1991 Lab. IC 531, 89
IMH Press v. Addl. LT, (1960} 1 LLJ 499 (SC}, 626
In ITC Ltd v. Government of Karnataka (1985) 2 LLJ 430, 649
Incharge Officer v Shankar shetty, 2010 (8) SCALE 583, 527
Inder Singh & Sons Ltd v. Their Workmen, (1961} 2 LLJ 89 (SC}, 329
India Cables Co. Ltd v. Workman (1962} 1 LLJ 409(SC}, 366
India Construction Corporation Limited, (1953) LIC 568 (Calcutta), 290
India Cycle Mfg. Co. Ltd v. Their Workers, (1951) 1 LLJ 390 (IT), 467
India Ltd v. National Union Water Front), 43 JIL 1 (2001}, 370
India Machinery Mazdoor Union v. Indian Machinery Co. Ltd (1956) 2 LLJ 408 (LAT), 461
India Railways Construction Co. Ltd. v. Ajay Kumar, 2003 LLR 337, 603
India Tourism Development Corporation v. Delhi Administration, 1982 LIC 1309, 383
Indian Air Gases Mazdoor Sangh v. Indian Air Gases Ltd, (1977) 2 LLJ 503, 505 (Allahabad}, 681
Indian Airlines v. Prabha D Kanan (2006) 11 sec 67; (2007} 1 sec (L&S) 359; AIR 2007 SC 548, 628
Indian Bank Employees Union v. Indian Bank, (1994) 2 LLJ 497, 107
Indian Bank v. Federation of Indian Bank Employees' Union, 2008 LLR 619,124
Indian Cable Co. Ltd v. Its Workmen, (1962} 1 LLI 409,119,529
Indian Cycle Mfg Co. Ltd v. Their Workers, (1951)1 LLJ 390 (IT), 460
Indian Engg. & General Management, (2002} Lab. IC 2468, 219
Indian Explosive Workers Union v. State of Bihar (1992) 1 LLJ 578, 89
Indian Express Employees Union v. Indian Express (Madurai) Ltd 1998 Lab. IC 529 (Kerala}, 684
Indian Express Employees' Union v. Indian Express (Madurai) Ltd, (1999) lLLJ 490 (Kerala), 696, 697
Indian General Navigation and Rly Co. Ltd v. Its Workmen, (1960} 1 LLJ 13 (SC}, 323,436, 462, 465, 466,
575,626
Indian Hume Pipe Co. Ltd v. Labour Court, Andhra Pradesh (1993) 1 LLJ 770 at 774; AIR 1964 AP 56; 24
FJR333,534
Indian Hume Pipe Co. Ltd v. The Workmen AIR 1960 SC 251, 506
Indian Institute of Petroleum v. State of U.P., (1985) Lab IC 198 (Allahabad}, 228
Indian Iron & Steel Co. v. Ninth Industrial Tribunal, (1977) Lab. IC 607, 698
Indian Iron and Steel Co. Ltd v. Workmen, AIR 1958 SC 130, 137,165,254,349,464,560,561,647
Indian Machinery Co. v. Their Workmen, (1957) LAC 539,402
Indian Machinery Mazdoor Union v. Indian Machinery Co. Ltd, (1956) 2 LLJ 408 (LAT}, 459
Indian Marine Service Pvt. Ltd v. Their Workmen, AIR 1963 SC 528,461,470
Indian Metal and Metallurgical Corporation, (1952) 1 LLJ 364 (Mad.}, 535
Indian Navy Sailors' Home v. Bombay Gymkhana Club Caterers and Allied Employees' Union; (1986} Lab.
IC 1118, 228
Indian Oil Corporation Ltd v. Workmen, (1976) 1 SCC 63,658
Indian Oxygen Ltd v. T Natrajan 1999 LLR 213, 651
Indian Paper Pulb Co. Ltd v. Their Workmen, AIR 1949 FC 148, 185
Indian Red Cross Society Haryana State v. The Additional Labour Court, Chandigarh. (1992} (1) PLR 121
Indian Telephone Industries Ltd v. Prabhakar H Manjare (2002} 3 LLJ 1134, 647, 648
Indian Tobacco Company Ltd v. Government of West Bengal, (1971) 1 LLJ 89 at 94 (Calcutta), 288
Indian Tyre and Rubber Co. v. Their Workmen (1957) 2 LLJ 506, 529
Indravadan N Adhvaryu v. Laxminarayan Dev Trust through Chief Executive Kothari,(2011) LLR 262,218,230
Indumati Devi v. Bengal Court of Wards, AIR 1938 Cal. 384,351
Indumati Devi v. Bengal Court of Wards, AIR 1958 Cal. 385,350
Industrial Employees Union, Kanpur v. JK Spinning and Weaving Mills Co., (1956) 1 LLJ 327 (LAT}, 483
Inland Steam Navigation Workers' Union, AIR 1963 Cal 57, 93
xxx • List of Cases

International Airport Authority of India v. International Air Cargo Workers' Union, (2009} 13 SCC 374,248
Investa Machine Tools & Engineering Co. Ltd v. Its Workmen, (1963} 2 LLJ (IT}, 545
Iqbal Hussain Qureshi v. Asstt. Labour Commissioner, (1990} Lab. IC NOC 131 (Madh. Pra}, 268
Irani v. State of Madras, AIR 1961 SC 1731, 348
Ismail Papamia v. Labour Appellate Tribunal, AIR 1969 Bombay, 693
Italkholic Tea Estate v. Their Workmen, (1954) 2 LLJ 717 (LAT}, 469

J
J F B & P Works (P) Ltd v. B Sharma, (1977) 1 LLJ 306 (Patna), 333
J H Yadav v. M/S Forbes Gokak, (2005) LLR 314,195,198,339
J J Shrimali v. District Development Office, Jila Panchayat, (1989} Lab. IC 689 (Gujarat), 230
J K Aggarwal v. Haryana Seeds Development Corporation Limited, 1991 Lab. IC 1008, 583
J K Cotton Manufactures v. JN Tiwari, AIR 1959 Allahabad 639,688
J K Cotton Mills Spg. and Wev. Mills Ltd v. Their Workmen, (1956) 2 LLJ 278,401
J K Cotton Spining & Weaving Mills v. Labour Appellate Tribunal, AIR 1964 SC 737, 4, 5
J K Hosiery Factory v. LA T, (1956) 2 LLJ 4 (Allahabad}, 563
JN L Pradhan v. Industrial Tribunal, (1977} 1 LLJ 36 (Orissa}, 291, 201
JN Singh & Co. Pvt. Ltd. v. SN Sexena, (1916) Lab. IC 840 (Allahabad}, 229
J P Srivastava v. Union of India, (1977) Lab. NOC 134,581
J Philips v. Labour Court, (1993} Lab. IC 1455, 257
Jabalpur, (1978) Lab. IC 1531, 404
Jagannatham v. State of Andhra Pradesh, (1958) 1 LLJ, 202,362
Jagbir Singh v. Haryana State Agriculture Marketing Board 2009 LLR 1254, 526
Jagdamba Auto Industries v. Kamal Yadav, 45 (1991} DLT 125,342
Jagdamba Prasad Shukla v. State of UP AIR 2000 SC 2806, 575
Jagdish Singh v. Punjab Engineering College (2010) 1 SLR 166, 609
Jaipur Milk Supply Scheme v. Labour Court, Jaipur, (1976) Lab, IC 863 (Raj.}, 229
Jaipur Zila Sahkari Bhoomi Vikas Bank Ltd v. Ram Gopal Sharma (2002} ILLJ 834 (SC.}; (2002} 2 SCC
244,646
Jamia Hamdard v. KS Durrany, (1992} 1 LLJ 874 (Delhi}, 267
Jan Chowkidar (Peoples Watch) v. State of Bihar (2009} 4 LLJ 870,437
Janardhan Mills Ltd v. Certain Workman, (1953) 1 LLJ 344, 248
Jaswant Sugar Mills Ltd v. Shri D Smith, (1954) 2 LLJ 337, 249
Jaswant Sugar Mills v. Lakshmi Chand, AIR 1963 SC 677,349
Jay Engineering Works Ltd v. Staff, AIR 1968 Cal. 407, 121,123,411
Jaya Bharat Tile Works, (1954) 1 LLJ 286 (Mad.), 535
Jayhind Engineering v. State of Karnataka (2004) Lab. IC 989, 549
Jaypore Sugar Co. Ltd v. Their Employees, (1955) 2 LLJ 444 (LAT}, 461,290
Jeewan Dalio v. Metal Box Co., (1952) 2 LLJ 869,407
Jeewan Lal (1929) Ltd v. State of West Bengal, (1975) Lab. IC 1161 (Calcutta}, 323
Jhagrakhand Collieries (Pvt.) Ltd v. Central Government Industrial Tribunal, (1960} 2 LLJ 71 (SC}, 292,329
Jharia Fire Bricks & Pottery Works v. B Sharma, (1977) 2 LLJ 366 (Patna), 336
JK Iron and Steel Co. Ltd v. Mazdoor Union, AIR 1957 SC 78, 81,353
Jossie v. Flag Officer Commanding-in-Chief, 2011 LLR 1168, 16,660
Jute and Jute Goods Buffer Stock Association v. Second Industrial Tribunal, Matter No. 654 of 1970, 201
Jute Mills, West Bengal v. Their Workmen, (1952) 1 LLJ 264 (IT}, 249
Jute Workers Federation v. Clive Jute Mills, (1951) 1 LLJ 663,419
 List of Cases • xxxi

K
KC Das v. State of West Bengal, (1960) 2 LLJ 505 (Calcutta), 228
KC P Ltd v. Inspector of Police, Tiruvottiyur, 1993 ILLJ 365, 125
KC P Ltd. v. The Presiding Officer, (1997) 1 LLJ 308: AIR 1997 SC 2334, 289
KC Sharma v. Delhi Stock Exchange, 2005 LLR 417 (SC), 49
K Devender Reddy v. Singareni Collieries Company Ltd, (1999) LLR 242, 642
K Gurumurthy v. Simpson & Co.,(1981) 2 LLJ 36,478
K K Khandilkar v. Indian Hume Pipe Co., Ltd, AIR 1967 Born. 531,321
K Kraipak v. Union of India, AIR 1970 SC 150, 582
KL Ahuja v. State of Haryana, 2011 (2) SLR 497, 582
KN Gupta v. Union of India, AIR 1968 Delhi 85, 580
K P Singh v. SK Gokhale, (1970) 1 LLJ 125 (Madhya Pradesh), 301,324,455
K R. B. Kaimal v. Director of Postal Services (1979) 1 LLJ 176 (Kerala), 227
KT Rolling Mills Ltd v. MR Mehar, (1962)2LLI 667 (Bom.), 482,485
KV Rajendran v. Deputy Commissioner, (1980) 2 LLJ 276 (Mad.), 517
KV Sridharan and Others v. S Sundermoorthy, 2009 LLR 414, 84, 89, 132, 138
Kailash Nath Gupta v. Inquiry Officer (R K Raj), Allahabad Bank, 614
Kairbetta Estate v. Rajmanickam, (1960) 2 LLJ 275 (SC), 332,416,419,474,476
Kaivalyadham Employees Association v. Kaivalyadham SMYM Samity, 2009 LLR 340 (SC), 343
Kalindi v. Tata Engineering and Locomotive Company Ltd, AIR 1960 SC 914: (1960) 3 SCR 407,583,584
Kalinga Tubes v. Their Workmen, (1969) 2 LLJ 557, 566 (SC), 545
Kallakurichi Taluk Cooperative Housing Society Ltd v. M Maria Soosai 2010 LLR 1016; (2010) 6 SCC 690,612
Kaloo Singh v. Madan Lal, (1985) Lab. IC 130 (Rajasthan) (1959) 2 LLJ 553, 312
Kalvalyadham Employees Association v. Kalvalyadham SMYM Samity, 2009 LLR 340 (SC), 347
Kalyani (PH.) v. AIR France, (1903) 1 LLJ 679 (SC), 649
Kameshwar Prasad v. State of Bihar AIR 1962 SC 1166, 426,427
Kan Singh v. Distt. Ayurved Officer, 2012 LLR 325 (Patna), 261
Kandan Textile Ltd v. Industrial Tribunal, AIR 1951 Mad. 661, 83, 191, 197
Kanhaiyalal Agrawal v. Gwalior Sugar Co. Ltd (2001) 9 sec 609; 2002 sec (L&S) 257; AIR 2001 SC 3645, 627
Kanpur Woolen Mills v. Kanpur mazdoor Congress, (1950) LLJ 61. 1. (IC), 186
Karan Singh v. Executive Engineer, Haryana State Marketing, 2007 LLR 1233, 387
Karnal Leather Karamchari Sangathan v. Liberty Footwear Co, (1989) 2 LLJ 550 (SC), 149,301,304
Karnami Properties Ltd. v. State of West Bengal, (1990) 2 Lab. IC 1677 (SC), 229
Karnataka State Road Transport Corporation v. B S Hullikatti (2001) ILLJ 725,600,601
Kartikeshwar Panda v. State of Orissa, (1971); 1 LLJ 70 (Orissa), 376
Karunandh v. Union of India, AIR 1979 SC 878, 41
Kasturi and Sons (Pvt) Ltd v. Salivateeswran, (1958) 1 LLJ 527 (SC), 332
Kathayee Cotton Mills Ltd v. District Labour Officer (1988) 1 LLJ 417 (Ker.), 301
Katkona Colliery Western Coalfields Ltd v. Central Government Industrial Tribunal cum Labour Court,
Kays Construction Co. (P) Ltd v. Its Workmen, AIR 1959 SC 208: (1958) 2 LLJ 660 (SC), 188, 190, 270
Kays Construction Company v. State of Uttar Pradesh, (1965) 2 LLJ 429 (SC), 485
KEC International Ltd v. Kamani Employees Union (1998) CLR 3, 658
Kedar Nath Purshottam & Co. Ltd., (1952) 2 LLJ 349,559
Kemp and Co. Ltd v. Its Workmen, (1955) 1 LLJ 48 (LAT), 272
Kerala Agro Machinery Corp. Ltd v. Industrial Tribunal, (1998) 2 LLJ 7, 690
Kerala High Court in AK Kalippa Chettiar & Sons v. State of Kerala (1970) 1 LLJ 97 (Kerala), 454
Kerala Rubber and Reclaims Ltd v. PA Sunny, (1989) Lab. IC 964 (Kerala), 161, 185
xxxii • List of Cases

Kerala State Electricity Workers Federations v. Kerala State Electricity Board, (1983) 1 LLJ 435, 442
(Kerala), 425
Kesavo Bhat v. Sree Ram Ambulam Trust, (1990) Lab. IC NOC 104 (Kerala), 268
Kesoram Rangan Workmen's Union v. Registrar of Trade Unions, (1968) 1 LLJ 335 (Calcutta), 94
Keventers Karmachari Sangh v. Lt Governor, Delhi, 39 FLR 206 (1971), 452,453
Khadi Gram Udyog Sangh v. Jit Ram, (1975) 2 LLJ 413 (Punjab and Haryana), 688, 690
Khatri v. State of Bihar, (1981) I sec 635, 43
Kirloskar Electric Co. v. Their Workmen, AIR 1973 SC, 2119, 349
Kirloskar Oil Engines Ltd v. Its Workmen, (1962) 2 LLJ 675,394
Kirloskar Oil v. H L Bibawe, (1963) 1 LLJ 126, 654
Kirtiben B Arain v. Mafatlal Apparels, (1995) (2) Guj LR 804, 344
Kishorilal v. Union of India, AIR 1959 SC 1362, 352
KKE Association v. Industrial Tribunal, AIR 1959 Mysore, 235,236,685
Kmaymmal v. State of Kerala, (1983) 1 LLJ 267,228
Kondalnao v. Registrar of Trade Unions, (1952) 1 LLJ, 88
Kovai Periyar Maavatta Dravida Panchalai Thozhilalar Munnetra Sangam, Coimbatore v. Commissioner of
Labour (Registrar of Trade Unions), Chennai, 2004) 1 LLJ 6, 90
Krishan Bhagya Jal Nigam V. Mohammed Rafi (2009) 11 sec 522, 515
Krishna Distt Cooperative Marketing Society Ltd v. NV Purnachandra Rao, (1987) Lab. IC 1651 (SC), 203,487
Krishna Keshov Laboratories v. Ashwmbhai G Raval (1999) LLR 210, 657
Krishna Lal v. General Manager, Haryana Roadways, Rohtak, 2011 LLR 359, 162
Krishna Singh v. Executive Engineer, Haryana State Agricultural Marketing Board, Rohtak, 2010 (2), SCALE
848,53
Krishnagiri District, 2009 LLR 62, 126
Krishnakali Tea Estate v. Akhil Bharatiya Mazdoor Sangh, (2004) 8 SCC 200, 587
Krishnan Kutty Nair v. Industrial Tribunal, (1957) 2 LLJ 45 (Kerala), 322
Krishnaveni Transports & Others v. Special Deputy Commissioner of Labour, Madras, (1989) 2 LLJ 245,301
KSEB v. KSEB Trade Union, (1987) 2 LLN 560, 97
Kuchni v. State of Madras, AIR 1959 SC 725, 349
Kuldeep Singh v. GM, Instrument Design Development and Facilities Centre, 2011 (2) SLR 376,387
Kunjan Bhaskaran v. Sub-Divisional Officer, Telegraphs Changanassery, (1983) Lab. IC 135 (Kerala), 229
Kurukshetra Central Co-operative Bank Ltd v. State ofHaryana 1993 (66) FLR 197,497

L
L Chandra Kumar v. Union of India (1997) 3 SCC 261,431,437
L H Sugar Factories & Oil Mills (P) Ltd v. State of UP, (1961) 1 LLJ 686, 164
LI C of India v. Consumer Education and Research Centre, (1995)5 SCC 482, 6
L K Textile Mills v. Its Workman, AIR (1961) SC 860,640
L K Verma v. HMT Ltd 2006 LLR 296 (SC), 614
L Michael v. Johnson Pumps Ltd, AIR 1975 SC 661; (1975) 1 LLJ 262,570,565
L Robert D 'Souza v. Executive Engineer, Southern Railway (1982) 1 SCC 545; AIR 1982 SC 854; (1982) 1
LLJ 330,495,496, 505
L. Chandra Kumar v. Union of India, (1997) Lab. IC 1098 (SC), 348
L.G.N. Co. v. Workmen, AIR 1960 SC 219,224,352
Labour Appellate Tribunals (1963) 2 LLJ 65, 533
Labour Bureau, Industrial Awards in India, (1959) 119,623
Labour, Hyderabad, (2004) I LLJ 915, 161
Lakshmi Devi Sugar Mills Ltd v. State of Uttar Pradesh, (1995) 2 LLJ 250,248,249
 List of Cases • xxxiii

LA:kshmi Devi Sugar Mills v. Ram Sarup, (1957) 1 LLJ 17 (SC}, 401,402,419,572,638,641
LA:kshmi Vilasam Tile Works Kerala, 461
LA:l Mahammad v. Indian Railway Construction Ltd 1999 Lab. IC 407 (SC}, 505,520,549
LA:l Nigam v. Chairman & MD, ITI Ltd, (2007} 1 LLJ 223 (SC}, 582
LA:lbhai Tricumlal Mills Ltd v. Vin (D.M.) (1956)1 LLJ 557,558,366
LA:lia Ram v. D CM Chemical Works, AIR (1978) SC 1004, 640
LA:liteshwar Prasad v. Bateshwar Prasad, AIR 1966 SC 580,585,352
LA:lla Ram v. DCM Chemical Works Ltd, (1978) 1 LLJ 507, 563
Landra Engineering & Foundary Workers v. Punjab State, (1969} Lab. IC 52,301
Laxmi Engineering Industries v. State of Rajasthan and Others (2003} LLR 816,318
Laxmi Starch v. Kundra Factory Workers Union (1992} Lab IC 1337 (Ker.}, 553
LIC of India v. Raghvendra Seshagiri Rao Kulkarni, 1998 Lab. IC 41 l(SC}, 496
Life Insurance Corporation of India v. DJ Bahadur, AIR 1980 SC 2181, 171
Lister Antiseptic and Dressing Co. Ltd v. Their Employees, (1951) 2 LLJ 791 (IT), 186
Lloyds Bank Ltd v. Lloyds Bank Union Staff Association, AIR 1956 SC 746,323,330
Lloyds Bank Ltd. v. P L Gupta, AIR 1967 SC 428, 254
Lord Krishna Sugar Mills Ltd v. State of Uttar Pradesh, (1964} 2 LLJ 76 (All.}, 419
Lord Krishna Textile Mills v. Its Workmen, (1961} 1 LLJ 211 (SC}, 649, 651

M
MA David v. KS E Board, (1973) 2 LLJ 466, (Kerala) 1973, 132
MC Raju v. Executive Director, (1985) 1 LLJ 210, 696
ML Base & Co. (Pvt.) Ltd v. Its Employees, (1961} 2 LLJ 107 (SC}, 466,624
MM Wadia Charitable Hospital v. (Dr) Umakant Ramchandra Warerkar, (1997} 2 LLJ 549,263
M Muniswami v. Superintending Engineer, Vellore Electricity, (1969) ILLJ 89,581
M P Collieries Workers Federation v. United Colliers, (1972} Madh. Pr LJ 79,124
M P Electricity Board v. Jagdish Chandra Sharma (2005) 3 SCC 401, 604
M P Irrigation Karamchari Sangh v. State of M P, (1985) 1 LLJ 519,378
M P State Textiles Corporation Ltd v. Mahendra (2005) LLR 706, 503
M P Vidyut Karmchari Sangh v. M P Electricity Board (2004) 9 SCC 755: (2004) 2 LLJ 470, 680
MR P Workers Union v. Govt of Tamil Nadu (2009} 4LLJ 685, 141
MS Manickam v. Cheran Transport Corporation, (1981} 1 LLJ 396 (Madras), 642
MT Chandrasennan v. N Sukumaran, AIR 1974 SC 1789, 112
M UM Services Ltd v. RT A Malabar, AIR 1954 Mad. 59,389
M Venugopal v. Divisional Manager, Life Insurance Corporation of India, Machalipatnam,A P (1994) 2SCC
323: (1994 AIR sew 778), 497,503
Mis Altherton West and Co. Ltd v. Jute Mill Mazdoor Union, AIR 1953 SC 24, 184
Mis Avon Services Production Agencies (P) Ltd v. Industrial Tribunal, Haryana AIR (1979) SC 120, 540
Mis Avtec Limited, Power Products Division Poonapally, Hosur v. Superintendent of Police,
Mis B D K Process Control Pvt. Ltd v. Bhartiya Mazdoor Sangh, 654
Mis Bharat Cooking Coal Ltd v. Their Workmen 2008 (1) JCR 255 (SC}, 344
Mis Bharat Heavy Electricals Ltd v. State of Uttar Pradesh & Other, 2003) LLR 817, 265
Mis Brakes India Ltd v. Asstt. Labour Commissioner, (1994) Lab. IC 552, 642
Mis Delhi International Airport Pvt. Ltd v. Union of India, 2011 (10) SCALE 478,270
Mis Deoria Sugar Mills Ltd v. Deputy Labour Commissioner, 1977 Lab. IC 102 (Allahabad}, 699
Mis Expo Modern Ltd v. LA:bour Court, (1995) LLJ 816,314
Mis Glaxo LA:boratories (I) Pvt. Ltd v. Presiding Officer, LA:bour Court (1984) 1 SCC 1, 702
Mis Glodstone Lyall & Co. Ltd v. State of West Bengal, (1983} Lab. 1 C 1425 (Cal.}. 531
xxxiv • List of Cases

Mis J K Cotton Spinning and Weaving Mills Co. Ltd, Kanpur v. State of UP (1990} II CLR 542,498
Mis John and Mani Agencies v. Labour Court Madras, (1991) Lab. IC 306 (Madras}, 202
Mis National Iron and Steel Co. Ltd v. State of West Bengal, 1967 (14) FLR 356,507
Mis Northbrook Jute Co. Ltd v. Their workmen, AIR 1960 SC 879,274
Mis Orissa Textile and Steel Co. Ltd v. State of Orissa 2002 LLR 225, 553
Mis Oswal Agro Ltd v. Oswal Agro Furane Workers (2005) LLR 305, 520
Mis Pfizer Ltd v. State of UP, 2010 LLR 586, 260
Mis Pierce Leslie and Co. Ltd Alleppey v. Their Workmen, 461
Mis Reetu Marble v. Prabhakaran Shukla, (2010} 2 SCC 70, 528
Mis Reetu Marbles v. Prabhakant Shukla (2010} 2 SCC 70, 632
Mis Tata Iron and Steel Co. Ltd v. The Workmen (1972} 2 LLJ 259,657
Mis Western India Match Co. Ltd v. Western India Match Company Workers' Union, (1970) 2 LLJ 256
Mis. Hindustan Steel Ltd v. Labour Court, AIR 1977 SC 31,493
Mis. Hochtief Gammon v. State of Orissa, (1975) 2 LLJ 418 (SC}, 376
Mis. Juggat Pharma (P) Ltd v. Deputy Commissioner of Labour, Madras, (1982} 2 LLJ 71, 282
Mis. Pierce Leslie and Co. Ltd v. Their Workmen, 469
Machinnon Machenzie and Co. v. L M Lassk, (1970) 1 LLJ 16 (SC}, 201
Madan Gopal v. R S Bhatia, AIR 1975 SC 1898, 254
Madhavan Kutty v. Union of India (1982} 2 LLJ 212 (Kerala}, 280, 282
Madhya Pradesh Irrigation Karamchari Sangh v. State ofMadhya Pradesh, (1972} 1 LLJ 374 (MP) (D.B. }, 229
Madhya Pradesh State Electricity Board v. SK Yadav (2009} 2 SCC 50,701
Madras Gymkhana Club Employees' Union v. Gymkhana Club, (1967} 2 LLJ 720, 729 (SC}, 179,183,214,
217,220
Madras Machine Tools Manufactures v. Special Deputy Commissioner of Labour, (1979) 2 LLJ 331
Mafatlal Narain Das Barot v. Divisional Controller, (1966} 1 LLJ 437 (SC}, 563
Mahabir Jute Mills v. Shibanal Saxena, (1975) 2 LLJ 326 (SC}, 390
Mahabir v. 0 K Mittal, Dy. Chief Mechanical Engineer, N.E. Rly (1979) 2LLJ 363,499
Mahadevan P Vv. MD, Tamil Nadu Housing Board (2005) LLJ 527,574
Mahahoob Sahi Kalbarga Mills Co. Ltd v. Their Employees, (1959) 2 LLJ 196, 186
Mahajan Borewell Company v. Rajaram Bhat, (1998} LLR 363 (Karnataka}, 268
Mahalakshmi Sugar Mills v. Their Workmen, (1961} 2 LLJ 622 (SC}, 353,460
Mahalaxmi Mills Co. Ltd v. Labour Court, (1965) 1 LLJ 517 (Rajasthan), 701
Maharaj Kishengarh Mills Ltd, (1953) 2 LLJ 214 (Raj.}, 535
Maharama Mills Kamgar Union v. NL Vyas, (1959) 2 LLJ 172 (Bombay), 322
Mahboob Deepak v. Nagar Panchayat, Gajraula (2008} 1 SSC 575, 524
Mahesh Chandra Sharma v. State of Rajasthan, (1974) Raj. LW 338 (Raj.}, 229
Mahila Samiti v. State of M.P, (1989} Lab. IC 891 (Madhya Pradesh), 228
Mahindra & Mahindra Ltd v. NB Naravada (2003) 9 SCC 32,614
Mam Chand v. State of Haryana, (1989) Lab. IC NOC 42 (P & H}, 268
Management of Bihar Khadi Gramodyog Sangh v. State of Bihar, (1977) Lab. IC 466 (Patna), 229,323
Management of Bisra Stone Lime Co. Ltd v. Their Workmen (1992} Lab. IC 451 (Orissa), 503
Management of Delhi Development Authority v. Shri Radhey Shyam Tyagi & Anr., (1996} (74) I.F.L.R, 342
Management of Gauhati Press (P) Ltd v. Labour Court, (1983}Lab. IC 824,476
Management of Gordon Woodroffe Agencies Pvt. Ltd v. Presiding Offi cer, Principal Labour Court & Ors
2004 LLR 881, 544
Management of Hindustan Machine Tools Ltd, Bangalore v. Mohd. Usman (1997} 1 LLN 391 (SC}, 599
Management of Hospital, Orissa v. Their Workmen, (1971} Lab. IC 835 (SC}, 210
Management of Indian Cable Co. Ltd v. Workmen131962 Supp (3) SCR 589,511
 List of Cases • xxxv

Management of ITC Ltd v. LA:bour Court (1978), 2 LLJ 354, 632

Management of Karnataka State Road Transport Corporation v. KSRTC Staff and Workers
Management of Krishnakali Tea Estate v. Akhil Bharatiya Chah Mazdoor Sangh JT 2004 (7) SCC 333: (2004)
8 sec 200, 616
Management of KSB Pumps Ltd v. Presiding Officer, Labour Court 2010 LLR 813,346
Management of Manipal Power Press v. Sadananda Devadiga, (2004) LLR 644, 690
Management of Nagammal Mills Ltd v. Kumari Mavatta Noorppalal Thozilalar Munnetra
Management of Needle Industries v. Labour Court, (1986} 1 LLJ 405 (Madras), 374
Management of Pandian Roadways Corporation v. LA:bour Court, (1994) Lab. IC 1817, 294
Management of Panitola Tea Estate v. The Workmen (1971} 1 SCC 742; AIR 1971 SC 2171, 597
Management of Puri Urban Cooperative Bank v. Madhusnhan Sahu, (1992} Lab. IC 1462 (SC), 268
Management of Radio Foundation Engineering Ltd., v. State of Bihar, (1970) Lab. IC 1119 (Patna), 229
Management of Safdarjang Hospital v. Kuldip Singh Seth, AIR 1970 SC 1407, 209
Management of Salem District Co-operative Milk Producers' Union Ltd v. Industrial Tribunal 2010 LLR
435,660
Management of Sonepat Cooperative Sugar Mills Ltd v. Ajit Singh, (2005) LLR 309, 266
Management of Standard Motor Products of India Limited v. A Parthasarathy 1986 Lab. 101 (SC}, 511
Management of Thanjavur Textiles Ltd v. Purushotam 1999 (2) SCALE 216, 577
Management of Theatre Sanjaya v. The State, (1984) 2 LLJ 400,389
Management Shahdara (Delhi) Sharanpur Light Railway Co. Ltd v. S S Railway Workers Union, AIR 1969
Management, Essoripe Mills Ltd v. Presiding Officer, LA:bour Court and Others (2008} 7 SCC 594,446
Manager RBI Bangalore v. S Mani 2005 LLR 737, 513
Managing Director Electronics Corporation of India v. B. Karunakaran (1996) 4 SCC 727, 591
Managing Director, ECIL v. B Karunakar, JT 1993 (6) SC 1,571
Managing Director, Harynana Seed Development Corporation v. Presdiging Officer, (1979) LLR 806 (SC}, 540
Manak Chandy, Municipal Council, AIR 1951 Raj. 139,351
Maneka Gandhi v. Union of India, (1978) 1 SCC 248, 572
Mangalambika Metal Industries v. Its Workmen, 1958 1 LLJ 419 (SC}, 629
Manish Goel v. Rohini Goel AIR 2010 SC 1099; JT 2010 (3) SC 189,618
Manoharan Nair v. State of Kerala5, (1983) 1 LLJ 13, 283
Mar Basellos Medical Mission Hospital v. Dr Joseph Babu, 2010 LLR 376, 262
Martin Burn Ltd v. Banerjee (RN), (1958) 1 LLJ 247, 640, 644
Matchwel Electricals Company (India) Ltd v. Chief Commissioner, (1962} 1 LLJ 545 (Punjab}, 406
Maulis of India Ltd v. State of West Bengal, (1989} 2 LLJ 400,553
May & Baker India Ltd v. Their Workman, AIR 1976 SC 678, 259
May & Baker Limited v. Kishore Jain Kishan Dass Icchaporie, (2009} 4 LLJ 153 (Born.}, 710
Mayank Desai v. Sayaji Iron and Engineering Co. Ltd, (2011) II CLR 485, 251
Md. Manjur & Ors v. Syam Kunj Occupants' Society & Others, (2004) LLR 863,220,265
Md. Yasin v. Industrial Tribunal, (1975) 1 LLJ 100 (Orissa}, 685
Meghraj Kishangarh Mills Ltd, (1953) 2 LLJ 214 (Rajasthan}, 453
Meghraj v. State of Rajasthan, (1956) 1 LLJ 366,427
Mehar Singh v. Delhi Administration, ILR (1973) 1 Delhi 732,323
Mettur Industries v. Verma, (1958) 2 LLJ 326,680
Mhd. Yasin v. Town Area Committee, (1952) SCR 572,350
Midland Rubber & Produce Co. Ltd, Cochin v. Superintendent of Police, Pathanamthitta and Others, (1999}
1 LLJ 385, 126
Mineral Industrial Association v. Union of India, (1971} Lab. IC 837,301
Mineral Miner's Union v. Kudremukh Iron Ore Co. Ltd (1986} 1 LLJ 204 (Kamataka}, 450
xxxvi • List of Cases

Minerva Mills Ltd v. Their Workers, (1954) 1 LLJ II 9 (SC}, 362; AIR 1953 SC 505, 507, 308
Mini Chatterjee v. PSC, AIR 1958 Calcutta 345, 350
Mining and Allied Machinery Corporation Ltd, (by its law officer and constituted attorney N X Mandal)
v. Superintendent of Police, St. Thomas Mount, Madras, (1987) 2. LLN 294, 125
Miss A Sundarmbal v. Govt of Goa, Daman & Diu, (1989) 1 LLJ 62 (SC}, 261,436
MKE Association v. Industrial Tribunal, AIR 1959 Mysore 235, 236, 684
Model Mills Ltd v. Dharam Das, AIR 1958 SC 311: (1958) 1 LLJ 539 (SC}, 352,353,436,462,466,465,560
Modella Textile Workers Union v. Union of India, (1980} Lab. IC 949,319
Modern Stores Cigarettes v. Krishadas Shah, (1970) Lab. IC 196, 301
Modi Food Products and Co. Ltd v. Faquir Chand Sharma, (1956) I LLJ, 749,486
Mohan Lal v. Bharat Electronics (1981} 2 LLJ 70: (1981} 3 sec 225: 1981 sec (L&S)478: AIR 1981 SC
1253,495,496,505,509
Mohd. Yasin v. Industrial Tribunal, (1975) 1 LLJ 100 (Orissa}, 690
Moorco (India) Ltd v. Government of Tamil Nadu, (1993} Lab. IC 1663, 300
Marinda Co-op Sugar Mills Ltd v. Ram Kishan JT 1995 (6) SC 547,502
MP Administration v. Tribhuwan (2007} 9 SSC 748, 524
MP State Electricity Board v. farina Bez (2003} 3 LLJ 244; 2003 LLR 848, 630
MRF United Workers Union Rep. by its General Secretary v. Government of Tamil Nadu, 2010 LLR 165
(H.C. Madras), 161
MSCO (P) Ltd v. S D Rana, (1982} 1 LLJ 431,437,321
Muir Mills Case, AIR 1995 SC 170, 4
Mukesh K Tripathi v. Senior Divisional Manager, LI C and Ors, (2004) 1 LLR 993: (2004) 8 SCC 387,258,263
Mukund Iron Steel Works Ltd v. V V Deshpande, (1986} Lab. IC 1612 (Bombay}, 96
Mukund Ram Tanti v. Registrar of Trade Unions AIR 1962 Pat. 338: (1963) 1 LLJ 60, 89, 106
Mum Services Ltd v. RT A Malabar, AIR 1953 Madras, 59,389
Municipal Board, Amroha v. UP Public Service Tribunal (2001} 2 LLJ 1221, 712
Municipal Committee, Bahadurgarh v. Krishnan Bihari AIR 1996 SC 1249, 619
Municipal Committee, v. Industrial Tribunal (1971) 2 LLJ 52 (Punjab and Haryana}, 449
Municipal Corporation of Bombay, (1978) 2 LLJ 168 (SC}, 568
Municipal Corporation of Delhi v. Ganesh Razak and another, (1995) 1 LLJ 395 (SC}, 335
Municipal Corporation, Faridabad v. Shri Niwas (2004) 8 SCC 195, 513
Municipal Employees' Union v. Additional Commissioner (Water), Delhi Water Supply and Sewerage Disposal
Undertaking (1996} LLR 103 (Delhi}, 566
Murgan Mills v. Industrial Tribunal, (1965) 2 SCR 148,565
Murgan Transport v. Its Workers, (1960} 1 LLJ 349, 197
Muriadih Colliery BCC Ltd v. Bihar Colliery Kamgar Union (2005) 3 SCC 331, 604
Murugalli Estate v. Industrial Tribunal, (1964) 2 LLJ 164 (Madras), 197,252
Muzaffarpur Electric. Supply Co. Ltd v. SK Dutta, (1970) 21 Fae LR 321 (Patna}, 651
Mysore Iron and steel Works Labourers' Association v. Commissioner of Labour and Registrar Trade Unions,
(1972} Lab. IC 779, 96, 97, 100
Mysore Machinery Mfg. Co. Ltd v. State of Mysore, (1967} 2 LLJ 853, (Madras), 402

N
NA Choudhary v. Central Inland Water Transport Corporation Ltd, (1978) 1 LLJ 167 (SC}, 332
NE Merchant v. Bombay Municipal Corporation, (1968} 1 LLJ (Bombay), 213
N K Singh v. Union of India, (1995) 1 LLJ 854 (SC}, 108
N Karappann v. Additional Registrar of Trade Unions, (1976) Lab. IC 1388, 80
Najeema Beevi v. Public Service Commission, (1983} 1 LLJ 433 (Ker.}, 228
 List of Cases • xxxvii

Namor Ali v. Central Inland Water Transport Corporation Ltd, AIR 1978 SC 275,334
Narinder Mohan Arya v. United India Insurance Co. Ltd, 2006 (109} FLR 705 (SC}, 580
Nathaniel Masih v. UP Scheduled Caste Finance & Development Corporation Ltd, (1989} 2 Lab. IC 2276
(All}, 268
National Bank v. Their Workmen, 466
National Engineering Industries Ltd v. Shri Kishan Bhageria, (1988} (56) FLR 148 (SC}, 252,254
National Engineering Industries v. State of RajasthanlOl (2000) 1 SCC 371, 295
National Iron & Steel Co. Ltd v. State of W. Bengal, (1967} 2 LLJ 23 (SC}, 246
National Project Construction Corporation Ltd v. Their Workmen, (1960} Lab. IC 907 (Patna), 302,349,350
National Remote Sensing Agency v. Additional Tribunal-cum-Additional Labour Court, Hyderabad, (2003}
LLR 108,235
National Union of Commercial Employees v. MR Mehar, AIR 1962 SC 1080, 212, 220
Navneet R Kamwni v. RR Kaniani AIR 1989 SC 9, 725
NDMC v. Mohd. Shamim 2003 LLR 524, 700
Nedungadi Bank Ltd v. K P Madhavankutty, (2000} 2 sec 455,386
Neeta Kaplish v. Presiding Officer, Labour Court, (1999} 1 LLJ 275 (SC}, 597, 598
Nellimarla Jute Mills Co. Ltd v. Their Staff, (1950) LLJ 394, 135
New Horizon Sugai Mills Ltd v. Ariyur Sugar Mill Staff Welfare Union (2009) 3 CLR 682, 538
New India Assurance Co. Ltd v. Central Government Industrial Tribunal, (1954) 2 LLJ 21 (Patna}, 191
New India Assurance Co. Ltd. v. Vipin Behari Srivastava (2008} 3 SCC 446, 261, 608
New India Motors Pvt Ltd v. Morris (KT), (1960} 1 LLJ 551, 638
New Jehangir Vakil Mills Ltd, Bhavnagar v. NL Vyas, (1958) 2 LLJ 573,637
New Victoria Mills v. Labour Court, AIR 1970 Alld. 210, 213, 677
Newspapers Ltd v. State Industrial Tribunal, AIR 1957 SC 537: (1995) 2 LLJ 1 (SC}, 119,191,192,196,349
Newton Studies Ltd v. Ethirajulu, (1950) 1 LLJ 628, 638
NGEF Ltd v. Industrial Tribunal, AIR 1970 Mysore 149,150,690
Niemla Textile Finishing Mills Ltd v. Industrial Tribunal, Punjab, (1957) 1 LLJ 460 (SC}, 39
Nirmal Singh v. State of Punjab, AIR 1984 SC 1619: SLJ (P & H} 674, 268, 377, 391
Noida Entrepreneurs Association v. Noida (2007} 10 SCC 385, 588
North Brook Jute Co. Ltd v. Their Workmen, (1960} 1 LLJ 480 (SC}, 467
North Brook Jute Co. Ltd v. Workmen, AIR 1960 SC 879,658
North Eastern Railway Employees' Union v. Addl. District Judge, (1989} Lab IC 44 (SC}, 89
North Eastern Railway Employees' Union v. Registrar of Trade Unions, 1975 Lab. IC 860 (Allahabad}, 89
North Orissa Workers' Union v. State of Orissa (1971) 2 LLJ 199,300,301
North-Eastern Railway Employees' Union, Gorakhpur v. The Registrar ofTradeUnions, UP, Kanpur 1975
Lab. IC 860, 90
Northern Dooars Tea Co. Ltd v. Workmen (1964} 1 LLJ 436 (SC}, 470, 622
Novartis India Ltd v. State of West Bengal (2009} 3 SCC 124,612
Nuller and Phippa (India) v. Their Employers' Union, (1967} 2 LLJ 222, 533
Nutan Mills v. Employees' State Insurance Corporation, (1956) I LLJ 215 (Bombay}, 484

0
0 K Ghosh and Others v. EX Joseph, AIR 1963 SC 814: (1962) 2 LLJ 615, 94,428
0 P Bhandari v. Indian Tourism Development Corporation Ltd, (1986} 4 SCC 337, 48
Om Oilseeds Exchange Ltd v. Their Workmen, AIR 1966 SC 1657, 1959, 529
Om Prakash Jhumman Lai v. Labour Court, (1970) 1 LLJ 43 (Delhi), 230
ONGC Workmen's Association v. State of West Bengal, (1988} Lab. IC 555 at 560, 89, 94
Orchid Employees Union v. Orchid Chemicals & Pharmaceuticals Ltd, 2008 LLR 519, 125
xxxviii • List of Cases

Oriental Containers Ltd v. Engg. Workers Association, (1996) LLR 739,314,621

Oriental Textile Finishing Mills v. Labour Court, (1971) 2 LLJ 505 (SC), 628

p
PB Sivasankaran v. Presiding Officers, First Additional Labour Court, 2012 LLR 30 (Mad.), 259
P Channaiah v. Dy. Ex. Eng.(1996) (2) Lab LJ 240) (AP), 344
PH Kalyani v. Air France, (1964) 2 SCR 104,314
P Janardhana Shetty v. Union of India, (1970) 2 LLJ 738 (Mysore), 201
P Jost v. Director Central Institute of Fisheries, (1986) Lab. IC 1564, (Kerala), 230
PK V Distillery Ltd v. Mahendra Ram (2009) 5 sec 705, 528
PM Murugappa Mudaliar Rathina Mudaliar & Sons v. Raji Mudaliar, (1965) 1 LLJ 489,197,230
P SN Motors Ltd v. Their Workmen, 12 FJR 192,467
Punjab Dairy Development Corporation Ltd v. Industrial Tribunal (1997) 6 SCC 159,594
P V Gramin Bank v. D M Parmar, 2011 (131) FLR 1019, 579,589
P Virudhachalam v. Management of Lotus Ltd 1998 Lab. IC 834 (SC), 480
Padfield v. Minister of Agriculture, Fisheries and Food, [1968] AC. 997,391
Palace Administration Board v. State of Kerala, (1960) 1 LLJ 178,230
Pallavan Transport v. Labour Court, (1984) 2 LLJ 132 (Madras), 698
Panchmahal Vadodra Gramin Bank v. D M Parmar, 2011 (131) FLR 1019 (SC), 582
Pandiyan Roadways Corp. Ltd v. N Balakrishnan (2007) 9 sec 755: (2008) 1 sec (L&S) 1084, 589
Panyam Cement Employees Union affiliated to INTUC, Kurnool District v. Commissioner of
Panyam Cement Employees Union v. Commr. of Labour (2004), 1 LLJ 915, 77, 81
Pappammal Annachatrum v. Labour Court, (1964) 1 LLJ 493 (Madras), 218
Paradip Port Trust v. Their Workmen, AIR 1977 SC 36,320
Paramount Films India Ltd v. Their Workmen, (1950) LLJ 690, 129
Paramount Films of India Ltd v. State of Madras, (1959) 1 LLJ 68, 362
Parry & Co. v. Second Industrial Tribunal, AIR 1970 SC, 350
Parshotam Lal Dhingru v. Union of India, (1958) SCR 828,568
Pearlite Liners (P) Ltd v. Manorama Sirsi, (2004) 3 SCC 172; 2004 SCC (L&S) 453; AIR 2004 SC 1378, 628
People's Union for Democratic Rights v. Union of India, (1982) 2 LLJ 454, 42
Petlad Turkey Red Dye Works Ltd v. Dyes & Chemical Workers Union, (1969) 1 LLJ 548 (SC), 315
Petrolium Employee's Union v. Chief Labour Commissioner, 2010 LLR 214, 141
PF Employees' Union v. Addl. Industrial Tribunal, (1983) 2 LLJ 108 (Kerala), 228
Pfizer Employees' Union v. Mazdoor Congress, (1980) 1 LLJ 65 (Bombay), 135
Physical Research Laboratory v. KG Sharma, (1997) 4 SCC 257 (SC), 236
Pioneer Match Factory v. Their Workmen, (1951) 1 LLJ 43 (IT), 460,461
Pipraich Sugar Mills v. Pipraich Sugar Mills Mazdoor Union, (1957) 1 LLJ 235 (SC): AIR (1957) SC 95,
404,491,494
Plantation Corporation of Kerala v. P N Krishan Pillai, (1971) 1 LLJ 116 (Kerala), 324
Port and Dock Labour Union affiliated to Bharatiya Mazdoor Sangh v. Union of India, (2012) 1 LLJ 650, 138
Post Office, Postal Department, Ludhiana v. Baljit Singh, 2012 (1) SLR 199,235
Post Vaikam v. Theyyam Joseph, (1996) 8 SSC 489,235
Prabhudayal Himat Singh v. State of Punjab, AIR 1959 Punjab 460, 392
Prabhudayal v. Alwar SekJiari Bhumi Vikas Bank, (1990) Lab. IC 944 (Rajasthan), 229
Prabhulingappa H M Munichendragowda v. Divisional Controller, KSRTC, Kolar 2012 Lab. IC 221, 619
Prad.), 268
Pradip Lamp Works v. Its Workmen, (1970) 1 LLJ 507: (1969) 38 FJR 20 (SC), 196,197,470
Praful Mohan Das v. SAIL, (1992) 1 LLJ 621, 272
 List of Cases • xxxix

Fraga Tools Ltd v. Praga Tool Mazdoor Sabha, (1975) 1 LLJ 218, 295
Prakash v. M/s Delton Cables India (P) Ltd, (1984) Lab IC 658, 253
Pramod Jha v. State of Bihar (2003) 4 sec 619: 2003 sec (L&S) 545,505,507
Prasar Bharati Boardcasting Corporation of India v. Shri Suraj Pal Sharma (1999) LLR 352,318
Pravat Kumar Kar v. WTC Parker, (1949) 1 FJR 245, 529
Prem Kakar v. State of Haryana, (1985) Lab. IC 1001, 1005, 376, 377
Premier Automobile Ltd v. Kamlekar Shantaram Wadke (1976) 1 SCC 496, 135, 175, 705
Premier Automobiles Ltd v. GR Sapre, (1981) Lab. IC 221 (Bombay), 416
Premier Construction Co. Ltd v. Their Workmen, (1949) ICR 708, 135
Presidency Jute Mills Co. Ltd v. Presidency Jute Mills Co. Employee's Union, (1952) 1 LLJ 796 (LAT), 415
Pritam Singh v. The State, AIR 1950 SC 169 at 171,352
Provat Kumar Kar v. WT Parkar, AIR 1950 Cal. 116,440
Province of Bombay v. Khushaldas, AIR 1950 SC 222,349
Province of Bombay v. Western India Automobile Association, AIR 1949. Bombay 41, 559
Pruthvi Cotton Mills v. Brough Muni, (1969) 2 sec 283, 341
PSEB v. Leela Singh 2007 LLR 590 (SC), 618
Punjab and Sind Bank and Ors v. Sakattar Singh, JT 2000 (7) SC 529, 51
Punjab and Sind Bank v. Sakattar Singh 2001 LLR 155 (SC), 667
Punjab Beverages (P) Ltd v. Suresh Chand, (1978) 2 SCC 144: AIR 1978 SC 995,151,333,565,637,639,646
Punjab Cooperative Bank v. R S Bhatia, AIR 1975 SC 1526, 254
Punjab Dairy Development Corporation Ltd v. Kala Singh, (1997) 6 SCC 159,313
Punjab Land Development Corporation Ltd v. Presiding Officer, Labour Court, Chandigarh (1990) (61) FLR
73,499
Punjab National Bank Ltd v. A V Sen, AIR 1952 Punjab, 143,323
Punjab National Bank Ltd v. Its Workmen, (1959) 2 LLJ 666 (SC): (1952) 1 LLJ 531 (IT), 322,352,402,403,
464,465,466,560,572,624,626,639
Punjab National Bank Ltd v. PNB Employees' Federation, AIR 1960 SC 160, 629, 637
Punjab National Bank v. Ghulam Dastagir, (1978) 2 SCR 358, 246
Punjab National Bank v. Industrial Tribunal, (1959) SCR 220,352
Punjab National Bank v. Kharbanda, (1962) 1 LLJ 234,332
Punjab National Bank v. Kunj Behari Mishra, (1998) 7 SCC 84, 582
Punjab National Bank v. Ram Kanwar, (1957) ILLJ 542, 5
Punjab National Bank v. Vitro Pharma Products Ltd (1998) Lab. IC 444 (Bombay), 315
Punjab State Co-operative Supply and Marketing Federation Ltd v. Presiding Offi cer, Industrial
Pure Drinks (Pvt.) Ltd v. Kirat Singh, (1961) 2 LLJ 99,324
Puri Urban Cooperative Bank v. Madhusudan Sahu, 1993 Lab. IC 1462, 267
Purushottam Pottery Works, Dharangdhara, (1958) 2 LLJ 523 (IT), 270
Pushpabai Parshottam Udeshi v. Ranjit Ginning and Pressing Co. Pvt. Ltd, AIR 1977 SC 1735: (1977) 2
sec 745,644
PVK Distillery Ltd v. Mahendra Ram (2009) 5 sec 705, 632

R
RD Shetty v. International Airport, (1979) 3 SCC 489,369
R K Workmen's Union v. Registrar of Trade Unions, (1968) I LLJ 335, 93
RM Duraiswamy v. Labour Court1998 LLR 478, 321
RM Yellatti v. Executive Engineer (2006) 1 SCC 106,514
R Mallesham v. The Additional Industrial Tribunal, Malakpet, Hyderabad, (1990) Lab. IC NOC 158 (Andh.
R Murugesan v. Union Territory of Pondicherry, (1976) 1 LLJ 435 (Mad.), 90
xl • List of Cases

RN Shenoy v. Central Bank of India, (1984) Lab. IC 1493,470

RP Sawant v. Bajaj Auto Ltd, 2001 LLR 935, 162
R Rajamanickam v. Indian Bank, (1981} 2 LLJ 367,470
R S Madhoram & Sons Pvt. Ltd v. Its Workmen (1964) 1 LLJ 366 (SC}, 539
R S Nagar Central Electronics Ltd, (2003} 8 sec 171, 651
R SR TC v. Deen Dayal Sharma, 2010 (5) SCALE 45, 682
R Sreenivasa Rao v. Labour Court, Hyderabad, (1990} 1 Lab. IC 175 (Andhra Pradesh), 229
R Tanji v. Registrar of Trade Unions, Bihar, AIR 1962 Pat. 338, 88
R V National Joint Council for the Craft of Denal Technicians, (1953) All ER 327,302
Rabindranath Sen v. First Industrial Tribunal, (1963} 1 LLJ 567 (Calcutta}, 213
Radha Raman Samanta v. Bank of India (2004) 1 sec 605: 2004 sec (L&S) 248, 515
Radhakishan Jaikishan Ginning and Pressing Factory v. Jamnadas Nursery Ginning and Pressing Company
Ltd, AIR 1940 Nagpur 228, 83
Radhakrishna Mills (Pollachi) Ltd v. State of Madras, (1956) 1 LLJ 221,362
Radhey Shyam v. State of Haryana, (1998} 2 LLJ 1217, 200
Raghubir Dayal Jai Prakash v. Union of India, AIR 1962 SC 363, 132
Rai Sahib Ramdayal Ghasiram Oil Mills and Partnership Firm v. Labour Appellate Tribunal (1963} 2 LLJ 65
at 68; AIR 1964 SC 567; 24 FJR 266, 534
Railway Board, New Delhi v. Niranjan Singh, (1969) 2 LLJ 743, 124
Raizada Trilok Nath v. Union of India, AIR 1967 SC 759,581
Raj Kamal Kalamandir (Pvt.) Ltd v. Indian Motion Picture Employees Union, (1963} 1 LLJ 318 (SC}, 329
Raj Krishna Bose v. Binod, AIR 1954 SC 202,348,352
Raj Kumar Gupta v. Lt Governor, Delhi AIR 1997 SC 2600, 458,459
Raj Mukari v. State of Himachal Pradesh, (1989} Lab. IC 841 (Himachal Pradesh}, 228
Raj Narain v. State, AIR 1961 Mad. 531,410
Raja Bahadur Motilal Poona Mills v. Mills Mazdoor Sabha, (1954) 1 LLJ 124,424
Raja Kulkarni and Others v. State of Bombay, AIR 1954 SC 73,457
Rajasthan SRTC v. Bal Mukund Bainva, (2007} 14 sec 41,176
Rajasthan SRTC v. Ghamshyam Sharma (2002} 10 sec 330, 601
Rajasthan SRTC v. Khadarmal, (2006) 1 sec 59, 176
Rajasthan SRTC v. Mohar Singh (2008) 5 sec 542, 176, 706
Rajasthan State Ganganagar S Mills Ltd v. State of Rajasthan (2004) 8 SCC 161,514
Rajasthan State Road Transport Corporation v. Abdul Hussain, 2010 LLR 490, 637
Rajasthan State Road Transport Corporation v. Bal Mukund Bairwa (2009) 4 SCC 299,176,706
Rajasthan State Road Transport Corporation v. Krishna Kant, (1995) 5 SCC 75: 1995 LLR 481 (SC}, 175, 679
Rajasthan State Road Transport Corporation v. Zakir Hussain, (2005) 7 SCC 447,176
Rajender Kumar Kindra v. Delhi Administration, (1986) Lab. IC 374,381 (SC}, 312
Rajendra Jha V. Labour Court 1984 Supp sec 520,313, 598
Rajesh Garg v. The Management of the Punjab State Tubewell Corporation, (1984), SLJ (P & H} 693, 229
Rajinder Kumar v. Delhi Administration, 1986 Lab. IC 374 (SC}, 303
Rajkrishna v. Binod, AIR 1954 SC 202,350
Ram Ashrey Singh v. Ram Bux Singh, (2003} 2 LLJ 176,630
Ram Au tar Sharma v. State of Haryana 1985 Lab. IC 1001, 377, 648
Ram Das Tigga v. State ofJharkhand, (2004) LLR 936, 90
Ram Krishan Sharma v. Samrat Ashok Technical Institute 1995 Lab. IC 654, 508
Ram Krishna Ayyar Vaidyanathan v. Fifth Industrial Tribunal, (1968) LLJ 597 (Calcutta}, 213
Ram Krishna Iron Foundary v. Their Workers, (1954) 2 LLJ 372 (LAT), 424,426,461,462,464,468
Ram Naresh Kumar v. State of West Bengal, (1958) 1 LLJ 667 (Calcutta}, 417
 List of Cases • xii

Ram Prasad v. State of Bihar, Chintamani Rao v. State of MP, AIR 1951 SC 11 8; AIR 1953 SC 215,350
Ram Prasad v. Union of India, (1988} ATC 77,580
Ram Pukar Singh v. Heavy Engineering, (1995) LLR 201, 298
Ram Roop v. Vishwanath, AIR 1958 All. 256,351
Ram Sarup v. Rex, AIR 1949 All. 218,400
Ram Singh v. Union Territory, Chandigarh, (2004) 1 SCC 126, 247
Rama Kant Chaudhary v. SK Sarwatia (2003} LLR 129 (Del.}, 653
Rama Kant Mishra v. State of UP 2003 LLR 895, 613
Ramesh Kumar v. Central Government Industrial Tribunal, (1980} Lab. IC 1116 (Born.}, 494
Ramesh Kumar v. State ofHaryana, (2010} 2 SCC 543, 53
Rameshwar Dayal v. Indian Railway Construction Company Limited, 2011 (128} FLR 60 (SC}, 53
Rameshwar Manjihi v. Sangramgarh Colliery, AIR 1994 SC 1176, 198
Rameshwar v. Municipal Board, AIR 1958 Allahabad 841,350
Ramnagar Cane & Sugar Co. v. Jatin Chakravarthy, AIR 1960 SC 1012, 283, 293
Ramon Services (P) Ltd v. Subhash Kapoor, (2000}1 sec 118, 6
Rampa v. Bajappa, AIR 1963 SC 1833, 352
Ramrao Laxmikant Shirkhedhar v. Accountant General, Maharashtra, (1963} 1 LLJ 428 (Bombay), 428
Rangaswami v. Registrar of Trade Unions, AIR 1962 Madras 231, 79
Range Forest Officer v. Galabhai Kalabhai Damor, (2011} II CLR 528 (HC Gujarat), 237
Range Forest Offi cer v. S T Hadimani, 2002 Lab. IC 987, 512
Ranipet Greaves Employees' Union v. Commissioner of Labour, (2004) 2 LLJ 622, 89
Raruha Singh v. Achal Singh, AIR (1961), 352
Rashtriya Chemicals and Fertilizers Ltd v. General Secretary, FCI Workers 1997 LLR 654, 6
Rashtriya Colliery Mazdoor and Another v South Eastern Coalfields Ltd, 2009 Lab lC 2836, 114
Rashtriya Mill Mazdoor Sangh, Nagpur v. Model Mills 1984 (Supp} SCC 443; 1984 (49) FLR401, 368
Rasiklal V Patel v. Ahmedabad Municipal Corporation, (1985) FJR 225 (SC} 1995 LLR 8, 581
Ratan Kumar Dey v. Union of India, (1991} 2 LLN 506 (Gau.) (DB}, 88
Rathikanthamanal v. B Pankajaminal, (1988} 1 LLJ 423 (Madras), 336
Ratilal Bhogilal v. State of Gujarat, AIR 1966 S.C. 244,389
Rattan Kumar Dey v. Union of India, 1991 (2) LLN 506, 90
Ravi Yashwant Bhoir v. District Collector, Raigad (2012} 3 SCC 186 at 197,562
Raymond v. Ford Motors Co. Ltd, (1951) 1 LLJ 167,248
Raza Textile Labour Union v. Mohan, (1964} 2 LLJ 65 (Allahabad}, 299,302
Regional Manager v. Ghanshayam Sharma (2002) ILLJ 234, 600
Regional Manager, Bank of Baroda v. Anita Nandrajog 2009 LLR 1135, 609
Regional Manager, SBI v. Raja Ram, (2005) I LLJ 12 at 14-15, 161
Regional Provident Fund Commissioner v. Karnataka Provident Fund Employees Union, (1994) 2 LLJ 503
(SC},372
Registrar of Trade Unions in Mysore v. M Mariswamy, (1974) Lab IC 695, 85
Registrar of Trade Unions v. Fire Service Workers Union (1963} 1 LLJ 167, 80
Registrar of Trade Unions v. M Mariswami, (1973) 2 LLJ 256, 80
Registrar of Trade Unions v. Mihir Kumar Gooha, AIR 1963, Cal 56, 79
Remington Rand of India v. The Workmen, (1967) 2 LLJ 866 (SC}, 326
Reserve Bank of India v. Ashis, 73 CWN 388, (1969), 123
Reserve Bank of India v. C T Dighe (1981} 2 LLJ 223 (SC}, 641
Rex v. Sussex Justices, (1924) 1 KB 256 at 259,571
Rivers Steam Navigation Co. Ltd v. Inland Stream Navigation Workers Union, (1964} 1 LLJ 98 (Calcutta},
338,393
xiii • List of Cases

Roadways Mazdoor Sabha, UP v. State of UP, (2011}1LLJ 239, 90

Rodrick LA v. Karan Chand Thaper & Brothers (1963} 1 LLJ 248,647
Rohtak & Hissar District Electric Supply Co. Ltd v. State of UP, AIR 1966 SC 1471-1477, 666,677,684,
685,695,708
Rohtas Industries Ltd v. Brijnandan Pandey, (1956) 2 LLJ 444 (Patna}, 353
Rohtas Industries Ltd v. Its Workmen, (1968} 1 LLJ 710 (Patna}, 299,302
Rohtas Industries Ltd v. Rohtas Industries Staff Union, (1976) 1 LLJ 272 (SC}, 305,306
Rohtas Industries Ltd v. S D Agarwal, AIR 1969 SC 707,374,391
Rohtas Industries Staff Union v. State of Bihar, AIR 1963 Patna 170: AIR 1979 SC 425,123,234
Rohtas Industries v. Brijnandan Pandey, AIR 1957 SCI., 353
Rolstan Joh v. Central Government Industrial Tribunal-cum-Labour Court 1994 Lab. IC 1973, 497
Roman Nambisan v. Madras State Electric Board, (1967) 1 LLJ 252, 254 (Madras}, 672, 708
Royal Calcutta Gold Club Mazdoor Union v. State of West Bengal, AIR 1956 Calcutta 550,288
RS Madho Ram Sons (Agencies) Pvt. Ltd v. Its Workmen, (1964} 1 LLJ 366 (SC}, 536
RSRTC v Deen Dayal Sharma, (2010} 5 SCALE 1,177,679,706
RSRTC v. Dharamvir Singh (2003} (2) WLC 64 (Raj.}, 712
Rustaom and Hornsby (P) Ltd v. TB Kadam, (1975) 2 LLJ 352 at 355 (SC}, 200, 201, 292

s
SA Phenany v. J Walter Thompson Co., (Eastern) Ltd Bombay, 9 FIR 324 (LAT}, 249
S Ganapathi v. Air India AIR 1993 SC 2430, 645,650
S Jina Chandran v Registrar of Cooperative Societies, Madras, (1999) LLR 230,284
SK M Sangh v. General Manager, W C Ltd, (1998) 1 LLJ 150, 152, 305
SK Maini v. Mis Carona Sahu Company Ltd, (1994) (68} FLR 1101 (SC}, 254
SK Mukerjee v. Calcutta Electric supply Co. Ltd, (1969) 1 LLJ 603 (Calcutta}, 701
SK Seshadri v. HAL, (1983) 2 LLJ 410, 685
SK Varma v. Mahesh Chandra, (1983} SLR 799,249,257,314
S M Nilajkar & Others v. Telecom District Manger, Karnataka (2003} 4 SCC 27, 500
SM. Islan v. Suite of Bihar, AIR 1956 Patna 73, 349
S P Gupta v. Union of India AIR, 1982 SC 149, 43, 53
SR Bhagat v. State of Mysore, (1995) II CLR 797, 341
S S Light Railway Co. Ltd v. Shadhara Saharanpur Railway Workers Union, (1969} 1 LLJ 734, 740 (SC}, 686
S S Rly Co. v. Workers Union, AIR (1969} SC 513, 63, 665, 667
S T Employees Federation, Orissa v. State of Orissa, (1990} Lab. IC 1591(Orissa}, 452
S Vasudevan v. S D Mital, AIR 1962 Born. 53,437
S. Ganpathy v. Air India 1993 Lab. IC 1966, 642
Sadul Textile Mills v. Their Workmen, (1958) 2 LLJ 628 (Rajas than), 402,405
Sagdish Bharti v. Union of India, 1969 Lab. IC 205 (Allahabad}, 101
Salem Erode Electricity Distribution Co. (Pvt.) Ltd v. Employees Union, (1966) 1 LLJ 443 (SC}, 666
Sales Tax Officer v. Budh Prakash, (1955) 1 SCR 243,350
Salinla, (1989) Lab. IC NOC 130 (Orissa}, 229
Samalkot Tile Factory, (1951) 2 LLJ 509 (LAT}, 535
Sambhu Nath Goyal v. Bank of Baroda, (1978) 2 sec, 353, 180
Samishta Dube v. City Board Etawah (1999} 3 SSC 14: 1991(1) SCALE 655,207,532
Sandhu Resettlement Corporation Ltd v. Industrial Tribunal, AIR 1960 SC 529, 629
Sangam 1999 LLR 24,413
Sangram Singh Eastern Railways, AIR (1958) SC 525,529,352
Sanjeeva Reddi v. Registrar of Trade Unions, (1969} 1 LLJ 11, 6
 List of Cases • xliii

Sankari Cement Alai Thozhilalar Munnetra Sangam v. Government of Tamil Nadu (1983} 1 LLJ 460,391
Santosh Gupta v. State Bank of Patiala (1980} 2 LLJ 72: (1980} 3 sec 340: 1980 sec (L&S)409: (1980} 2
LLJ 72,493,495,496,505
Sarla Dixit (Smt.) v. Balwant Yadav AIR 1996 SC 1274; (1996) 3 sec 179,645
Saroj Kumar v. Chairman, Orissa State Electricity Board, AIR 1970 Orissa 126, 677
Saroj Rawat v. Secy. Bar Council, AIR 1954 All 745,350
Sarv UP Gramin Bank v. Manoj Kumar Sinha 2010 LLR 348, 571, 593
Sarva Shramik Sangh v. Indian Hume Pipe Co. Ltd, (1993} Lab, IC 870 (SC}, 329
Sasa Musa Sugar Mills (P) Ltd v. Shobati Khan, AIR 1959 SC 923, 563, 641
Satendra Singh Gujar v. Bank of India, 2011 LLR 62,
Sathe Biscuit Chocolate Company Ltd, (1958) 2 LLJ 70,486
Satnam Verma v. Union of India, (1985) Lab. IC 738,311
Savita Chemicals (Pvt.) Ltd v. Dyes and Chemical Workers Union (1999} 2 SCC 143,449
SBI v. Bela Bagchi (2005) 7 sec 435; 2005 sec (L&S} 940; AIR 2005 SC 3272, 616, 628
SBI v. N Sundara Money (1976) 1 sec 822: 1976 sec (L&S} 132: (1976) 3 SCR 160, 505, 507
SC Workers' Union v. Management ofAyurvedic A Unani Tibbia College Board, (1980) Lab. IC 892 (Del.}, 228
Secretary of Tamil Nadu Electricity Board Accounts Subordinate Union v. Tamil Nadu Electricity Board,
(1984) 2 LLJ, 478, 107
Secretary, Cheruvathur Beedi Workers' Industrial Co-operative Society v. Shyamala, 2003 LLR 813,325
Secretary, Indian Tea Association v. Ajit Kumar Barat, (2002} 4 SCC 490, 382
Secretary, Meters Staff Association v. Union Electrical Industries Ltd, (1984) 2 LLJ 446, 135
Secretary, State of Karnataka v. Umadevi, 2006 (109} FLR 826 (SC), 52, 53
Secretary, Tea Association v. Ajit Kumar Barat, (2000} 3 SCC 93,380
Security Paper Mills v. Hati Shankar Namdeo, (1980} 2 LLJ 61 (M.P.}, 228,229
Selam Erode Electricity Distribution Co. v. Their Employees Union, AIR 1966 SC 808.
SG Chemicals and Dyes Trading Employees' Union v. SG Chemicals and Dyes Trading Ltd, (1986) Lab. IC
863,556
Shahadara (Delhi) Saharanpur Light Rly. Co. v. SS Railway Workers, AIR 1960 SC 945, 185
Shahdara (Delhi) Saharanpur Light Rly. Co. Ltd v. Saharanpur Rly. Workers Union, (1969} 1 LLJ 741 (SC}, 689
Shalimar Works Ltd v. Its Workmen (1959) 2 LLJ 26 (SC}, 627
Shalimar Works Ltd v. Their Workmen, AIR (1959) SC 1217: (1959) 2 LLJ 26 (SC}, 627, 655
Shambhu Nath Goyal v. Bank of Baroda, Jullundur, (1978) 1 LLJ 484 (SC}, 373
Shambhu Nath v. Bank of Baroda, AIR 1984 SC 289,314
Shamnagar Jute Factory v. Their Workmen, (1950) LLJ 235 (IT}, 398,399
Shankar Balaji Waje v. State of Maharashta, 1962 1 LLJ 119 (SC}, 184, 244
Shankar Chakravarty v. Britannia Biscuit Co. Ltd, (1979) 3 SCR 1165, 313, 598, 643
Shankar Nath v. Bank of Baroda, AIR 1984 SC 289, 598
Shanker v. Returning Officer, AIR 1952 Bombay 277,350
Sharad Kumar v. Government ofNCT of Delhi, (2000} 3SCC 324,260,381
Shastri v. S D Patil, (1975) 1 LLJ 458 (Bombay), 321
Shaw Wallace & Co. v. Workmen, (1978) 1 LLJ 482 (SC}, 352
Shibu Metal Works v. Their Workmen, (1966) 1 LLJ 717 (SC}, 246
Shining Tailors v. Industrial Tribunal, AIR 1984 SC 268: 1983 Lab. IC 1509, 247,266
Shiromani Gurudwara Prabandhak Committee, Patiala v. Presiding Offi cer, Labour Court, Patiala (2004)
LLR 60,217
Shitla Prasad v. State of UP, (1986} Lab. IC 2025, 671, 672, 698
Shiv Durga Iron Works Ltd v. Its Workmen, 2 FLR 200,581
Shivaj Nathubai v. Union of India, AIR 1963 SC 606,349
xliv • List of Cases

Shops and Commercial Workers' Union v. Management of Ayurvedic and Unani Tibbia College Board,
Shree Meenakshi Mills v. Their Workers, (1951) 1 LLJ 579,401,407
Shree Shiv Sakti Oil Mills Ltd v. Second Industrial Tribunal, (1961) 2 LLJ 36 (Calcutta), 392
Shri Ambika Mills v. SB Bhat, AIR (1961) SC 970,350
Shri Kripa Printing Press v. Labour Court, (1960) 1 LLJ 53, 197
Shri Krishna v. Prescribed Authority, Kanpur (1995) Lab. IC 280,498
Shri Ram Chandra Spinning Mills Ltd v. State of Madras, (1957) 1 LLJ 90 (Madras), 419
Shri Ram Silk Mills v. Their Workmen, (1952) 2 LLJ 862 (IT), 461
Shri Ram Vilas Service Ltd v. Simpson and Group Companies Workers Union, (1979) 2 LLJ 284 (Madras),
122,124
Shri Rameshwar Dass v. State of Haryana 1987 Lab. IC 637,546
Shri Vijay Kumar v. Presiding Judge, Labour Court, (1983) 1 LLJ 30, 264
Shri Yovan, India Cements Employees Union v .. Management ofIndia Cements Limited, (1994) Lab.IC 38,396
Shukla Manseta Industries Pvt. Ltd v. The Workmen, (1977) 2 LLJ 339 (SC), 290
Shyamsunder v. Labour Court 1986 Lab. IC 767, 546
Sikh Educational Society v. Presiding Offi cer, Industrial-cum-Labour Court, UT, Chandigarh 2011 LLR
159,660
Simpson Group Companies Workers & Staff Union v. Amco Batteries Ltd, 1992 Lab. IC 414,410
Sindhu Hochief v. Pratap Dialdas, (1968) 2 LLJ 515 (Bombay), 299,302
Sindhu Resettlement Corporation Ltd v. LT., (1965) 2 LLJ 270 (Gujarat): (1968) LLJ 834, 180, 184, 373
Sindri Fertilizer and Chemical Ltd v. Labour Commissioner, AIR 1959 Pat. 36, 671
Singapore Airlines Ltd v. Mr Rodrigntin, (2004) ILLJ 197 (SC), 108
Singareni Collieries Co. v. Their Mining Sirdars (1967) 2 LLJ 472,422
Sirka Colliery v. South Karanpura Coal Mines Workers Union, (1951) 2 LJ 52 (LAT), 401
Sirsilk Ltd v. Government Andhra Pradesh, AIR 1964 SC 160,325,326
Sita Ram v. Moti Lal Nehru Farmers Training institute (2008) 5 SSC 75, 525
Sitabai Naruna Pujari v. M/s Auto Engineer, (1972) 1 LLJ 290 (Bombay), 333
Sita[ v. Central Government Industrial Tribunal-cum-Labour Court, Jabalpur, 1969 MPLJ 33; 1969 JLJ 68,311
SK Singh v. Central Bank of India 1997 (75) FLR 402,592
SM Nilakjar v. Telecom Distt. Manager (2003) 4 SCC 27, 631
Smith Stain Street and Co. v. Smith Stain Street Worker's Union, (1953) 1 LLJ 67 (LAT), 464
Smt. Dhanalakshmi v. Reserve Bank of India, (1999) Lab. IC 286 (Kamataka), 175,336
Smt.Anjilamma v. Labour Court, (1995) Lab. IC 2784 (AP), 198
Sonipat Central Cooperative Bank Ltd v. Presiding Offi cer, Industrial Tribunal-cum-Labour Court, 2012
LLR26,267
South Arcot Electricity Distribution Co. Ltd v. Elumalai, (1959) 1 LLJ 624 (Madras), 332
South India Bank Ltd v. AR Chako, (1964) 1 LLJ 19 (SC), 290,330
South India Corporation v. All Kerala Cashewnut Factory Workers' Federation, (1960) 2 LLJ 103 (Kerala),482
Spencer & Co. Ltd v. Their Workmen, (1956) 1 LLJ 714 (LAT), 465
Sreekumar v. State of Kerala (1996) LLR 327,426
Sri Dattaram Shankar v. Indian Smelting and Refining Company Ltd, (1953) 2LLJ 577,486
Sri Ganpathi Mills Co. Ltd v. Presiding Offi cer, Labour Court 2003 LLR 88, 700
Sri Krishna Jute Mills v. Government of Andhra Pradesh, (1977) 2 LLJ 363 (Andhra), 375
Sri Ram Vilas Service Ltd v. State of Madras (1956) 1 LLJ, 198, 197
Sri Varadaraja Textiles (Pvt) Ltd v. Presiding Officer, Labour Court, Coimbatore (1999) LLR 45 (Mad.), 347
Srivastava (S P) v. Banaras Electric Light & Power Co. Ltd, (1968) 2 LLJ 483,679
SS Rly. Co. v. Workers Union, AIR 1969 SC 513,695,697
Stain Steel Products v Naipal Singh (1970) 1 SCC 822,507
 List of Cases • xiv

Standard Chartered Bank v. Chartered Bank Employees' Union (1996} LLR, 425,426
Standard Mills Ltd v. Their Workmen, (1953) 2 LLJ 135 (IT}, 460,468
Standard Vacuum Oil Co. v. Gunaseelan (MG), (1954) 2 LLJ 656,399
Standard Vacuum Oil Co. v. Labour Commissioner, AIR 1960 Madras 288 at 291,254
Standard Vacuum Refining Co. of India Ltd v. Their Workmen, AIR 1960 SC 948, 185, 188,190,245
Standard Vacuum v. Gunaseelan Oil Co., (1954) 2 LLJ 656,399
State Bank of Bikaner and Jaipur v. Ajay Kumar Gulati 1996 (5) SCALE 226; 1996 JT 447,590
State Bank of Bikaner and Jaipur v. Nemi Chand Nalwaya 2011 LLR 634 (SC}, 561
State Bank of Bikaner v. Balai Chander Sen, AIR 1964 SC 732,651
State Bank of Bikaner v. R L Khandelwal, (1968) 1 LLJ 589,334
State Bank Staff Union v. State Bank of India, 1991 Lab. IC 197,114
State Bank of India v. Ganesan (1989} 1 LLJ 109,470
State Bank of India v. N Sundara Money AIR 1976 SC 1111, 492,493,494,495
State Bank of India v. RB Sharma 2004 LLR 950, 586
State Bank of India v. Ram Chandra Debey, 2000 (87) FLR 849 (S}: 2001 (1) SCC 73, 336
State Bank of India v. Workmen of State Bank of India (1990} Lab. IC 1750 (SC}, 499
State Bank of Patiala v. SK Sharma 1997 LLR 268 (SC}, 592
State Express Transport Corporation Ltd v. Arasu Vuralvua Pokkuvarthu Oozhlyar Sangam, 2011 LLR 278
(HC Madras), 647
State of AP v. Radhakishan AIR 1998 SC 1833; (1998} 4 sec 154, 573
State of Bihar v. D N Ganguli, (1958) 2 LLJ 634: AIR 1958 SC 1018, 311,340,383
State of Bihar v. Deodhar ]ha, AIR 1958 Pat. 51,440
State of Bihar v. Gajadhar Singh, (2012) 1 LLJ 75, 235
State of Bihar v. Kripa Shankar Jaiswal, AIR 1961 SC 340,196,279,281
State of Bombay v. Hospital Mazdoor Sabha AIR 1960 SC 610, Bombay Union: (1960} 1 LLJ 250 (SC}: (1960)
1 LLJ 251 (SC},, 205, 208,217,443, 505, 518
State of Bombay v. K P Krishna, (1960) 2 LLJ 592,375,376,390
State of Bombay v. United Motors, (1953) SCJ 373, 38
State of Gujarat v. Continental Textile Mills, (1998} 1 LLJ 30, 556
State of Gujarat v. Pratamsingh Narsingh Parmar, (2001} 8 SSC 713,237
State of HP v. Suresh Kumar Varma, JT 1996 (2) 455,234
State of Haryana v. Piara Singh (1992} 2 LLN 1037, 515
State of Haryana v. Rattan Singh, AIR 1977 SC 1512, 600
State of]ammu and Kashmir v. Ganga Singh, AIR 1951 SC 356,350
State of Karnataka v. Ganapathi Chaya Nayak, (2010} 3 SCC 115, 53
State of Kerala v. Chako, (1961} 2 LLJ 569 (Kerala}, 458
State of Kerala v. V M Patel, (1961} 1 LLJ 744 (SC}, 244
State of Madras v. C P Sarathy, (1953) 1 LLJ 174 (SC}, 334,349,362,375
State of Madras v. KN Padmannabha Iyer, (1958) 2 MLJ 266,362
State of Madras v. Swadeshmitran, AIR (1958) Cal. 227,350
State of MP v. Lalit Kumar Verma (2007) 1 SCC 2007, 524
State of Punjab v. Gondhara Transport Co., AIR 1975 SC 531,196
State of Punjab v. Jagir Singh (2004) 8 sec 1209, 608
State of Punjab v. Kidar Nath, (1999) 1 LLJ 234,219
State of Punjab v. Kuldip Singh, (1983} 1 LLJ 309 (Punj. & Haryana}, 228
State of Punjab v. Labour Court (1980} Lab. IC 1084 (SC}, 335
State of Rajasthan v. Babu Khan, (1994) Lab. IC 181 (Rajasthan}, 268
State of Rajasthan v. Ganeshi Lal, (2008} 2 sec 533,238
xlvi • List of Cases

State of Rajasthan v. Industrial Tribunal, Rajasthan, (1970) (Raj.} LW 137 (Raj.}, 229
State of Rajasthan v. Nathumal, (1954) SCA 347,350
State of Rajasthan v. Panna Ram, (1999} Lab. IC 490 (Raj.}, 342
State of Rajasthan v. Rameshwar Lal Gahlote (1996) I SCC 595: AIR 1996 SC 1001, 499
State of UP v. Presiding Officer, Labour Court, (1997) LLR 558 (H.C. Alld.}, 230,233
State of UP. v. Jai Bir Singh, (2005) 5 SSC 1,240
State of UP v. Mohd. Nooh, AIR 1958 C 86,349
State of UP v. Raj Pal Singh 2010 (4) SCALE 485,623
State of UP v. Saroj Kumar Sinha, AIR 2010 SC 313; Chairman-cum-MD, Coal India v. Ananta Saha, 2011
State of Uttar Pradesh v. Industrial Tribunal IV, Agra & Another, (2002} LLR 609,234
State of Uttar Pradesh v. Jai Pal Singh & Another, (2002} LLR 444, 237
State of Uttar Pradesh v. Kaushal Kishore Shukla 1991 (1) JT 109,533
State of Uttaranchal v. Kharak Singh, 2008 LLR 170 (SC}, 577
State of West Bengal v. Sobodh Gopal, AIR 1964 SC 587, 38
Statesman Ltd v. Their Workmen (1976) 1 LLJ 484 (SC}, 351,466,467,470
Steel Authority of India Ltd & Ors. v. National Union Waterfront Workers, JT (2001} (7) SC 268: 2001 LLR
961 (SC}, 247,266,369,381
Straw Board Manufacturing Co. Ltd v. Govind, (1962} 1 LLJ 423 (SC}, 649,650,645
Straw Board Manufacturing Co. Ltd v. State of Uttar Pradesh, (1953) 1 LLJ 186 (SC}, 362, 651
Subhash v. Divisional Controller, Maharashtra SRTC (2009} 9 SCC 344, 620
Sudhansa Kanta v. State of Bihar, AIR 1954 Pat. 299,389
Sudhir Chandra Sarkar v. Tata Iron and Steel Company, (1984) 2 LLJ 223 (SC}, 667,679,693
Sudhir Vishnu Panvalkar v. Bank of India, (1997) 6 sec 271; 1997 sec (L&S} 1662; AIR 1997 SC 2249, 628
Sukumar Bandyopadhyay v. State of West Bengal, (1976) Lab. IC 1980, 470
Sultan Singh v. State of Haryana, 19961 LLJ 879,380
Sumer Chand v. The Presiding Off cer, Labour Court, Ambata, (1990) (1) SLJ 91, 229
Sun Rolling Mills v. Their Workmen, (1949) LLJ 696 (IT), 415,456
Sunil Batra v. Delhi Administration, (1978) 4 SCC 494, 43
Sunil K R Ghosh v. K Ramachandran (2012} 1 LLJ 625 (SC}, 540
Suraj Prakash Bhandari v. Union of India, (1986} Lab lC 671 (SC}, 530
Surender, Kumar Verma v. Central Government Industrial, AIR 1981 SC 422,496
Surendra Kumar Sharma v. Vikas Adhikari 2003 LLR 625 (SC}, 500
Surendra Kumar v. Union of India, 1986 Lab. IC 1516 (Alld.}, 262
Surendra Kumar Verma v. Central Govt. Industrial Tribunal-cum-Labour Court (1980) 4 SCC 443: 1981
sec (L&S) 16, AIR 1981 SC 422, 505
Suresh Kumar v. Union of India, (1990) Lab. IC NOC 75 (Delhi}, 230
Suresh Pathrella v. Oriental Bank of Commerce AIR 2007 SC 199: (2007} 1 LLJ 728,588
Sureshwar Narain Srivastava v. Government of Bihar, (1971) 2 LLJ 152 (Patna), 376
Surindra Kumar v. Industrial Tribunal, (1981) 1 LLJ 386,495
Surindra Kumar Varma v. Central Government Industrial Tribunal AIR 1981 SC 422,495
Survapal v. Uttar Pradesh Government, AIR 1951 Allahabad 674-698, 94
Sushil Kumar Singhal v. The Regional Manager, Punjab National Bank 2010 LLJ 1025, 617
Swadeshi Cotton Mills Co. v. Ramzani, (1953) 1 LLJ 277 (LAT}, 191
Swadeshilndustries Ltdv. Its Workmen, (1960) 2 LLJ 78 (SC}: (1955) 2 LLJ 785 (LAT},442,459,464,575,626
Swadeshmitran & Co. Ltd v. Their Workmen, (1952) 1 LLJ 479 (IT), 465, 531
Swami Oil Mills v. Their Workers, (1953) 2 LCJ 785 (IT), 405,459,460,464
Swami Singh v. State of Rajasthan, (1986} 3 sec 454, 573
Swastic Textile Engineerings P. Ltd v. Rajan Singh Sant Singh (1984) 2 LLJ 97,471
 List of Cases • xlvii

Swatantra Bharat Mills v. Ratan Lal, AIR (1961) SC 1156, 640

Syndicate Bank Ltd v. K R V Bhat, (1967) 2 LLJ 745 (SC), 651
Syndicate Bank v. General Secretary, Syndicate Bank StaffAssociation, (2000) 5 SCC 64, 51,347,611,689,667
Syndicate Bank v. Umesh Nayak (1994) (5) JT 648,469

T
TC Basappa v. T Nagappa, AIR 1954 SC 440,349
T K Menon v. District Labour Officer, (1966) 2 LLJ 613 (Kerala), 213
T K Padamanabha Menon v. P V Kora, (1968) Lab. IC, 1134, 181
T K Rangrajan v. Government of Tamil Nadu 2003 (6) SCALE 84,413,429
T P Srivastava v. M/s National Tabacco Co. of India, (1991) Lab. IC 2371 (SC), 259
T Stratford & Sons Ltd, v. Lindley [1965] AC. 269, 122
TT Devasthanam v. Commr. of Labour, (1979) 1 LLJ 448, 79, 80,228
TVS Iyengar and Sons (P) Ltd v. State of Madras, (1970) Lab. IC 203 (Madras), 201
Taff Value Co. v. Amalgamated Society of Railway Servants [1901] AC. 406, 121
Taj Service Ltd. v. Delhi Administration, (1990) LLR 25,314
Takla Experiment Station v. Its Workmen, (1961) 2 LLJ 697,353
Talchar Coalfields Ltd v. Talchar Coalfields Workers Union, (1953) 2 LLJ 21 (LAT), 418
Tamil Nadu Electricity Board Accounts Executive Staff Union v. Tamil Nadu Electricity Board, Madras,
(1980) 2 LLJ 246, 132
Tamil Nadu Electricity Workers Federation v. Madras Electricity Board, AIR 1965 Mad. 111, 147
Tamil Nadu Government Press Workers Sangam v. First Trade Union Add[. Registrar (Deputy Commissioner
of Labour I), (2004) 1 LLJ 274, 96
Tamil Nadu National Engineering Employees Union v: TI Cycles of India Ltd, (1994) Lab. IC NOC 21, 185
Tamil Nadu Non-gazetted Government Officers Union, Madras v. Registrar of Trade Unions, Madras, AIR,
(1959) Madras 55, 97
Tamil Nadu Transport v. Mariappan, (1970) 1 LLJ 90 at 92 (Mad.), 531
Tamil Nadu Union v. Registrar of Trade Unions, AIR 1962 Mad. 234, 92
Tapan Kumar Jana v. Central Manager, Calcutta Telephones, (1981) Lab IC (NOC) 68 (Calcutta), 229
Tapan Kumar v. General Manager Calcutta Telephones, (1980) Lab. IC 508 (Cal.), 227
Tata Chemical Ltd v. Workmen, (1978) 2 LLJ 22 (SC), 288, 294
Tata Chemicals Ltd v. Kailash C Adhvaryar, (1965) 1 LLJ 54 (Gujarat), 677, 691, 699
Tata Consultating Engineers v. Workmen, (1981) 2 LLJ 146,156,312
Tata Electric Companies Officer Guild v. Registrar of Trade Unions, (1993) Lab. IC 1849, 96
Tata Engineering and Locomotive Co. Ltd v. SC Prasad, (1969) 2 LLJ 799,568,569
Tata Iron & Steel Co. Ltd v. Modak (SN), (1965) 2 LLJ 128 (SC), 637,649,650
Tata Iron and Steel Co. Ltd v. SN Modak AIR 1966 SC 380, 642, 645
Tata Iron and Steel Co. v. Singh, (1965) 2 LIJ 122 (SC), 638
Tata Memorial Hospital Workers Union v. Tata Memorial Centre, 2010 (8) SCALE 78,367
Tata Oil Mills Co. Ltd v. Its Workmen, (1964) 2 SCR 125, 565
TCC Thozhilali Union v. TCC Ltd, (1982) 1 LLJ 425, 135, 138
Tea Board v. First Industrial Tribunal, West Bengal, (1978) Lab. IC (NOC) 179 (Calcutta), 229
Telco Convoy Drivers Mazdoor Sangh and Another v. State of Bihar, AIR 1989 SC 1565, 380
Telugunadu Work Charged Employees v. Government of India (1997) LLR 1067 (AP), 340
Textile Employee Association v. Arbitrator, (1968) 1 LLJ 349 (Madras), 350
Thakur Singh v. State of Punjab (2003) 9 sec 208, 645
Thakur Yuga[ Kishor Sinha v. The State of Bihar, (1950) 1 LLJ 539,322
The Bombay Pinjrapole Bhuleswar v. The Workmen, AIR (1971) SC 2422, 229
xlviii • List of Cases

The Hindu v. Secretary, Hindu Office, AIR 1961 Madras 107, 676
The Indian Link Chain Manufactures Ltd v. Their Workmen, (1972} Lab. IC 200, 291
Thiruvirkolam v. Presiding Officer, (1997} 1 sec 9,314
Thulasingaraj v. CPF Commissioner, AIR 1987 SC 194, 581
Tika Ram and Sons Ltd. Oil Mill v. Its Workmen,. (1956) 1 LLJ 327, 626
Tike Ramji v. State of U.P., AIR (1956) SC 676, 41
Tirlok Nath v. All India Postal Workers Union, AIR 1957 All. 234, 87
Tirumala Tirupati Devasthanam v. Commissioner of Labour, (1995) Supp (3) SCC 653, 85
Titaghur Paper Mills Co. Ltd v. First Industrial Tribunal, (1982} 2 LLJ 288, 252
TNEB Engineers Sangam v. Tamil Nadu Electricity Board, (1996} LLR 942 (Mad}, 108
Tobacco Manufacturing (India) Ltd, (1953) 1 LLJ 259 (LAT}, 328
Torquay Hotel Co. Ltd v. Cousins & Others [1969] 2 Ch. 106, 122
Toshniwal Brothers (Pvt.) Ltd v. Labour Court, (1969} FJR 19 352,201
Trambak Rubber Industries Ltd v. Nasik Workers' Union, (2003) 6 SCC 416, 264
Travancore Devaswom Board v. State of Kerala, (1963} 2 LLJ 218 (Kerala}, 217, 228
Triveni Engineering & Indust. v. Jaswant Singh 2010 (8) SCALE 113, 703
Tulsidas Paul v. Second Labour Court, AIR 1963 Calcutta 624, 127

u
UP Electric Supply Co. Ltd v. Their Workers, (1972) 2 SCC 54, 665
UP Electricity Supply Co. v. Chatterjee, AIR 1972 SC 1201, 676, 677
UPS E Board, Lucknow v. State of UP, (1992) Lab. IC 153 (All.), 389
UP State Bridge Corpn. v. UP Rajya Setu Nigam S Karamchyari Sangh (2004) 4 SCC 268, 704
UP State Bridge Corporaion Ltd v. UP Rajya Setu Nigam S Karmchari Sangh (2004) 4 SCC 268, 679
UP State Electricity Board v. Hari Shankar Jain, (1978) 4 SCC 16, 665, 671, 672
UP State Road Transport Corporation v. Basudeo Chaudhary, (1997} 11 SCC 370,600
UP State Road Transport Corporation v. Birendra Bhandari, 2006 LLR 1219 (SC), 336
UP State Road Transport Corporation v. Subhash Chandra Sharma and Others, (2000} (3) SCC 324), 600
UP State Road Transport Corporation v. UP Rajya Parivahan Karmchari Union 2007 (4) SCALE 302,703
UP. State Electricity Board v. Rajesh Kumar, (2005) 1 LLJ 1081, 387
UP. Sugar and Cane Development Corpn. Ltd v. Chini Mill Mazdoor Sangt, (2008} 9 SCC 544, 372
UCO Bank v. Rajinder Lal Capoor, (2007) 6 SCC 694, 572
Udumbanchola Estate Workers Union v. Indian Cardamom Research Institute, 1998 LLR 259,652
Ujjain Mill Mazdoor Sangh v. State of M.P. 1999 LLR 49,550
Umesh Kumar Singh v. State of Bihar, (1998} 6 SCC 538, 52
Union Bank of India v. Gyan Chand Chattar, (2009) 12 SCC 78,573
Union Carbide (India) Ltd v. D Samuel and others, (1999} LLR 21 (Born.}, 251
Union of India and Another v. Kartick Chandra Mondal, Satya Prakash and Others v. State of Bihar, 2010
(125) FLR 517 (SC}, 53
Union of India v. H C Sarin, AIR 1976 SC 1686, 580
Union of India v. Jai Narain Singh, (1995) Supp 4672, 234
Union of India v. Jummasha Diwan (2006} 8 sec 544, 511
Union of India v. MTS S D Workers Union, AIR 1988 SC 633, 272
Union of India v. Mohd. Ramzan Khan 1991 Lab IC 308 (SC}, 591
Union of India v. Naman Singh Shekhawat (2008) 4 sec 1: (2008} 1 sec (L&S} 1084, 589
Union of India v. Prakash Chandra Tandon, 2009 (121) FLR 556 (SC}, 573,579,580
Union of India v. S K Agarwal, (2005) 1 SLR 151, 573
Union of India v. Shree Gajanan Maharaj Sansthan, (2002} LLR 711, 233
 List of Cases • xlix

Union of India v. Stumpp Schedule and Somappa Ltd (1989) 2 LLJ 4, 553
Union of India v. Vartak Labour Union, 2011 (129) FLR 500 (SC), 53
Union of Workmen v. R SN Co., AIR 1951 Assam. 96; (1956) 1 LLJ 49,316
Union Tile Works v. Their Employees, (1954) 2 LLJ 103 (IT), 460
United Collieries Ltd v. Its Workmen, (1961) 2 LLJ 75 (SC), 329
United Commercial Bank Ltd v. Commissioner of Labour, (1951) 1 LIJ 1 (SC), 191
United Commercial Bank Ltd v. Kedar Nath Gupta, (1952) 1 LLJ 782, 186
United Commercial Bank Ltd v. Their Workmen, (1951) 1 LLJ 621,316,323
United Plantation Association of Southern India v. KG Sangameshariya, (1997) 4 SCC 741,313, 597
University of Delhi v. Ram Nath, AIR 1963 SC 1873, 213
UP Electric Co. v. Workmen, (1972) 2 SCC 54, 692
UP Electric Supply Co. Ltd v. T N Chatterjee, (1972) 2 LLJ 9,684
UP SRTC v. Hoti Lal (2003) 3 sec 605, 602
UP State Brassware Corpn Ltd v. Uday Narain Pandey (2006) 1 SCC 479,524,528,631
UP State Electricity Board v. Hari Shankar, (1978) 4 SCC 16, 683
UP State Road Transport Corporation v. Nanhe Lal Kushwaha 2010 LLR 230,602
UP State Road Transport Corporation v. Subhash Chandra Sharma 1995 (6) SCC 749,613
UP State Road Transport Corporation v. Vinod Kumar (2008) 1 SCC 115, 601
Upper India Couper Paper Mills v. Their Workmen, (1954) 2 LLJ 347 (LAT), 407
UPSRTC v. Suresh Chand Sharma 2010 (6) SCALE 87, 602
Uptron India Ltd v. Shammi Bhan 1998 LLR 383 (SC), 502, 666
Uptron India Ltd v. Workers Union; AIR (1969) SC 513, 666
Uptron India Ltd. v. Shammi Bhan, AIR 1991 SC 101, (2000) LLR (SC) 849, 50, 51
Usha Breco Mazdoor Sangh v. Mis Usha Breco Ltd, 2008 LLR 619, 108,124,580
Utkal Asbestos Ltd v. T S Rao (1992) 2 LLN 752,508
Uttar Pradesh Shramik Sangh v. State of Uttar Pradesh, AIR 1960 All. 45,423
Uttaranchal Forest Development Corporation v. KB Singh, (2001) 5 SCC 169,346
Uttaranchal Forest Development Corporation v. MC Joshi (2007) 9 SCC 353, 524
Uttranchal Forest Hospital Trust v. Dinesh Kumar, (2008) 1 SCC 542, 260

V
VA Chedda v. Bambai Mazdoor Union, (1973) Lab. IC 697 (Bombay), 288
V Ganesan v. State of India285 (1981) 1 LLJ 64,470
V K Sharma v. Govt. of NCT, 2008 LLR 521,257
V KVerma v. Hindustan Machine Tools Ltd, (1999) LLR 370 (P & H), 650
V Ramachandran v. Indian Bank (1979) 1 LLJ 122,470
V S Karnath v. State of Karnataka, 1988 (2) SLJ 241, 573
V Veerarajan v. Government of Tamil Nadu, AIR 1987 SC 494,391
Valsad Jilla Sahkor Bank Ltd v. DK Patil, 1991 Lab. IC 655,671
Varada Rao v. State of Karnataka, (1986)11 CLR 277 (SC), 108
Varadraja Motor Services v. Its Workmen, (1953) 1 LLJ 226,629
Vasudeo Ambre v. State of Maharashtra, (1988) Lab. IC 554 (Bombay), 228
Ved Prakash Gupta v. Mis Delton Cable India Ltd 1982 Lab IC 1790(SC), 613
Veerappa v. Raman, AIR (1952) SC 192,350
Veerarajan v. Government of Tamil Nadu, AIR 1987 SC 695,377
Veerarnani v. Madurai District Cooperative Supply and Marketing Society Ltd., (1983) 2 LLJ 88 (Madras), 265
Vegoils Pvt. Ltd v. Workmen, (1972) 2 LLJ 567 (SC), 246
Vellanikara and Thuttil Rubber Estate v. Its Employees (1959), 113,459,467
l • List of Cases

Venkatramana v. State of Mysore, AIR 1965 SC 255 at 262,352

Vermula Thimmappa v. Addl. Distt. Magistrate, AIR 1955 NUC Andhra Pradesh 4458, 389
Viakuntam Estate v. Arbitrator, (1968) 1 LLJ 79 (Madras), 303
Vijaya Bank v. Shyamal Kumar Lodh 2010 (6) SCALE 300,337, 711
Vimal Kishore Malhotra v. State of Uttar Pradesh, AIR 1956 Alld. 56,409
Vimal Kumar Jain v. Labour Court, Knapur, AIR (1988) SC 384, 268
Virendra Bhandari v. Rajasthan State Road Corporation (2002) 9 SCC 104,382
Viriji Bhai Laxman Bhai v. New Commercial Mfg. Co., (1958) ICR Bombay, 1153, 461,468
Virudhachalam P v. Mgmt of Lotus Mills, (1998) 1 LLJ 389 (SC): AIR 1998 SC 554,292
Visalakshmi Mills Ltd v. Labour Court, (1962) 2 LLJ 93, 197
Vishaka v. Union of India, 1997 LLR 991 (SC), 45
Vishakapatnam Dock Labour Board v. Stevedores' Association, Vishakapatnam, (1970) 1 LLJ 46 (SC), 229
Vishveswaraya Iron and Steel Ltd v. M Chandrappa, (1994 (84) FJR 46) (Kant), 344
Vishwamitra Press, 1954 2 LLJ 53 (Adi), 629
Viveka Nand Sethi v. Chairman J & K Bank Ltd, 2005 LLR 641,348
Viveka Nanda Sethi v. Chairman, J&K Bank, 2005 LLR 641 (SC), 611

w
Warayam Singh v. Amar Nath, AIR 1954 SC 21,351
Warning Coop. Agriculture Services Society Ltd v. State of Punjab and Others, (1987) Lab & IC 359 (P&H),
342 UPSRTC Kanpur v. State of UP. & Ors.(1996) (1) LLJ 31,342
Wenger & Co. Ltd v. Their Workmen, (1963) 2 LLJ 403 (SC), 329,330
West Bengal State Electricity Board v. Desh Bandhu Ghosh, (1985) 3 SCC 116, 48
Western India Automobile Association Ltd v. Industrial Tribunal, (1949) LLJ 245 (FC), 78, 183, 269
Western India Match Co. Ltd v. Western India Match Co. Workers Union, (1970) 2 LLJ 256 (SC), 384,385
Western India Match Co. v. Western India Match Co. Workers Union, AIR 1970 SC 1205: AIR 1973 SC
2650,198,257,384,679,687
William Fredric De Pennmg v. Therd Industrial Tribunal, AIR 1959 Cal 749,230
Workers of Industry Colliery v. Industry Colliery, (1953) 1 LLJ 190, 194 (SC), 327
Working Journalists of the Hindu v. The Hindu (1961) 1 LLJ 288 (SC), 119,421
Workman of Oswal Weaving Factory v. State of Punjab, (1967) 1 LLJ 557 (Punjab), 375
Workman v. Dharam Pal Prem Chand, (1965) 1 LLJ 668 (SC), 119
Workmen Employed under IT Shramik Sena v. M/S Raptakos Brett & Co. Ltd, 2008 LLR 520 (SC), 344,346
Workmen of American Express International Banking Corporation v. Management of the American Express
International Banking Corporation 1986 Lab. IC 98,511
Workmen of Balmadies Estate v. Management, Balmadies Estate 2008 LLR 231, 585
Workmen of Buckingham & Carnatic Mills v. State of Tamil Nadu, (1982) 2 LLJ 90,283,578
Workmen of Dahingeapur Tea Estate, AIR 1958 SC 1026, 188
Workmen of Dalmia Cement (Bharat) Ltd v. State of Madras, (1969) 1 LLJ 499 (Madras), 376
Workmen of Dewan Tea Estate v. Their Management, AIR 1964 SC 1458, 476, 678
Workmen of Dharampal Prem Chand v. M/s Dharampal Prem Chand, AIR 1966 SC 182, 193, 196
Workmen of Dikmakuchi Tea Estate v. Management of Dimakuchi Tea Estate, (1959) 1 LLJ 500 (SC), 180,
189,190
Workmen of Dimakuchi Tea Estate v. Dimakuchi Tea Estate (1958) 1 LLJ 500 (SC), 263,421
Workmen of Edward Keventers (P) Ltd v. Delhi Administration, ILR (1969) Delhi 767,453
Workmen of Firestone Tyre and Rubber Co. v. Management (1973) 3 SCR 587, 648
Workmen of Firestone Tyre and Rubber Company of India (P) Ltd. v. Firestone Tyre and Rubber Company of
India (P) Ltd, (1973) 1 LLJ 278; AIR 1973 SC 1273, 596
 List of Cases • Ii

Workmen of Hindustan Lever Ltd v. Hindustan Lever Ltd, (1984) 4 SCC 392 (SC}, 181
Workmen of Hindustan Lever Ltd v. Hindustan Lever Ltd, (1999} 1 LLJ 449,263,347
Workmen of Indian Express Ltd v. Management of Indian Express Ltd, (1970) 2 LLJ 132 (SC}: (1984) 4 SCC
392(SC},181,194,196
Workmen of Industry Colliery v. Industry Colliery, (1953) 1 LLJ 190 (SC}, 286
Workmen of J and P Coats (India) Pvt. Ltd v. State of Kerala, (1977} 2, LLJ 534 (Kerala}, 375
Workmen of Mis Baikuntha Nath Debasthan Trust v. State of West Bengal, (1990} 2 Lab. IC 1586, 229
Workmen of Mis Williamson Magar and Co. Ltd, v. Mis Williamson, Magar and Co., Ltd, (1982} 1 LLJ 33,
(SC}, 164
Workmen of Macforline and Co. v. Fifth IT, (1964) 2 LLJ 556 (Calcutta}, 253
Workmen of Meenakshi Mills Ltd v. Meenakshi Mills (1992} 2 LLJ 295, 519
Workmen of Motipur Sugar Factory Private Ltd v. Motipur Sugar Private Ltd, (1965) 2 LLJ 162,169,561
Workmen of New Eqerton Woollen Mills v. State of Punjab, (1967} 2 LLJ 686 (Haryana and Punjab}, 392
Workmen of Rohtak General Transport Co. v. Rohtak General Transport Co., (1962} 1 LLJ 654 (SC}, 119
Workmen of Sri Ranga Vilas Motors (P) Ltd v. Sri Ranga Vilas Motor (P) Ltd (1970) 2 LLJ 177,365
Workmen of Straw Board Manufacturing Co. Ltd v. Mis Straw Board Manufacturing Co. Ltd, AIR (1974)
SC 1132,542
Workmen of Subong Tea Estate v. Management of Subong Tea Estate, (1964} 1 LLJ 333 (SC}, 516, 523, 537
Workmen of Sudder Office v. Management, (1971} 2 LLJ 620 (SC}, 568,569,570
Workmen of Sudder Workshop of Jorhaut Tea Co. v. Management, (1980} Lab. lC 742 (SC}, 529
Workmen of Sur Iron & Steel Co. v. Sur Iron & Steel Co., (1971) 1 LLJ 570 (SC}, 658
Workmen of Syndicate Bank v. Government of India (1985) 1 LLJ 93 at 94 (SC}, 377
Workmen of the Food Corporation of India v. Mis Food Corporation of India, (1965) 2 LLJ 4 (SC}, 243
Workmen of Williamson Magar & Co. Ltd v. Williamson Magar & Co. Ltd, (1982} 1 LLJ 33 (SC}, 312
Workmen v. Balmadies Estates (2008} 1 SCC 115
Workmen v. Firestone Tyre and Rubber Co. (1976) I LJ 493 (SC}, 474,477
Workmen v. Greaves Cotton Ltd, (1971) 2 LLJ 479 (SC}, 190
Workmen v. Mis Dharampal Prem Chand, AIR 1966 SC 182,196
Workmen v. Management of Indian Standard Institution, (1976) 1 LLJ 33 (SC}, 216
Workmen v. Rohtak General Transport Company, 19621 LLJ 634 (SC}, 196

X
X RB Kaimal v. Director of Postal Services op. cit. Bhaskaran v. SDO, (1982} 2 LLJ 248 (SC}, 227

V
Yad Ram v. B N Singh, (1974) 2 LLJ 306 (Delhi}, 333
Yadeshwar Kumar v. MS Bennet Coleman, 2007 LLC 1138, 257
Yasin v. Town Area Committee, (1952) SCR 572,348

z
Zaverbhai v. State of Bombay, AIR 1954 SC 752, 41
 PARTI

INDUSTRIAL RELATIONS AND LABOUR LAWS

Introduction to
Labour Law
1
Over the years, labour laws have undergone change with regard to their object and scope.
Early labour legislations were enacted to safeguard the interest of employers. They were
governed by the doctrine of laissez faire. Modern labour legislation, on the other hand, aims
to protect workers against exploitation by employers. The advent of doctrine of welfare state
is based on the notion of progressive social philosophy which has rendered the old doctrine
of laissez faire obsolete. The theory of 'hire and fire' as well as the theory of 'supply and
demand' which found free scope under the old doctrine of laissez faire no longer hold good.

Labour law seeks to regulate the relations between an employer or a class of employers
and their employees. The reach of this law is so wide that it touches the lives of far more
people. Indeed, it covers millions of working men and women as compared to any other
branch of law. It is this aspect which makes it most fascinating of all branches of law and,
therefore, the study of this subject is of enormous dimension and of ever changing facets.
There has been a remarkable change in the approach to labour law and industrial
relations since World War II. Philadelphia Charter adopted in 1944 provided that 'labour
is not a commodity' and that 'poverty anywhere is a danger to prosperity everywhere'.
W Friedmann and others who have tried to analyse the essential characteristics of legal
development in this branch of law consider it to be a 'social duty' on the part of employer
as the main bedrock on which this law is built. This is exemplified by the very approach
of law makers to the construction of a wage packet of the working men and women, wage
fixation and condition of service. The Indian Constitution lays down broad guidelines to
be followed by the state.
The Supreme Court in D N Banerji v. PR Mukherjee 1, stated that the law as developed
after the Second World War, particularly in a welfare state, has reversed the theories of
Sir Henry Maine and now society progresses form contract to status and has witnessed
considerable legislation laying down conditions of service and also ensuring payment of
minimum wages by laws.

1 AIR 1953 SC 58.

4 • Industrial Relations and Labour Laws

Otto Kahn-Freund in his book Labour and the Law makes the following propositions:
(z) The system of collective bargaining rests on a balance of the collective forces of
management and organized labour. The contribution which the courts have made to
the orderly development of collective labour relations has been infinistesimal.
(ii) Collective bargaining is a process by which the terms of employment and conditions
of service are determined by agreement between management and the union. In effect,
'It is a business deal (which) determines the price of labour services and terms and
conditions of labour's employment.'
(iii) The law governing labour relations is one of the central branches of law according to
which a very large majority of people earn their living. Nonetheless, law is a secondary
force in human relations, especially in labour relations.
(iv) Law is a technique for regulation of social power. This is as true of labour law as it is
for other aspects of any legal system. Labour law also seeks to lay down minimum
standard of employment. It lays down norms by which basic conditions of labour are
fulfilled such as maximum working hours, minimum safety conditions, minimum
provisions for holidays and leave, protection for women and children from arduous
labour, prohibition of children below certain age from employment, provisions for
minimum standards of separation benefits and certain provision for old age.

The development of industrial law during the last decade and several decisions of the
Supreme Court while dealing with industrial relations have emphasized the relevance,
validity and significance of the doctrine of social justice. The concept of social justice is not
narrow or one-sided or pedantic. Its sweep is comprehensive. It is founded on the basic ideal
of socio-economic equality and its aim is to assist the removal of socio-economic disparities.
Nevertheless, in dealing with industrial relations, it does not adopt a doctrinaire approach
and refuses to yield blindly to abstract notions, but adopts a realistic and pragmatic approach.
It therefore, endeavours to resolve the competing claims of employees by finding a solution
which is just, fair and reasonable to both parties with the object of establishing harmonious
relations between labour and management. 2

A. Concept of Social Justice

It is difficult to precisely define the meaning of social justice. It is a vague term. Indeed, in
Muir Mills Cast?, Justice Bhagwati felt that social justice is a very vague and indeterminate
expression and that no clear cut definition can be laid down which may cover all situations.
He, however, observed that 'without embarking upon a discussion as to the exact connotation
of the expression 'Social Justice', we may only observe that the concept of social justice does
not emanate from the fanciful notions of any adjudicator, but must be founded on a more
solid foundation.'

2 See J K Cotton Spining & Weaving Mills v. Labour Appellate Tribunal, AIR 1964 SC 737.
3 AIR 1995 SC 170.
 Introduction to Labour Law • 5

B. Social Justice and the Constitution of India

The Constitution of India in the Preamble resolved to secure to all its citizens : Justice-social,
economic and political. Therefore, the concept of social justice is not foreign to legal order.
Social justice is the primary objective of the state as envisaged in our Constitution. Social
justice is one of the aspirations of the Indian Constitution. In order to secure to all citizens
social justice, the Indian Constitution guarantees several fundamental rights.

C. Application of Concept of Social Justice in Industrial Adjudication

The application of the concept of social justice in the adjudication of industrial disputes is
now well settled. However, there is a word of caution. Its application may vary according
to the individual presiding officer's view, which may be fanciful. Thus in Punjab National
Bank v. Ram Kanwar4, the Supreme Court observed that social justice does not mean that
reason and fairness must always yield to convenience of a party. The Court held that such
one-sided or partial view is next of kin to caprice or humour. Social justice need not always
be in favour of workers-there may be cases, whereby their own conduct or on account of
clear or unambigous provisions in a statute, they may not be entitled to relief. In such cases,
grant of relief would not be just or fair.
The Supreme Court has applied the principles of social justice while upholding the
workman's right to equal pay for equal work, reinstatement in service in case of wrongful
discharge or dismissal, payment of wages to temporary or daily rated employees at the rate
payable to permanent employees and regularization and confirmation of casual and daily
wages employees. The Court has also elevated the right to work, right to equal pay for equal
work and right to get minimum wages as fundamental rights. These pronouncements of
the Court are directed to secure the goal of social justice which has now attained the status
of basic feature of industrial adjudication.
A survey of decided cases reveals that courts have generally applied the doctrine of social
justice in interpreting labour laws. However, there has been a conflict of opinion in the high
courts and even in the Supreme Court on the question of application of the concept of social
justice. In Central India Spinning and Weaving and Manufacturing Co case5, Justice Modholkar
speaking for the Bombay High Court held that the concept of social justice ought not to be
imported in interpreting the Industrial Disputes Act or other similar Acts. The same learned
judge speaking for Supreme Court in Rai Sahab Ram Kanwar's Case6 held that tribunal has
no jurisdiction to decide on the basis of its own concept of social justice. However, Justice
Gajendragadkjar in JK Cotton & Spinning and Weawing Mills Case7 rejected the argwnent that the
concept of social justice is irrelevant. He added that 'the concept of social justice has now become
such an integral part of industrial law that no one can suggest that industrial adjudication can
or should ignore the claims of social justice in dealing with industrial disputes.' He observed:

The concept of social justice is not narrow, or one-sided, or pedantic, and not
confined to industrial adjudication alone. Its sweep is comprehensive. It is
founded on the basic ideal of socio-economic equality and its aim is to assist the
removal of socio-economic disparities and inequalities; nevertheless, in dealing

4 (1957) ILLJ 542.

5 Central India Spg. Wvg & Mfg Co. Ltd v. Industrial Court, (1959) ILLJ 468.
6 (1963) 2 LLJ 65.
7 AIR 1964 SC 737.
6 • Industrial Relations and Labour Laws

with industrial matters, it does not adopt a doctrinaire approach and refuses to
yield blindly to abstract notions, but adopts a realistic and pragmatic approach.
It, therefore, endeavours to resolve the competiting claim of employers and
employees by finding a solution which is just and fair to both parties with the
object of establishing hannony between capital and labour, and good relationship.
The ultimate object of industrial adjudication is to help the growth and progress
of national economy, and it is with that ultimate object in view that industrial
disputes are settled by industrial adjudication on principles of fair play and justice.
In Harijinder Singh v. Punjab State Warehousing Corpn 8, the Supreme Court has
elaborately discussed the concept of social justice and its application. The Court observed:
The preamble and various articles contained in Part IV of the Constitution
promote social justice so that life of every individual becomes meaningful and
he is able to live with human dignity. The concept of social justice engrafted in
the Constitution consists of diverse principles essentially for the orderly growth
and development of the personality of every citizen. Social justice is thus an
integral part of justice in the generic sense. Justice is the genus, of which social
justice is one species. Social justice is a dynamic device to mitigate the sufferings
of the poor, weak, dalits, tribals and deprived sections of society and to elevate
them to the level of equality to live a life with dignity of person. In other words,
the aim of social justice is to attain substantial degree of social, economic and
political equality, which is the legitimate expectation of every section of society.
In a developing society like ours which is full of unbridgeable and ever-widening
gaps of inequality in status and of opportunity, law is a catalyst to reach the ladder
of justice. The philosophy of welfare state and social justice is amply reflected in
large number of judgments of this Court, various high courts, national and state
industrial tribunals involving interpretation of the provisions of the Industrial
Disputes Act, Indian Factories Act, Payment of Wages Act, Minimwn Wages Act,
Payment of Bonus Act, Workmen's Compensation Act, the Employees Insurance
Act, the Employees Provident Fund and Miscellaneous Provisions Act and the
Shops and Commercial Establishments Act enacted by different states.
In Ramon Services (P) Ltd v. Subhash Kapoor,9 Justice R P Sethi, observed: 'after
independence, the concept of social justice has become a part of our legal system. This
concepts gives meaning and significance to the democratic ways of life and of making the
life dynamic. The concept of welfare State would remain in oblivion unless social justice is
dispensed. Dispensation of social justice and achieving the goals set forth in the Constitution
are not possible without the active, concerted and dynamic efforts made by the persons
concerned with the justice dispensation system.'
In LIC of India v. Consumer Education and Research Centre,10 Justice K Ramaswamy
observed that social justice is a device to ensure life to be meaningful and liveable with hwnan
dignity. The State is obliged to provide to workmen facilities to reach minimum standard of
health, economic security and civilized living. The principle laid down by this law requires
courts to ensure that a workman who has not been found guilty cannot be deprived of
what he is entitled to get. Obviously, when a workman has been illegally deprived of his

8 (2010) 3 sec 192. para 19.

9 (2000) 1 sec 118.
10 (1995) s sec 482.
 Introduction to Labour Law • 7

device then that is misconduct on the part of the employer and employer cannot possibly
be permitted to deprive a person of what is due to him.

The Supreme Court in S P Gupta v. Union of India, popularly known as the Transfer of Judges
case 11 formulated the doctrine of public interest litigation in the following words:
Where a legal wrong or a legal injury is caused to a person or to a determinate
class of persons by reason of violation of any constitutional or legal right or
any burden is imposed in contravention of any constitutional or legal provision
without authority of law or any such legal wrong or legal injury or illegal
burden is threatened and such person or determinate class of persons is by
reason of poverty, helplessness or disability or economically disadvantaged
position, unable to approach the court for relief, any member of the public can
maintain an application for an appropriate direction or writ or order.
The Court found the view that public interest litigations unnecessarily clog the dockets
of the court and add to the already staggering arrears of cases pending for years and should
be discouraged, to be a totally perverse one smacking of an elitist and status quo approach.
On the contrary, the Court found that the doors of courts were open for vindicating the
right of the rich and well-to-do, for the landlord and the gentry, for the wealthy and the
affluent and held that those who have decried public interest litigation did not seem to
realize that courts were not meant only for the business magnet and the industrial tycoon,
but they existed also for the poor and the downtrodden. The Court accordingly treated the
letter written to a judge to be a writ petition.

The International Labour Organization (ILO) has played a key role in promoting international
labour standards. It was set up in 1919 under the Treaty of Versailles. India is a founder
member of ILO.
There are certain fundamental principles of the ILO that were laid down at the time
of its inception. These principles are known as the Charter of Freedom of Labour. The main
principles of ILO are as follows:
• Labour is not a commodity.
• Freedom of expression and of association are essential to sustained progress.
• Poverty anywhere constitutes danger to prosperity everywhere.
• The war against want requires to be carried on with unrelenting vigour within
each nation and by continuance and concerted international effort in which the
representatives of workers and employers, enjoying equal status with those of the
governments, join with them in free discussion and democratic decision with a view
to promotion of common welfare.

11 AIR 1982 SC 149.

8 • Industrial Relations and Labour Laws

The aforesaid principles were modified at the 26 th session of ILO held in Philadelphia
in 1944. It also adopted a Declaration that concerns with the aims and purposes of the
organization. This Declaration is known as the Philadelphia Charter.
By 2008, ILO had adopted 190 conventions and 198 recommendations. India had
ratified 42 of the 190 conventions and one protocol. The Constitution of India and labour
legislation uphold all the fundamental principles envisaged in the 8 core international
labour standards. It ratified 4 of the 8 core conventions of ILO. With regard to the others,
India seeks to proceed with progressive implementation of the concerned standards and
leave the formal ratification for consideration at a later stage when it becomes practicable.
The ILO has influenced labour legislation in India. Most labour legislation has been
enacted in conformity with ILO conventions.
Today, the ILO stands as one of the specialized agencies of the United Nations with
longer history than any of its sister organizations.

A Structure and Activities

The ILO is a tripartite organization consisting of representatives of governments, employers
and workers of the member-countries. There is parity of representation as between
government and non-government groups and also between employers' and workers' groups.
The structure of the organization has helped in welding together employers and workers
in various countries (including India) into independent organizations. In our country, for
a long time now the representatives of employers and workers have secured, through their
respective constituencies, elective posts on the Governing Body of the ILO.
The ILO operates through its (z) Governing Body; (ii) International Labour Office; and
(iii) the International Labour Conference, which meets once a year to review the international
labour scene.

B. Making of International Labour Standard

The annual conference sets normative standards on important matters such as regulation
of hours of work and weekly rest in industry, equal remuneration for equal work, abolition
of forced labour, discrimination in employment, protection of workmen against sickness,
disease and work-injury, regulation of minimwn wages, prohibition of night work for women
and young persons, recognition of the principle of freedom of association, organization of
vocational and technical education, and many areas concerning labour managementrelations.
The standards are evolved after a full debate in the Conference. Usually the standards are
accepted after discussions in the Conference over two successive years. Agreed standards
on a specified subject are then converted into an international instrument, a 'Convention'
or a 'Recommendation', each having a different degree of compulsion. A 'Convention' is
binding on the member-state which ratifies it; a 'Recommendation' is intended as a guideline
for national action. 12

C. ILO Declaration on Fundamental Principles and Rights at Work

The ILO declaration on Fundamental Principles and Rights at Work, adopted by the
International Labour Conference in June 1998, declares inter alia that all member states,

12 See Govt. of India, Report of the First National Commission on Labour (1968), 473.
 Introduction to Labour Law • 9

whether they have ratified the relevant conventions or not, have an obligation to respect,
promote and realize the principles concerning the fundamental rights which are the subject
of those conventions, namely:
(a) freedom of association and the effective recognition of the rightto collective bargaining;
(b) elimination of all forms of forced or compulsory labour;
(c) effective abolition of child labour; and
(d) elimination of discrimination in respect of employment and occupation. 13
The primary goal of the ILO today is to promote opportunities for women and men to
obtain decent and productive work in conditions of freedom, equity, security and human
dignity. The goal is not just the creation of jobs but the creation of jobs of acceptable quality .14
The Government of India has ratified Convention 122 on Employment and Social
Policy in 1998. Article 1 of the Convention lays down:
1. With a view to stimulating economic growth and development, raising levels of
living, meeting manpower requirements, and overcoming unemployment and under
employment, each member shall declare and pursue, as a major goal, an active policy
designed to promote full, productive and freely chosen employment.
2. The said policy shall aim at ensuring that:
(a) There is work for all who are available for and seeking work;
(b) Such work is as productive as possible;
(c) There is freedom of choice of employment and fullest possible opportunity for each
worker to qualify for, and to use skill and the endowments in a job for which he
is well suited, irrespective of race, colour, sex, religion, political opinion, national
extraction or social origin.
3. The said policy shall take due account of the state and the level of economic
development and mutual relationships between employment objectives and other
economic and social objectives, and shall be pursued by methods that are appropriate
to national conditions and practices. 15
The aforesaid convention was ratified by India at a time when unemployment levels
were high. One, therefore, has to presume that the government is now committed to pursue
an active policy designed to promote full, productive and freely chosen employment. 16
From the commibnents of the Government oflndia, it can be deduced that the following
rights of workers have been recognized as inalienable and must, therefore, accrue to every
worker under any system of labour laws and labour policy. These are:
(a) Right to work of one's choice
(b) Right against discrimination
(c) Prohibition of child labour
(d) Just and humane conditions of work
(e) Right to social security

13 Govt. of India, Report of the Second National Commission on Labour (2002), 35.
14 Ibid.
15 Govt. of India, Report of the Second National Commission on Labour (2002), 35.
16 Ibid.
1o • Industrial Relations and Labour Laws

(f) Protection of wages including right to guaranteed wages

(g) Right to redressal of grievances
(h) Right to organize and form trade unions and right to collective bargaining
(z) Right to participation in management

An important development in the arena of labour law and policy was setting up of the
(first) National Commission on Labour in December, 1966 by the Government of India. The
Commission was asked to undertake a comprehensive review of labour law. The Commission
investigated the problems relating to labour and formulated a policy for the future. In the
sphere of industrial relations, the Commission made the following recommendations: 17
(z) Any sudden change replacing adjudication by a system of collective bargaining is
neither called for nor practicable. The process has to be gradual. A beginning has to
be made in the move towards collective bargaining by declaring that it will acquire
primacy in the procedure for settling industrial disputes. Conditions have to be created
for promotion of collective bargaining. The most important among them is statutory
recognition of a representative union as the sole bargaining agent. The place which
strikes/lock-outs should have in the overall scheme of industrial relations needs to
be defined; collective bargaining cannot exist without the right to strike/lockout.
(ii) With the growth of collective bargaining and the general acceptance of recognition
of representative unions and improved management attitudes, the ground will be
cleared, at least to some extent, for wider acceptance of voluntary arbitration.
(iii) It would be desirable to make recognition compulsory under a central law in all
undertakings employing 100 or more workers or where the capital invested is above
a stipulated size. A trade union seeking recognition as a bargaining agent from an
individual employer should have a membership of at least 30 per cent of workers in
the establishment. The minimum membership should be 25 per cent if recognition is
sought for an industry in a local area. The proposed National/State Industrial Relations
Commission will have the power to decide the representative character of a union,
either by examination of membership records, or if it considers necessary, by holding
an election by secret ballot open to all employees.
(iv) The present arrangement for appointing ad hoe industrial tribunals should be
discontinued. An Industrial Relations Commission (IRC) on a permanent basis should
be set up at the centre and one in each state for settling 'interest' disputes. The IRC
will be an authority independent of the executive. The main functions of the National/
States IRCs will be (a) adjudication in industrial disputes; (b) conciliation; and (c)
certification of unions as representative unions.
(v) In essential industries/ services, when collective bargaining fails and when the parties
to the dispute do not agree to arbitration, the IRC shall adjudicate upon the dispute
and its award shall be final and binding.
It is unfortunate that most of the above recommendations have not been implemented.

17 Govt. of India, Report of the Second National Commission on Labour (2002), 35.
 Introduction to Labour Law • 11

The poor conditions of unorganized labour and the defective labour laws continued to engage
public attention. On 11 January 1999, the Government of India announced its decision to
set up the second National Commission on Labour to make suggestions to rationalize laws
for workers in the organized sector and recommend an 'umbrella' law to protect labour in
unorganized employments. The Commission was asked to take into account the emerging
economic environment involving rapid technological changes, requiring response in terms
of change in methods, timing and conditions of work, in industry, trade and services,
globalization of economy, besides desirability to bring the existing laws in tune with further
labour market needs and demands. 18 While making a study, the Commission was also
required to examine the minimum level of labour protection and welfare measures and the
basic institutional framework for ensuring the same in the manner which is most conducive
to a flexible labour market and adjusbnents necessary for furthering technological changes
and economic growth.
The (second) National Commission on Labour, which submitted its reportto the Government
of India on 29 June 2002, has made wide ranging recommendations on various facets of
labour, viz., review of laws, social security, women and child labour, skill development,
labour administration, unorganized sector, etc. Some of the significant recommendations
are as under:
(z) Existing set of labour laws should be broadly grouped into four or five sets of laws
pertaining to: (z) industrial relations; (ii) wages; (iii) social security; (iv) safety; and
(v) welfare and working conditions. The Commission is of the view that the coverage
as well as the definition of the term 'worker' should be the same in all groups of
laws, subject to the stipulation that social security benefits must be available to all
employees including administrative, managerial, supervisory and others excluded
from the category of workmen and those not treated as workmen.
(ii) There is no need for different definitions of the term 'appropriate government'.
There must be a single definition of the term, applicable to all labour laws. The
Central Government should be the 'appropriate government' in respect of Central
Government establishments, railways, posts, telecommunications, major ports,
light-houses, Food Corporation of India, Central Warehousing Corporation, banks
(other than cooperative banks), insurance and financial institutions, mines, stock
exchanges, shipping, security, printing presses, air transport industry, petroleum
industry, atomic energy, space, broadcasting and television, defence establishments,
cantonment boards, central social security institutions and institutions such as
those belonging to CSIR, ICAR, ICMR, NCERT and in respect of industrial disputes
between the contractor and the contract labour engaged in these enterprises/
establishments. In respect of all others, the concerned state government/union
territory administrations should be the appropriate government. In case of
dispute, the matter will be determined by the proposed National Labour Relations
Commission.
(iii) Central laws relating to the subject of labour relations are currently the Industrial
Disputes Act, 1947, the Trade Unions Act, 1926 and the Industrial Employment (Standing

18 See Hindustan Times, January 12, 1999, New Delhi.

12 • Industrial Relations and Labour Laws

Orders) Act, 1946. Mention must also be made of the Sales Promotion Employees
(Conditions of Service) Act, 1976 and other specific acts governing industrial relations
in particular trades or employments. There are state level legislations too on the subject.
The provisions of all these laws be judiciously consolidated into a single law called the
Labour Management Relation law or the law on Labour Management Relations.
(iv) One of the most important steps that one needs to take in rationalizing and simplifying
the existing labour laws is in the area of simple common definitions of terms that are
inconstant use; such terms include 'worker', 'wages' and 'establishment'. By making
the law applicable to an establishment employing 20 or more workers, irrespective of
the nature of the activity in which the establishment is engaged, we have avoided the
need to define 'industry'. After examining all aspects of the question, we have come
to the conclusion that persons engaged in domestic service are better covered under
the proposed type of umbrella legislation, particularly in regard to wages, hours of
work, working conditions, safety and social security.
(v) In the case of socially essential services like water supply, medical services, sanitation,
electricity and transport, when there is a dispute between employers and employees
in an enterprise, and when the dispute is not settled through mutual negotiations,
there may be a strike ballot as in other enterprises, and if the strike ballot shows that
51 per cent of workers are in favour of a strike, it should be taken that the strike has
taken place, and the dispute must forthwith be referred to compulsory arbitration (by
arbitrators from the panel of the Labour Relations Commission [LRC], or arbitrators
agreed to by both sides).

A. Current Approaches of Indian Judiciary

A survey of decided cases of the Supreme Court and high courts reveals a marked shift
in their approaches to deal with labour issues. While prior to the 21 st Century and more
particularly between 1970 and 1990, the interests of workers were given prime consideration
in dealing with labour cases; after 1990 and to be more specific, at the beginning of the 21 st
Century, the change in economic policy and globalization have influenced the decision
makers.
This shift in the approach of Indian judiciary may be seen in the judgments in the area
of discipline and disciplinary procedure, voluntary and compulsory retirement, service
contract and standing orders, compliance of natural justice, bandhs, demonstrations,
retrenchment and on management's prerogative during the pendency of proceedings
before a labour tribunal. The courts evolved new norms to determine whether a person is
a workman or not, and they have even exploded the judicial myth on the interpretation of
the word 'industry' and workman.
The Supreme Court felt that this was necessary in order to strike a balance between
the earlier approach in the realm of industrial relations wherein only the interests of the
workmen were focused on, and the current emphasis on ensuring fast industrial growth
in the country. In several decisions, the Court noticed how discipline at the workplace/
industrial undertaking received a setback. In view of the change in the economic policy of
the country, the Court felt that it might not now be proper to allow employees to break
 Introduction to Labour Law • 1 3

discipline with impunity because we are governed by the rule of law. All action therefore,
must be taken in accordance with the law.
The aforesaid line of approach received a jolt in two decisions reported in 2010-2011.
The Court19 noticed that 'there had been a visible shift in the courts' approach in dealing
with cases involving the interpretation of social welfare legislations. According to the
Court, globalization and liberalization are the raison d'etre of the judicial process, and an
impression has been created that the constitutional courts are no longer sympathetic towards
the plight of industrial and unorganized workers. It was felt that in large number of cases,
relief has been denied to the employees falling in the category of workmen, who are illegally
retrenched from service by creating by-lanes and side-lanes in the jurisprudence developed
by this Court in three decades. It added that the plea raised by the public employer in such
cases is that the initial employment/ engagement of the workman/ employee was contrary
to some or the other statute or that reinstatement of the workman will put unbearable
burden on the financial health of the establishment. It was also felt that the courts have
readily accepted such plea unmindful of the accountability of the wrong doer and indirectly
punished the tiny beneficiary of the wrong ignoring the fact that he may have continued in
the employment for years together and that micro wages earned by him may be the only
source of his livelihood.'
It was further felt that if a man is deprived of his livelihood, he is deprived of all his
fundamental and constitutional rights and for him the goal of social and economic justice,
equality of status and of opportunity, the freedoms enshrined in the Constitution remain
illusory. Therefore, the approach of the courts must be compatible with the constitutional
philosophy of which the directive principles of State policy constitute an integral part and
justice due to the workman should not be denied by entertaining the specious and untenable
grounds put forward by the employer-public or private.20
In 2011, the Supreme Court also deprecated the new technique of subterfuge adopted
by some employers in recent years in order to deny the right of workmen under various
labour statutes by showing that the concerned workmen are not their employees but are the
employees/workmen of a contractor, or that they are merely daily wagers or short term or
casual employees when in fact, they are doing the work of regular employees.21 The Court
therefore, disapproved and even condemned such practices. It felt that globalization/
liberalization cannot be at the cost of exploitation of workers22 •

B. Judicial Legislation on Industrial Relations

The Indian judiciary has made significant contribution in not only evolving new industrial
jurisprudence but has also brought the following judicial legislations in the process of
interpretation.
1. Regulation of management's power to dismiss workers by laying down various norms
2. Termination of service after giving 3 months' notice or wages in lieu thereof without
assigning any reason-illegal

19 Harjinder Singh v. Punjab State Warehousing Corporation, (2010} 3 SCC 192.

20 Ibid.
21 Bhilwara Dugdh Utpadak Sahkari S Ltd v. Vinod Kumar Sharma, 2011 LLR 1079 (SC}.
22 Ibid.
14 • Industrial Relations and Labour Laws

3. Automatic termination of service for absence for specific period under standing orders
without following the principles of natural justice-not proper
4. Wages for the period of strike/lock-out under certain circumstances
5. Widened scope of retrenchment
6. Evolved triple test for determining the scope of industry
7. Sexual harassment of women at work place by laying down law and procedure
8. Representative union-to be determined by secret ballot (Food Corporation of India
case)
9. Absorption of contract labour-when contract is sham
10. Closure of industries due to (i) Environmental pollution and (ii) Hazardous nature
11. Justified and unjustified strikes and lock-outs
12. Denial of minimum wages to be forced labour
13. Child labour-abolition and social security scheme
14. Bonded labour-rehabilitation, identification, abolition-enforcement
15. Workers' participation in management (i) Winding up and (ii) Running sick industry
16. Profit sharing-bonus- linked with productivity
17. Rules of natural justice to be followed in domestic inquiry

I
Laying Permission Co-worker Copy of Adducing fresh Pendency
down of lawyers inquiry evidence at of criminal
procedure to appear report tribunal's level proceedings
under Section 1lA

18. Enforcing code of discipline

Labour law, which seeks to regulate the relations between employers and their workmen,
does not address several problems. Even though labour laws have been amended during the
last few years, but it cannot be denied that they have become obsolete. Indeed, they suffer
from various defects and shortcomings. Thus, most labour legislations are not applicable
to unorganized labour, which constitutes about 93 per cent of the labour force. Further,
most labour legislation is more than five decades old. It is felt that our labour laws are
overprotective, over reactive, fragmented, outdated and irrelevant and as such have created
hurdles in achieving the target of fair labour practices.
The emergence of globalization, liberalization and privatization has brought new
challenges. There is therefore, mounting pressure to reform labour laws. In view of this,
the second National Commission on Labour had, in its report, made some headway in
removing the irritants and stumbling blocks. However, it is unfortunate that no positive
steps have so far been taken to give legislative shape to the recommendations of the
Commission.
 Introduction to Labour Law • 15

It is often contended by employers that labour laws place unreasonable restrictions

on them to hire workmen and terminate their services and inhibit them in meeting global
competition. They also claim that this deters them from opening of new businesses and
discourages employment intensity. On the other hand, workers' organizations have opposed
the dilution of job security provisions in the law since they feel that it would encourage
exploitation of workers and deterioration in the quality of employment. Whatever may be
the justification of managements and trade unions, there is a need to re-look at the existing
provisions in view of the interests of workers and also the recent developments. The key
areas of labour law reforms are as under:
1. Multiplicity of labour laws and the need for fewer labour legislations if not a single
labour code
There are about 165 legislations-both central and state to deal with labour. These
are the most voluminous in the world. More laws mean less implementation if the
inspection and enforcement machinery is limited. The first National Commission on
Labour and National Labour Law Association favoured single labour code and even
prepared a draft labour code. The second National Commission on Labour grouped
the entire labour law into four or five categories. Be that as it may, it is better to have
fewer labour laws, if not a single labour code and better enforcement.
2. Law relating to multiple definitions of same/similar terms under labour legislation
to be eliminated
(i) The Industrial Disputes Act, 1947 defines 'workman', the Factories Act defines
'worker' and the Employees' State Insurance Act, 1948 defines 'employee' in
different ways. This creates confusion. In order to bring uniformity, the term
'worker' should be uniformly adopted and defined as suggested by the second
National Commission on Labour in all labour legislation.
(ii) The expression 'appropriate government' has been differently defined in various
labour legislations. In order to reduce conflict and bring uniformity, there should
be a single definition. The 2010 amendment in the IDA has however, provided a
guideline.
(iii) The term 'wage' has been defined differently under the Minimum Wages Act,
1948, Payment of Wages Act, 1936, Payment of Gratuity Act, 1972 and the
Industrial Disputes Act, 1947. A need has therefore, been felt to provide a single
definition.
3. Law relating to arena of interaction-vague
The definition of 'industry' under the Industrial Disputes Act, 1947 and 'establishment'
under the Industrial Employment (Standing Orders) Act, 1946, despite the judicial
interpretation, is still unsettled and needs to be simplified.
4. Law relating to salary limit-obsolete
The salary limit provided under various labour legislations has become obsolete. Thus,
the wage limit under the Payment of Wages Act, 1936 has now been fixed at ~6,500 per
month. Likewise, the 2010 amendment in the Industrial Disputes Act fixes the wage
limit for workers doing supervisory work at ~10,000 per month. On the contrary, there
is no wage limit for persons doing technical/ skilled work. Thus, even persons like
a pilot drawing several lakhs per month would be a workman under the Industrial
Disputes Act, but a supervisor drawing ~10,000 or more per month would not be a
workman. This is an area which requires review.
16 • Industrial Relations and Labour Laws

5. Number of persons employed

The minimum number of persons prescribed under various labour legislations
including social security and minimum standard legislations need to be reviewed.
6. Simplify and rationalize labour
The substantive law and procedures prescribed under various labour legislations
should be simplified and rationalized.
7. Laws regulating strikes and lockouts
These need to be reviewed as under:
(i) Minimum period of notice must be prescribed for strikes/lockouts in non-public
utility services.
(ii) Secret ballot method for resorting to strikes may be considered.
(iii) Penalties prescribed for illegal strikes/lockouts should be deterrent in nature.
(iv) Just like go-slow, stay-in-strike should be treated as a serious misconduct.
8. Notice of change under Section 9A of the Industrial Disputes Act, 1947
This needs to be reviewed, particularly where the employers expands the business or
increases the strength of labour.
(i) Notice of Change-Mere Display of Notice not Sufficient
In Management of Salem District Co-operative Milk Producers' Union Ltd v. Industrial
Tribunal,2 3 the Madras High Court held that mere display of the notice on the
notice board will not be sufficient. The notice must be in terms of the provisions of
the Industrial Disputes Act and the Tamil Nadu Industrial Disputes Rules which,
inter alia, stipulate that it must be exhibited in Tamil.
(ii) Recovery of Payments towards Inadmissible Allowances and Incentives
In Jossie v. Flag Officer Commanding-in-Chief,24 the Kerala High Court held that
recovery of payment made towards inadmissible allowance made by mistake is
not violation of Section 9A of Industrial Disputes Act, 1947.
(iii) Transfer of Employees
In Associated Cement Co. Ltd v. Cement Staff Union,2 5 the Bombay High Court held
that transfer of an employee being an incident of service, there is no question of
the order of transfer not being in violation of Section 9A of the Industrial Disputes
Act, 1947.
9. Government's permission for retrenchment, lay-off and closure of enterprises
The crucial issue is (i) whether the management employing 100 workers or more
should seek prior approval of the appropriate government before lay-off, retrenchment
or closure, and (ii) whether the existing limit of 100 workers should be raised to 300.
10. Problems of enforcement and compliance of labour laws
The existing labour legislation does not fully address the problems of enforcement.
This is more evident in the unorganized sector. Quite apart from this, the enforcement

23 2010 LLR 435.

24 2011 LLR 1168.
25 2010 LLR 162.
 Introduction to Labour Law • 17

process has failed to meet the intent of legislature. The penal provisions, particularly
in case of illegal strikes /lockouts have remained only on pa per. It is felt that it is better
not to have a law which is respected more in breach than in its observance. It is further
felt that so long as the cost of violation is less or negligible than the cost of compliance,
the provisions of labour laws would remain on paper.
11. Recognition of trade unions
A crucial issue in labour laws relates to recognition os trade unions. This is so because
there is no provision in any central labour legislation for the recognition of trade unions
by the employer. The basic issue is about the mode of determining the bargaining agent.
The Federation of Trade Unions is divided over the issue of whether verification or
secret ballot method should be adopted. No doubt, several legislative attempts have
been made but till date, (except in some states) there is no central legislation to deal
with recognition of trade unions.
12. National minimum wage
The first National Commission on Labour recommended that national wage is
not necessary because of wide variations due to socio-economic and demographic
conditions not only in various states but also at the regional and district levels within
the states. However, there is a need to examine whether there should be a national
minimum wage for all scheduled employment.
13. Other areas for reform
(i) Social security for unorganized workers, particularly health, maternity benefits,
disablement benefits and old age benefits even after the enactment of the
Unorganized Worker's Social Security Act, 2008.
(ii) Contract labour
(iii) Inter-state migrant workmen
(iv) Child labour
(v) Minimum standards of employment for all workers
(vi) Application and extension of Equal Remuneration Act, 1976
Industrial Relations:
An Overview 2
Industrial relations is a dynamic socio-economic process. It is a 'designation of a whole field
of relationships that exist because of the necessary collaboration of men and women in the
employment processes of industry'. 1 It is not the cause but an effect of social, political and
economic forces. 2
It has two faces like a coin-cooperation and conflict. 3 The relationship, to use Hegal's
expression, undergoes change from thesis to antithesis and then to synthesis. Thus, the
relationship starting with cooperation soon changes into conflict and after its resolution,
again changes into cooperation. 4 This changing process becomes a continuous feature in
an industrial system.
The relationship between labour and management is based on mutual adjushnent of
interests and goals. 5 It depends upon economic, social and psychological satisfaction of the
parties. Higher the satisfaction, healthier the relationship. In practice it is, however, found
that labour and capital constantly strive to maximize their pretended values by applying
resources to institutions. In this effort they are influenced by and are influencing others.
Both of them try to augment their respective income and improve their power position.
The major issues involved in the industrial relations process are terms of employment
such as wages, dearness allowances, bonus, fringe benefits, working conditions, leave,
working hours, health, safety and welfare, non-employment, job security, personnel issues
such as discipline, promotional opportunities and recognition of trade unions. However, in
view of sharply divided and vociferously pressed rival claims, the objectives of labour and
management are not amenable to easy reconciliation. This is all the more so because the

1 Dale Younder, Personnel Management and Industrial Relations (Englewood Cliffs, New Jersey: Prentice
Hall Inc. , 1965).
2 R C Goyal, 'Determinants of Industrial Relations', Indian Journal of Labour Economics, XII, 78.
3 Id. at 91.
4 Ibid.
5 Ibid.
20 • Industrial Relations and Labour Laws

resources are limited. Be that as it may, the means adopted to achieve the objectives which
vary from simple negotiation to economic warfare adversely affect the community's interest
in maintaining an uninterrupted and high level of production. Further, in a country like
India where labour is neither adequately nor properly organized, unqualified acceptance of
the doctrine of' free enterprise', particularly between labour and management, strengthens
the bargaining position of the already powerful management.
It is apparent that the State, with its ever-increasing emphasis on welfare aspect of a
governmental activity, cannot remain a silent and helpless spectator in the economic warfare.
The legislative task of balancing the conflicting interest in the arena of labour-management
relations proves to be an extremely difficult one, in view of mutually conflicting interests
of labour and management. The substantive issues of industrial relations are of perennial
nature and thus, there can never be a 'solution for all times to come.'6 There can only be
broad norms and guidelines as criteria in dealing with issues of industrial relations.7 The
law plays an important role in shaping the structure of industrial relations. 8 It represents the
foundation from which the present system and procedure flows to deal with the problems
of industrial relations. 9

India is primarily an agricultural country. As per the Census of India, 2001, the total
employment in both organized and unorganized sector in the country was of the order of
40.22 crore. Out of this, about 2.65 crore were in the organized sector and the balance 37.57
crore in the unorganized sector. 10 Out of 37.57 crore workers in the unorganized sector,
23.7 crore workers were employed in agriculture sector, 1.7 crore in construction, 4.1 crore
in manufacturing activities and 3.7 crore each in trade and transport, communication
and services. The workers in the unorganized sector fall in various categories but a large
number of them are home-based workers engaged in occupations like beedi rolling, agarbatti
making, pappad making, tailoring, zari and embroidery work. However, the largest chunk of
unorganized labour, namely, 60 per cent being agricultural workers and cultivators including
small and marginal farmers, who are badly in need of legal/social protection, have been
left out. Be that as it may, the importance of industry cannot be minimized. Said J L Nehru:

The alternative (to industrialization) is to remain backward, underdeveloped,

poverty-stricken and a weak country. We cannot even retain our freedom
without industrial growth.11
According to a survey conducted by the National Sample Survey Organization in the
year 2004-2005, out of 45.9 crore which constitute the total labour force, 43.3 crore persons are
engaged in unorganized labour which constitutes 93 per cent of work force. They are denied
job security, social security and other benefits. Most of the labour force, particularly in the

6 See Report of the Study Group on Industrial Relations (Western Region), National Commission on
Labour (1969). 26.
7 Ibid.
8 0 P Thakkar, 'Determinants of Industrial Relations', Indian Journal of Labour Economics, XII 102.
9 See supra note 6 at 34.
10 Government of India, Ministry of Labour Annual Report 2007 (2009) 2.
11 Report of the All Indian Congress Committee at Avadi Ganuary, 1955).
 Industrial Relations: An Overview • 21

unorganized sector, is unskilled, underemployed, self-employed, casual and unprotected.

Rural development is essential for upgrading the living conditions of the overwhelming
majority of people and providing minimal economic sustenance to the poverty-stricken
sections of the community. But, industrial development is necessary for affluence and for
bringing the benefit of scientific and technological progress to all sections of the community.
Out of the total of 40.22 crore in terms of 2001 census and 45.9 crore in terms of estimate
of National Sample Survey 2004-2005, 12.7 crore were cultivators, 10.6 crore were agricultural
labourers, 1.6 crore were in household industries and 15.1 crore were other workers. Most
labour legislation is not applicable to them. However, an important recent initiative taken by
the Ministry of Labour and Employment to safeguard the interest of unorganized workers has
been the enacbnent of the Unorganized Workers' Social Security Act, 2008. The Act provides
for constitution of National Social Security Board which will recommend formulation of social
security schemes for unorganized workers from time to time. Accordingly, the National Board
was constituted in 2009 which recommended that the social security schemes viz; Swavalamban
Yojna, Rashtriya Swasthya Bima Yojana (RSBY) providing for health insurance, Janashree Bima
Yojana (JBY) providing death and disability cover and Indira Gandhi National Old Age Pension
Scheme (IGNOAPS) providing for old age pension which may be extended to building and
other construction workers, MNREGA workers, Asha workers, Anganwadi workers and
helpers, porters/ coolies/ gangmen and casual and daily wagers.

The importance of sustained industrial production underlines the need of avoiding work-
stoppages and loss of production. The economics of work-stoppages may be recapitulated.
Between 1921 and 2010, India lost about 8.62 million12 man-days in work-stoppages caused
by industrial disputes between workmen and employers.
The alarming magnitude of the statistical data is even more awe-inspiring considering
that in the 2001 census, 402.3 million workers were at a standstill for about 5 days. If one
were to add the secondary and tertiary effects of work stoppages, the figures would be
gigantic. Thus, it is said that India loses the highest number of man-days and has the highest
rate of absenteeism.

Period-wise details given in Table 2.1 below:

Table 2.1: Number of Workers and Man-days Lost

Period Number of workers Number of man-days lost
1921-25 1,919,714 37,317,994
1926-30 1,551,634 49,192,274
1931-35 831,070 12,240,537
1936-40 2,079,633 36,109,103
1941-45 1,886,340 18,954,560
1946-50 6,267,156 56,524,900

12 See Government of India, Indian Labour Journal (2010) 808.

22 • Industrial Relations and Labour Laws

Period Number of workers Number of man-days lost

1951-55 2,,972,075 19,608,975
1956-60 4,012-342 33,388,609
1961-65 3,744,153 28,504,000
1966-70 8,224,314 87,849,000
1971-75 8,895,102 119,879,000
1976-80 3,327,493 45,958,117
1981-85 7,546,000 791,017,000
1986-91 7,875,000 168,548,000
1992-98 6,293,000 131,910,000
1999-2004 8,035,000 149,680,000
2005-2009 8,653,326 81,166,877
2010 (P) 331,843 1,677,370
2011 (Jan to May) 45,570 4,85,000

Source. The estimate is based on data given in Appendix II of V B Kaushik, Indian Trade Unions: A
Survey, (1966) p. 322, for the period 1921-46, Table XXV of Indian Labour Year Book, 1950-51, for the
period 1947-50, Table 10.1 of the Indian Labour Statistics, for the period 1951-60, Indian Labour Statistics,
1976, p. 277, for the period 1960-89, Handbook of Labour Statistics of 1992 and Annual Report 1998-99,
2004-05 of the Ministry of Labour, Govt. of India (1999) 27, Indian Labour Year Book, 2007 (2009)
Indian Labour Journal (March, 2011) p. 933, Labour Law Reporter, p. 357.

Unemployment and underemployment are the most important economic evils in a welfare
state. India is no exception. In India, one-sixth of the total population of the country
is either unemployed or chronically underemployed. As per the Government of India
report,13 upto the end of June, 2009, 1.07 lakh pensons had been placed on employment
exchange. The total number of jobseekers by June, 2009 were about 2 lakh. 14 These are the
phenomena of Indian industries that have affected to a considerable extent the standard
of living and have also created disparity in the working class. They have hampered the
growth of the labour movement and trade unions. Political parties may take advantage
of the unemployed millions and divert them from the search for gainful employment
towards unproductive political actions. Further, underutilization of human resources in
the agricultural sector is likely to divert agriculturist section of job-seekers to industrial
sectors. Unemployment poses a serious threat to development programmes. Government
planners should be sensitive to the present problem of unemployment. Labour law can
be modelled or remodelled to implement law, policies and programmes to provide relief
to unemployed.

13 Government of India, Ministry of Labour & Employment, Annual Report 2009-2010 (2010) 221.
14 Ibid.
 Industrial Relations: An Overview • 23

1. Low wages: Discontent amongst industrial workers revolves round the question of
wages. Low wages figure prominently both in industrial and agricultural sectors.
2. Ignorance and illiteracy: Another malady of Indian workers is illiteracy. Out of
2.81 million workers employed in tea plantations, mines, jute, cotton textiles, iron,
and steel, 2.08 million15 workers are illiterate. The workers do not fully realize the
social and economic implications of the modern industrial system and evils arising
therefrom and, therefore, are less likely to insist on reforms. Lack of education among
industrial workers has also given rise to the evolution of outside leadership.
Access to regular employment is mainly limited to better educated workforce. Only
4 per cent of illiterate workforce has access to regular employment. In contrast, approximately
40 per cent of them are casual labourers. Only 9 per cent workers with primary education
have access to regular employment while an overwhelming 35 per cent of them are casual
labourers. 16 The table below tabulates the percentage distribution of workers with different
levels of education by employment status in 2004-05.
Table 2.2: Education Levels of Workers
Education levels of workers Self-em p loyed Regular Casu al
Illiterate 56. 11 4.33 39.56
P rimary 56.03 8.86 35. 11
Middle 58.94 11.88 29. 18
Second ary 60.34 15.75 23.91
H igh er secondary 62.33 25.08 12.59
Gradua te and ab ove 49.45 46.29 4.26

Source: Unit level data of NSSO, Employment & Unemployment Survey, 2004--05

Similarly, workers with higher educational achievements are likely to get higher
wages as compared to those who are less educated. Again, as in case of access to regular
employment, wages increase significantly only after certain thresholds of educational status
(say secondary level) are reached both in rural as well as urban areas. In rural and urban
areas, there is not much difference in wages of illiterates and of those up to primary level
of education. Even middle level of education brings marginal difference in daily earnings.
Wages increase significantly only after minimum secondary level of education.17
3. Heterogeneity: Another characteristic of Indian labour is its heterogeneity. India is
'a vast country where customs and traditions differ considerably from one part to
another. There are distinctions based on caste, creed and religion and provincial jealousy
(where residents of one state look down upon residents of another state). In spite of

15 Ashok Mehta, Dynamics of the Labour Movement, Presidential Address d elivered a t IX Annual
Conference of the Indian Socie ty of Labour Economics (Varanasi, 1965).
16 Government of India, Ministry of Labour & Employment, Annual Report to the People on
Employment (2010) 19.
17 Ibid.
24 • Industrial Relations and Labour Laws

the provisions in the Constitution that there would be no distinction on the basis of
caste, creed, etc., there is no denying that these vices are widely prevalent. 18 The effect
of this is that workers do not unite for better conditions inter se and for reform.
4. Absenteeism: Absenteeism has been a cause of great concern in most of the organizations
in India. There is no hard and fast rule to deal with this problem. Industry-wise and
state-wise, absenteeism rate, i.e., percentage of man-days lost due to absence to the
number of man-days scheduled to work were 10.01 and 8.96 respectively during 2004. 19
However, it is certain that it requires a great deal of expertise to effectively bring down
the cases of absenteeism.
Disciplining is, of course, the last resort to curb and control absenteeism but now with
advancement of behavioural science, some psychological methods have also proved
to be very useful which is known as human relations approach.
5. Women workers: Employment of women in industrial establishments is common
in almost all countries-developed and developing. India is no exception. Special
provisions of labour law exist to deal with the special problems of women workers
employed in factories, mines, plantations and other industrial establishments.
Women constitute a significant part of the work force in India. According to 2001
census, the total number of women in the country was 494.82 million out of the total
population of 1,025.25 million. This means women accounted for 48.26 per cent of the
total population. Employment of women in the organized sector (both public and
private as on 31 March 2006 was 5.12 million which constituted 19 per cent of the total
organized sector employment in the country).20
According to 2001 census, out of 127.73 million cultivators, only 41.89 million
constituted female cultivators. Out of the agricultural labourers of 106.77 million
in the same year, women agricultural labourers constituted 49.44 million. In case of
agricultural labourers, there is parity between men and women. 21
Table 2.3: Demographic Profile of Indian Workman
Year Total/Rural/Urban Persons Males Females
1 2 3 4 5
1971 Total 34.17 52.75 14.22
Rural 35.33 53.78 15.92
Urban 29.61 48.88 7.18
1981 Total 36.70 52.62 19.67
Rural 38.79 53.77 23.06
Urban 29.99 49.06 8.31
1991 Total 37.68 51.56 22.73
Rural 40.24 52.50 27.20
Urban 30.44 48.95 9.74

18 Mathur and Mathur, Trade Union Movement of India (1962}, 82.

19 Government of India, Ministry of Labour Year Book 2007 (2009).
20 Government oflndia, Indian Labour Year Book, 2008 (2010} 2.
21 Government of India, Indian Labour Year Book, 2007 (2009} 10.
 Industrial Relations: An Overview • 25

Year Total/Rural/Urban Persons Males Females

1 2 3 4 5
2001 Total 39.10 51.70 25.60
Rural 41.70 52.10 30.80
Urban 32.30 50.60 11.90

Source: Govt. of India, Indian Labour Year Book 2007 (2009) p 10

The employment of women workers in modern industrial system has given rise to
several problems. First, a set of major social evils involved in the employment of women is
widespread disorganization of family life. The lack of domestic care of the development of
a child's personality may continue even in his adult life. The increasing number of juvenile
delinquents, stillborn children, abortions, morbidity of women, abnormal pregnancies and
premature births are clear reflections of employment of women. 22 'Second, the economic
problem involved in industrial employment of women is in no way less significant. The
inadequacy of family income and the desire to supplement the meagre family income23
compels women workers to work in industry. But employment in such an establishment
does not provide them adequate wages. They are generally placed either in lower jobs or
in traditional jobs which carry lower salaries and are not generally given higher posts.
Third, 'equal pay for equal work' for both men and women has not been fully implemented
and despite legislation, there is disparity of pay between men and women. Fourth, the
employment of women in industry creates a variety of other problems such as hours of work
(particularly during night), overtime, health, safety, welfare and maternity leave. Fifth, the
legal protection afforded to women workers is also inadequate and involves problems of
inadequate inspecting staff. Sixth, working women face the problem of sexual harassment
for which norms have been laid down by the Supreme Court for prevention and regulation.24
6. Child labour: Another major problem of industrial relations is that of child labour. It
is a common and serious problem for the country. It ultimately affects the personality
and creativity of children. Data regarding the extent of employment of child labour are
inadequate. According to the 2001 census, the estimated figure of working children
was 12.6 million. 25 This figure rose to 17.02 million according to the estimates of the
43 rd National Sample Survey conducted in 1987-88. However, the incidence of child
labour in India has declined from around 5 per cent in 1993-94 is approximately
3 per cent in 2004-05.26
The evil of employment of children in agricultural and industrial sectors in India is a
product of economic, social and, among others, inadequate legislative measures. Social
evils involved in the employment of children are widespread illiteracy resulting in lack
of development of child's personality which may continue even in his adult life and
negligence and indifference of the society towards the question of child labour .27 There

22 Mathur and Mathur, Op cit. 72.

23 Ibid.
24 See chapter 3 section IV infra.
25 Government of India, Ministry of Labour, Indian Labour Year Book 2007 (2009) 4.
26 Government of India, Ministry of Labour & Employment, Annual Report to the People on
Employment (2010) 21.
27 See Child Labour in India (Ed. M K Pandia), 1979, 54.
26 • Industrial Relations and Labour Laws

is also lack of proper appreciation on the part of parents as to how continuance of child
education would benefit his employment prospects and improve the standard of living.28
The economic problems involved in the employment of children are in no way less
significant. Poverty resulting in inadequate family income and the desire to supplement
it compels children to work. Indeed, the parents of low income groups like artisans
cannot afford to educate their wards even if education is free. For them, an uneducated
child is an asset; desire to be educated becomes a double liability because of: (a) loss of
earning if the child does not work; and (b) expenditure on education, howsoever, small.29
Thus, the economic evils have not only deprived children at work from education but
also led to high infant mortality, morbidity and malnutrition, particularly in weaker
sections of the society in urban areas. The indifference of legislators to provide adequate
legislation to regulate employment of children has failed to minimize the growth of child
labour. The socio-legal problems involved in the employment of children in agriculture
and industries are: (a) is it feasible to abolish child labour particularly of those: (z) who
are orphans, destitutes, neglected, and abandoned children; (iz) children who have to
work for livelihood; (iii) children belonging to migrant families; and (iv) handicapped
children? If not, what should be done mediately and immediately (b) Should child
labour be banned in hazardous employment? If so, what are the alternatives? (c) What
should be the minimum age for different kinds of employment? (d) What should be
the duration of their work including rest interval? Is it desirable to adjust the working
hours in such a manner as to provide for schooling of children? (e) What privileges
should be afforded to them in matters of leave and holidays? (f) What protection should
be afforded to them in matters of health, safety and welfare?
The legislature has met the first problem by providing certain minimum standards of
age, physical fitness 30 and sometimes educational attainments. The second problem has also
been dealt with by the legislature by prohibiting employment in certain establishments or part
of establishments. 31 The third problem has been met by prohibiting employment of women
and children in certain dangerous work. 32 The rest of the problems have been met by the
legislature by imposing various restrictions on the conditions of work such as limited hours
of work, provisions for holidays, rest intervals, leave, health, safety and welfare amenities.
India has been following a proactive policy in the matter of tackling the problem of
child labour by undertaking constitutional, statutory and developmental measures that are
required for its elimination. The recently enacted Right of Children to Free and Compulsory
Education Act, which came into effect from 1 April, 2011 is a major initiative taken by the
government in this direction. Steps have been initiated to realign National Child Labour
Policy with the provisions of the Right to Education Act. Under the National Child Labour
Policy, 100 National Child Labour Projects (NCLPs) are in operation for rehabilitation of
about 2.11 lakh working children. A major activity undertaken under the NCLP is the
establishment of special schools to provide non-formal education,33 vocational training,
supplementary nutrition, stipend, health care, etc., to children withdrawn from employment.
So far, 1.87 lakh children from special schools of NCLPs have been mainstreamed into

28 Child Labour in India (Ed. M K Pandia) 1979, 54.

29 See Government oflndia, Report of the National Commission on Labour, 1969, 386.
°
3 Child Labour (Regulation and Abolition) Act, 1986.
31 See for instance the Factories Act, 1948, Mines Act, 1952, Plantation Workers Act, 1951.
32 Ibid.
33 Govt. of India, Ministry of Labour, Annual Report 2003-2004, (2004) 3.
 Industrial Relations: An Overview • 2 7

formal education system. The target is to eliminate child labour in a sequential manner,
beginning with its elimination from hazardous occupations through a determined move
towards its complete elimination from other occupations. Besides, a large number of NGOs
are working for elimination of child labour under the grant-in-aid scheme. 34
Apart from continuing the existing 100 NCLPs during the Tenth Plan, government
has apfroved setting up of additional 150 NCLPs in child labour endemic districts during
the 10t Plan. The expanded scheme in additional 50 districts has already been launched in
January, 2004 and states have been asked to set up NCLPs in these identified 50 districts. In
the remaining 100 districts, the scheme would be launched after additional 100 districts are
identified on the basis of the 2001 census report which is in process. Government has also
launched the INDOUS (INDUS) Child Labour Project on 16 February 2004 during the visit of
Mr Arnold Levine, Deputy Undersecretary, US DeparbnentofLabour and Mr Kari Tapiola,
Executive Director, International Labour Organization to India. 35

Industrial relations deal with the relationship between labour and management, and their
organization. The concept of 'industrial relations' is very broad and includes in its fold
all the relationships in modern industrial society which arise out of employee-employer
exchanges and also the role of the state in these relations. Explaining the concept of industrial
relations, RA Lester observed:
It involves attempt to workable solutions between conflicting objectives and values-
between incentive and economic security, between discipline and industrial democracy,
between authority and freedom and between bargaining and cooperation.
According to the Encyclopedia Britannica, 'the concept of industrial relations has been
extended to denote the relations of the state with employers, workers and their organizations'.
The International Labour Organization (ILO), while dealing with industrial relations,
states that they deal with either the relationship between the State and employers and
workers' organization or between the occupational organizations themselves.
The significance of industrial relations is aptly described by the (First) National
Commission on Labour (1969) as follows:
A quest for industrial harmony is indispensable when a country plans to make
economic progress. Economic progress is bound up with industrial harmony for the
simple reason that industrial harmony leads to more cooperation between employers
and employees which results in more productivity and thereby contributes to all-round
prosperity of the country. Healthy industrial relations on which industrial harmony
depends cannot, therefore, be regarded as a matter in which employers and employees
are concerned. It is of vital significance for the community as a whole.
The scope of industrial relations varies from time to time and place to place. According
to Professor Richardson, the scope of industrial relations includes: 'How people get on
together at their work, what difficulties arise between them, how their relations including
wages and working conditions are regulated, and what organizations are set up for the
protection of different interests.'

34 Ibid.
35 Govt. of India, Ministry of Labour, Annual Report 2003-2004, (2004) 3.
28 • Industrial Relations and Labour Laws

Industrial relations are basically a problem of human relations, and are influenced, if not
conditioned, by all the complex circumstances that affect the latter. While the apparent
causes of good or bad labour management relations may not be difficult to classify,
the real causes underlying outward and visible signs, over which there is seldom any
unanimity, have their roots in historical, political, socio-economic factors and depend
upon attitudes of workers and employers. Many times, work-stoppages which can be
apparently ascribed to some simple demand, namely, economic or personnel, are found,
on a deeper examination, to have complex roots in the social and cultural attitudes of
the worker involved. At times, though strikes take place because of certain economic
demands, harmonious relations are not necessarily restored even after the monetary
benefits demanded are granted to workers. On the contrary, it is also possible that even
without the apparent demand being satisfied or conceded, good relations are restored
once the deeper cause, be it political, social or economic is properly tackled. A change in
the leadership in the workers' union or a change in the management may radically alter
the basic relationship between the management and the workers. As such, a particular
state of industrial relations cannot be viewed in isolation from the political, social and
economic characteristics obtaining therein nor the remedies to correct certain situations
developed without giving due consideration to such factors. 36

It is difficult to precisely lay down the objectives of industrial relations. However, various
authors on the subject attempted to highlight the main objectives of industrial relations.
Nair and Nair citing Kirkaldy (1947), state that there are four objectives for industrial
relations:
(i) To improve economic conditions of workers;
(iz) For state control on industries for regulating production and promoting harmonious
industrial relations;
(iii) For socialization or rationalization of industries by making state itself a major employer;
(iv) For vesting of the proprietary interest of the workers in the industries in which they
are employed.
The objectives of industrial relations require examinations of following key features:
(i) Employer to individual employee relationships: This relates to management's policies
and practices that ultimately affect the productivity and well-being of their employees
as individuals. With a view to optimizing the interests of the employer and those
of employees, necessary steps need be taken which may cover wages and salary
administration, career prospects inclusive of planning and promotion, retirement and
medical benefits, discipline and redressal of grievances, training and development,
counselling, workers' compensation and other related issues such as insurance.

36 Government of India, Report of the First Study Group of Industrial Relations in Eastern India, National
Commission on Labour (1968).
 Industrial Relations: An Overview • 2 9

(iz) Management relations with trade union or group of workers: It covers rights and
practices, regulated by law or legal machinery. It relates to:
(a) Collective agreements
(b) Settlement of industrial disputes
(c) Management's rights
(d) Formation and recognition of unions as representative body of workers
Another focus of labour management relations are health, safety and welfare of
workers.
(iii) Industrial peace and productivity: One of the most important object of industrial
relations is to maintain industrial peace and harmony and, thereby, increase
productivity. It depends on the quality of union-management relations at workplaces.

In the sphere of industrial relations, the state cannot remain a silent spectator. It has to play
a persuasive and sometimes coercive role in regulating industrial relations in so far as they
concern collective bargaining and the consequent direct action which either party may
resort to for the realization of its claims. The state's anxiety about work stoppages arises
because of two factors: (i) the impact on the community by way of inconveniences inflicted
by interruption in supply of essential goods/services; and (ii) social cost to the parties
themselves in the form of loss of wages/ production. It has, therefore, a special interest in the
methods chosen by the parties for regulation of their mutual relations. For instance, adoption
of collective bargaining will require well-organized unions and employers' associations.
The state, when it moves towards this goal, takes upon itself the task of formulating rules
for maintenance of discipline, social justice, labour welfare and peace and harmony. It may
intervene through conciliation process or compulsory adjudications. In the process, it will
have to define permissible area of intervention.
As a corollary to its role in maintaining peace, the state has provided for conciliation
and adjudication machinery to settle industrial disputes under the Industrial Disputes Act,
1947. This can be best performed either by creating conditions in which adjudication would
succeed in preference to strife or by compelling the parties to accept direct intervention of
the state in public interest. In either case, better results are achieved where the existence of
the third party is not overtly felt.
Quite apart from the above roles played by the state, there are others which have a
special significance in our context. The first is that of the state as an employer, which has
two aspects, i.e., direct employment of labour by the state and employment in industrial
corporations constituted by the state. Handling of industrial relations in the case of its own
employees, to whom all legislation framed for industry is applicable, falls in this category.
This function of the state as an employer has been there over a very long period; it has been
there even prior to Independence. To this was added another when, as a matter of policy, it
was decided to operate a mixed economy wherein industries were to be run by both private
entrepreneurs and the state. The role of the state in these matters has been watched with
great interest in recent years. The policy statements in this regard show that as an employer,
the state binds itself to the rules which it frames for private employers. Where standards of
good employment are disparate, the state seeks to set standards with a view to influencing
employers in the private sector. While this is the policy, in practice, it so happens that there
30 • Industrial Relations and Labour Laws

is a fair amount of interaction between what the employers do for their employees in the
two sectors. And this interaction is influenced by the new consciousness among the workers
and ease of communication within the working class.

Globalization, liberalization and privatization have brought new market imperatives. The
traditional industrialization system is under unprecedented pressure because it is unable
to meet this situation. It is felt that a market determined industrial relations may meet the
challenges of the market. Some of the key features are given below:
(i) The institution of trade union is becoming weaker. Employers, despite the provisions
of unfair labour practice under the Industrial Disputes Act, 1947, are discouraging
the formation of unions and promoting non-unionism. In IT, SEZ and several private
industries, there are hardly any trade unions.
(iz) The institution of collective bargaining is being decentralized and replaced by
unit bargaining, individual bargaining, commercial bargaining and collaborative
bargaining.
(iii) Disinvesbnent/privatization and VRS are almost accepted facts of industrial relations.
(iv) Changing pattern of compensation/rewards management-fixed/assured time rate
wages are replaced by variable/performance-based wages.
(v) Social security and employment guarantee schemes are being provided for
unorganized/agricultural workers.
(vz) Pro-labour attitude of government is being diluted. This is evident from the shift in
government's attitude of non-interference and liberally granting permission to lay-off,
retrench or close the undertaking under Chapter V-B.
(vii) The establishment of' special economic zones' is another area which shows the attitude
of the government towards emerging business scenario.
(viii)The attitude of judiciary is also changing. The recent judgements of the Supreme
Court on contract labour, discipline and disciplinary action, absenteeism and strikes
show that it looks at the problem from the viewpoint of economic reforms and global
competition.

1. The first casualty of globalization is the number of workers employed. Due to global
competition, most industries want to reduce costs and be competitive. They have
introduced plans like Voluntary Retirement Scheme (VRS) as well as retrenchment
and closures both in the organized and the unorganized sectors. For instance,
nationalized banks have introduced VRS for their staff and so far, about 99,000
workers have opted for retirement under this scheme. Some employers are offering
lower wages to the workforce as a condition for the reopening of closed industries.
Faced with the problems of unemployment, workmen are frequently accepting such
offers.
 Industrial Relations: An Overview • 31

2. Under the WTO regime, labour economic policies seem to be resulting in the closure
or disappearance of many Indian companies, especially, those engaged in consumer
goods.
3. The attitude of the government, particularly of the Central Government, towards
workers and employers seems to have undergone a change. Now, permissions for
closure or retrenchment are more easily granted.
4. The closure of industrial units and cases of bankruptcy are normal features in
developing countries all over the world (including India). With their limited resources,
they are unable to provide alternative employment opportunities. Industrial sickness
and its resultant consequences have to be handled carefully to see that its adverse
impacts falls least on workers and on society.
5. The major issue that emerges is how the industrial units which are sick or closed
under liquidation, or due to world wide economic crisis need to be dealt with in India,
particularly the displaced workers and locked assets of these units.

Immediately after India became a Sovereign Democratic Republic, the concept of planned
economic development through planning was accepted and the Planning Commission
was set up in March 1950. The advent of the era of planning brought in its wake a set of
new problems as well as popular expectation. 37 Eleven plans have been completed and
the eleventh is continuing. The 11 successive plans laid down certain basic concepts and
principles regarding: (i) workers' right of association and organization (ii) the machinery
and procedure for settlement of disputes and (iii) the implementation of awards and
agreements. The plans have had two distinctive objectives in regard to industrial relations:
(z) the avoidance of industrial disputes and creation of machinery for settlement of industrial
disputes and (ii) the creation of necessary abnosphere for the development of labour
management co-operation and harmonious relations through the adoption of suitable
institutional frame-work. 38
The First Five-Year Plan (1951-52-1955-56) paid considerable attention to labour
problems including strikes and lockouts, as well as popular expectation of the working
class. The Plan recognized workers' right to strike and observed:

In an economy organized on the basis of competition, private monopoly or

private profits, the workers' right to have recourse to peaceful direct action
for the defence of their rights and the improvement of their conditions cannot
be denied and should not be curtailed unduly. 39
But, in any emergency and in the case of services essential to the safety and well-being of the
community, recourse to a strike or lockout may be suspended or withheld on the condition
that in all such cases, provision is made for just settlement of the parties' claim.40

37 Government oflndia, Report of the Committee on Labour Welfare, (1969), 15.

38 Government oflndia, Report of the Study Group on Industrial Relations (Northern Region), (1968), 15.
39 Government oflndia, First Five-Year Plan 1951, 570, 572-573.
40 Ibid.
32 • Industrial Relations and Labour Laws

Reiterating the aforesaid line of thinking, the planners observed:

Experience of many years have demonstrated that in majority of labour
struggles, owing to ignorance and mistakes of the workers and their
organizational and bargaining weaknesses, they have failed to gain their ends
irrespective of the merits of the disputes. 41
While accepting the wisdom of holding the balance fairly between capital and labour,
the planners conceded that the employer usually possesses superior strength which may
become a source of injustice and oppression unless he is imbibed with high sense of fairness
and uses his advantage with scrupulous regard to the rights and interests of others. It,
accordingly, pleaded for intervention to strike the balance:
The community has, therefore, to intervene for redressing the balance in
favour of the weaker party to assure just treabnent for all concerned. Legal
provisions relating to trade unions and industrial disputes have to be framed
and interpreted in relation of these objectives.42
The Second Five-Year Plan envisaged a marked shift in industrial relations policy
consequent on the acceptance of the socialistic pattern of society and the goal of planning.
The plan stated that greater stress should be laid on the creation of industrial democracy in
which a worker should realize that he is a part and parcel of the industrial apparatus that is
to usher in socialistic pattern of society. The planners emphasized mutual negotiations as
an effective mode of settling industrial disputes. Among the other recommendations in the
plan were demarcation of functions between works committee and increased association
of labour unions with management and provision for recognition of trade unions. Keeping
in mind the desirability of having one union to one industry, the plan also suggested that
the number of outsiders who could serve as union office-bearers be further restricted. Thus,
the plan pleaded for maintenance of industrial peace by preventing strikes and lockouts.
The Third Five-Year Plan did not suggest any major change in policy. It placed
emphasis on collective bargaining and on mutual agreements for industrial relations as well
as workers' well-being. It also emphasized the economic and social aspects of industrial
peace and elaborated the concept that workers and management were partners in a joint
endeavour to achieve common ends. The voluntary arrangement agreed to in Second Plan
was strengthened by the Industrial Truce Resolution, 1962.
The Fourth Five-Year Plan also stressed on the need for more effective implementation
of labour administration for better enforcement of labour laws.
The Fifth Five-Year Plan highlighted that inadequacies of management and bad
industrial relations are among the most important factors for delay and inefficiency in
implementation of projects and for under-utilization of capacity. It accordingly pleaded:
It is imperative to bring about a marked improvement in the operational
efficiency of the public sector as also of the private sector.
Important suggestions given in the Fifth Plan are as follows:
Some unification of the trade union movement is necessary even for smooth
functioning of modern capitalist society, let alone for building a socialist

41 First Five-Year Plan (1951).

42 Ibid.
 Industrial Relations: An Overview • 3 3

society. Only through this way can industrial relations be put on an orderly
basis, through collective bargaining and other devices.
Among the other suggestions of the Fifth Five-Year Plan were professionalization of
management and active association of the working class.
The Sixth Five-Year Plan did not introduce any major change in the industrial relations
policy. However, there are two aspects which received the planners' attention. First, it
stressed the need for simplification of procedure for settlement of industrial disputes in
order to ensure 'quick justice' to workers and a feeling of certainty among employers. Second,
it emphasized the need for increasing the number of existing labour courts and tribunals
for speedy settlement of industrial disputes. However, the nature and design of the new
machinery has not been spelt out. Realizing the importance of the system of industrial
relations machinery, the Sixth Plan pleaded that the industrial relations machinery should
be strengthened both in Centre and states for anticipating labour problems and taking
preventive measure to avert work-stoppages. 43
The Seventh Five-Year Plan laid considerable emphasis on measures designed to
improve labour management relations without which the realization of developmental
objectives of the plan would be difficult. Viewed from this perspective, increases in industrial
production and productivity are attainable only in an abnosphere free from industrial
conflicts of any kind. 44 For this discipline and motivation for work, harmonious industrial
relations, participation of workers and healthy working climate are sine quo non. The plan
highlighted the need for creating harmonious industrial relations by adopting several
measures such as: (i) there should be proper management of industrial relations; (ii) there
should be identification of responsibilities of the unions and the employers; and (iii) inter-
union and intra-union rivalries should be avoided. Further, the plan suggested that some
policy for tackling industrial sickness in future has to be evolved while protecting the interest
of labour. Moreover, the plan laid emphasis on upgradation of technology, modernization
of equipment, better utilization of assets and promotion of efficiency.45
The Eighth Five-Year Plan paid considerable attention to the working conditions,
welfare and social security measures and enforcement of labour laws for unorganized labour,
women and child labour. The plan stated that emphasis should be laid 'on skill formation
and development, strengthening and modernization of employment, service, promotion of
industrial and mines safety, workers' education, promotion of self-employment, enforcement
of labour laws, promotion of a healthy industrial relations situation and encouragement of
workers' participation in management.'46
The Ninth Five-Year Plan stressed on the need to create conditions for improvement
of labour productivity and provisions for social security to supplement the operation of the
labour market. The resources would be directed through plan programmes towards skill
formation and development, exchange of information on job opportunities, monitoring of
working conditions, creation of industrial harmony through an infrastructure for healthy
industrial relations and insurance against disease and unemployment for the workers and
their families. The plan envisages that the trade unions will contribute to promoting changes
in the work culture.

43 BR Patil, 'Labour Relations-A Need Based System', Economic Times, September 26, 1981, 5.
44 Government of India, Annual Report 1985-86 (1986), 8.
45 Government oflndia, Seventh Five-Year Plan 1985-90, (Vol. 20) (1985), 119.
46 Government oflndia, Eighth Five-Year Plan 1992-97, (Vol. 27) (1992), 154.
34 • Industrial Relations and Labour Laws

The plan also stated that action will be taken to: (a) identify the laws which are no
longer needed and repeal them; (b) identify the laws which are in harmony with the concept
of economic liberalization and need no change; (c) amend the laws which require change;
and (d) revise the rules, regulations, orders and notifications. Further under the plan,
efforts would be made to extend the coverage of the National Social Assistance Programme
comprising old age pension, maternity benefit and family benefit for girl child, casual and
self-employed workers and informal sector both in rural and urban areas. 47
In the Tenth Five Year plan (2002-2007), the salient feature of the labour deparbnent was to
ensure payment of minimum wages to the workers engaged in agricultural and unorganized
sectors. The labour deparbnent also proposed to play a major role in improving industrial
peace and harmony among the working class and to maintain harmonious relation between
the employer and the employee. The working condition and safety of the workers engaged
in the organized sector of the economy is looked after by the Directorate of Factories. The
changing scenario of globalization involves greater emphasis on strengthening of conciliation
and adjudication machinery to cope with the increasing numbers of industrial disputes. The
conciliation machinery of the deparbnent is conscious of its challenging role in resolving
labour disputes. Some of the measures taken by the deparbnent are as under:
(1) Effective enforcement of the Minimum Wages Act, Contract Labour (Regulation and
Abolition) Act, Child Labour (Regulation and Prohibition) Act and Equal Remuneration
Act which were specially designed to protect unorganized workers and women;
(2) Rehabilitation of migrant, orphan and homeless labour and child labour in core carpet
zones;
(3) Identification and rehabilitation of bonded labour;
(4) Setting up of a Centre for Productivity and Industrial Management in UP;
(5) Setting up of legal cells at regional offices at Allahabad, Lucknow and Ghaziabad;
(6) Creating awareness amongst the workers and involving them in fruitful occupation;
(7) Greater emphasis on safer working conditions of industrial workers and strengthening
of Boiler Directorate;
(8) Creation of labour court and industrial tribunal;
(9) Establishment of Fast Track Court and
(10) Labour statistics, training and establishment of data bank.
The Eleventh Five Year Plan (2007-2012), emphasized the need to supplement employment
generating sector such as medium and small industries and services by targeted livelihood
support programmes aimed at increasing production and income of the poor in several
low-income occupations. The plan laid emphasis on generating adequate number of
productive employment opportunities. The planners asserted that rapid growth focussed
on labour-intensive industries and small and medium enterprises will create employment
opportunities in manufacturing and service sector. The ability to create jobs will be
enhanced by greater labour flexibility which may require some change in labour. While
they conceded that 'hire and fire' approach may not be desirable but felt that there is a
need to create greater flexibility. While dealing with skill development, the Eleventh Plan
reiterated that specific programme for development of skills at all levels will form part
of the plan.

47 Government oflndia, Ninth Five-Year Plan 1997-2002, (Vol. 2), 390,392 and 397.
 Industrial Relations: An Overview • 35

While dealing with welfare provisions, the plan stated that while in the shortrun, access
to basic facilities such as health, education, clean drinking water, etc., would be provided
but in the long run, stress would be laid on the welfare of workers.
The planners emphasized that the broad vision of the Eleventh Plan would be rapid
growth that reduces poverty and creates employment opportunities, recognition of women's
agency, good governances, access to essential services in health and education specially
for poor; equality of opportunities, empowerment through education, skill development,
employment opportunities under the Mahabna Gandhi National Rural Employment
Guarantee Act and environment sustainability.

Approaches to the Twelfth Five-Year Plan (2012-2017)

As the country moves to adopt the 12th Five-Year Plan, macro-economic balance with
environmental sustainability, water and energy management along with urbanization among
others, are the key challenges before the government. The approach paper suggests that
the main focus will be on inclusive growth. The Plan is expected to encourage agriculture,
education, health and social welfare. It is also expected to create employment through
developing India's manufacturing sector.
Constitutional
Framework on
Industrial Relations 3
A. The Preamble
The people of India resolved on 26 November, 19491, to constitute their country into a
Sovereign, Socialist, Secular Democratic2 Republic and to secure to all its citizens :
Justice; social, economic and political;
Liberty of thought, expression, belief, faith and worship;
Equality of status and opportunity and to promote among them all;
Fraternity assuring the dignity of the individual and the unity and integrity of the
Nation.

B. Directive Principles of State Policy

The Preamble has been amplified and elaborated in the Constitution, particularly in 'Directive
Principles of State Policy'. The State has been directed to promote the welfare of the people
by securing and protecting as effectively as it may, a social order in which justice, social,
economic and political shall inform all institutions of national life.3 Further, the state has
been directed to secure, inter alia, (a) adequate means of livelihood;4 (b) proper distribution
of ownership and control of the material resources of the community so that it may subserve
the common need;5 (c) prevention of the concentration of wealth and means of production;
(d) equal pay for equal work for men and women;6 (e) the health and strength of workers;7

1 Inserted by the Constitution (42nd Amendment) Act 1976, Section 2.

2 The Preamble of the Indian Constitution.
3 Article 38.
4 Article 39 (a).
5 Article 39 (b ).
6 Article 39 (d).
7 Article 39 (c).
38 • Industrial Relations and Labour Laws

(f) right to work, to education and to public assistance in cases of undeserved want;8 (g)
just and humane conditions of work and for maternity relief;9 (h) living wage and decent
standard oflife oflabourers;10 (z) participation of workers in the management ofundertakings
or industrial establishments by suitable legislation or otherwise 11 and (J) higher level of
nutrition and standard of living and improving public health. 12 These provisions spell out
the socio-economic objectives of the national policy to be realized by legislation. These are
the directives13 to the legislature and executive organs of the State which are committed to
make, interpret and enforce law.

C. Constitutional Guarantee
The labour policy is, however, not unqualified. It is subject to various limitations. The Indian
Constitution imposes an express limitation on it. Labour legislation, therefore, should not
be inconsistent with or in derogation of the fundamental rights. It is to the extent of such
inconsistency void. 14 Further, the rights are enforceable by the courts under Articles 32 and
226 15 and cannot be denied in case of violation of fundamental rights. 16
Fundamental rights are enumerated in Part III of the Constitution. The whole object
of Part III is to provide protection for the freedom and rights mentioned therein against
arbitrary action by the State. 17 Of particular relevance is Article 14 which provides that
'the State shall not deny to any person equality before the law or equal protection of the
laws within the territory of India'. 18 In addition to this, Article 16 guarantees equality of
opportunity in matters of public employment. Further Article 19, inter alia, guarantees 'the
right to freedom of speech and expression,' 19 to assemble peacefully and without arms;2°
to form associations or unions,21to acquire, hold and dispose of pro~erty22 and to practise
any profession, or to carry on any occupations, trade or business. 3These constitutional
guarantees are of great practical significance in the area of labour management relations.
Equal protection constitutes a limitation on the legislative power to select or decide
which business or industry must achieve minimial standards. The right to carry on trade,
profession or business limits the burden which the legislation may place on business in the
interest of workers. The freedom of speech, assembly, association and unionization protect

8 Article 41.
9 Article 42.
10 Article 43.
11 Article 43A (42nd Amendment Act), 1976.
12 Article 47.
13 See Part IV of the Constitution.
14 Article 13.
15 Article 32 guarantees the right to move the Supreme Court for appropriate relief by writs. In addition
to this, Article 226 empowers the High Courts to issue appropriate writs for enforcement of the
provisions of Part III of the Constitution.
16 State of Bombay v. United Motors, (1953) SCJ 373.
17 Ibid.
18 State of West Bengal v. Sobodh Gopal, AIR 1964 SC 587.
19 Article 19 (1) (a).
20 Article 19 (1) (b).
21 Article 19 (1) (c).
22 Article 19 (1) (f).
23 Article 19 (1) (g).
 Constitutional Framework on Industrial Relations • 39

workers in their efforts to achieve their objectives through self organizing, picketing or
striking.
Article 21 provides protection of life and personal liberty. It provides that no person
shall be deprived of his life or personal liberty except according to procedure established
by law. Article 23 prohibits traffic in human beings and forced labour. It says (i) Traffic in
human beings and begar and other similar forms of forced labour are prohibited and any
contravention of this provision shall be an offence punishable in accordance with law.
Life, in Article 21, has been interpreted by the Supreme Court as including livelihood and
the Court has held in several cases that any employment below minimum wage levels is
impremissible as it amounts to forced labour as understood in Article 23. Holding a person
in bondage is a constitutional crime. Article 24 places a ban on employment below the age
of 14 in any factory, mine or in any other hazardous employment.
A survey of decided cases reveals that the vires of the Industrial Disputes Act, 1947 has
been challenged time and again on the ground of infringement of fundamental rights guaranteed
under Articles 14 and 19 before the high courts and the Supreme Court. In Niemla Textile
Finishing Mills Ltd v. Industrial Tribunal, Punjall-4, the Supreme Court observed that neither the
Industrial Disputes Act nor any provision thereof is void as infringing the fundamental rights
guaranteed by Article 14 or 19. Thus, it has now been settled that the provisions of Industrial
Disputes Act are not violative of the fundamental rights guaranteed under the Constitution.

D. Distribution of Law-making Power

Distribution of power imposes another limitation on the overriding labour policy. It will be
observed that the power to make laws for the whole or any part of the territory of India 25
is vested in the Parliament.26 This power extends only to such subjects of legislations as are
enwnerated in Union List27 and Concurrent List28 of the Seventh Schedule of the Constitution.
Further, the Parliament has been empowered to make laws on any of the matters of the
State List under the following conditions. First, if the Council of States declares by resolution
supported by not less than two-third of the members present and voting that it is necessary
or expedient in the national interest that the Parliament should make laws in respect to
any matter enumerated in the State List specified in the resolution, it shall be lawful for
the Parliament to make laws on such matters. The resolution will remain in force for the
period of one year unless relaxed. 29Second, the Parliament is empowered to legislate on any
matter enumerated in the State List while proclamation of emergency is in operation. 30 Third,
the Parliament is empowered to legislate for two or more states by their consent. Such a
legislation shall apply to such states and any other state by which it is ador,ted afterwards
by resolution passed in this behalf by each of the houses of state legislature. 3 The Parliament

24 (1957) 1 LLJ 460 (SC).

25 Article 245 (2).
26 Article 245 (1).
27 Union List contains 97 items of legislation, e.g., Defence, Foreign Affairs, Railways, Airways, Post
and Telegraph, Currency Coinage and Legal Tender, Trade and Commerce with other countries,
Banking, Insurance, Income tax, Duties of Customs including Export Duty.
28 Concurrent List contains 47 items of legislation.
29 Article 249.
30 Article 250.
31 Article 252.
40 • Industrial Relations and Labour Laws

has also been given power to legislate on such matters as are not enumerated in the Seventh
Schedule. 32 Quite apart from this, fundamental rights33 and freedom of inter-state trade and
commerce 34 impose express limitation on the legislative power.
The power to make laws for the whole or any part of the state is vested in the state
legislature, which may make laws on such subjects as are enumerated in the State List'5
and Concurrent List of the Seventh Schedule of the Constitution. But, where laws made
by the state legislature on matters enumerated in the Concurrent List are inconsistent
with a central act on the same matter, the state laws will be inoperative to the extent of
inconsistency. 36There is, however, one exception to it, namely, if a law made by the state
legislature is inconsistent with the Union law, state law will prevail over the Union law,
if the same has been referred for the consideration of the President and it has received his
assent. 37 State legislations too are subject to limitations like those imposed by fundamental
rights and freedom of inter-state trade and commerce.
The main topics directly affecting labour relations are included in each of the following
lists:
Union List: List I
Item 13: Participation in international conferences, associations and other bodies
and implementation of decisions made there at
Item 55: Regulation of labour and safety in mines and oilfields
Item 61: Industrial disputes concerning union employees
Item 94: Inquiries, surveys and statistics for the purposes of any of the matters in
the list
Concurrent List: List III
Item 20: Economic and social planning
Item 22: Trade unions; industrial and labour disputes
Item 23: Social security and social insurance; employment and unemployment
Item 24: Welfare of labour including conditions of work, provident fund, employers'
liability, workmen's compensation, invalid and old age pensions and
maternity benefits
Item 25: Vocational and technical training of labour
Item 36: Factories
Item 37: Boilers
Item 45: Inquiries and statistics for the purposes of any of the matters specified in
List II or List III
State List: List II
Item 9: Relief for disabled and unemployable

32 Article 249.
33 Part III of the Constitution.
34 Part XIII of the Constitution.
35 State List contains 66 items of legislation.
36 Article 254 (1).
37 Article 254 (2).
 Constitutional Framework on Industrial Relations • 41

In addition to the aforesaid items, there are several other items. A perusal of the items
mentioned in the lists of the Seventh Schedule reveals that the Parliament has been vested
with wide powers in labour matters. However, it 'may sometimes happen that in the course of
making a law, one may incidentally touch upon subject assigned to the other. This incidental
encroachment, however, is not considered bad, for the reason that the entries in the lists have
to be widely construed and some amount of overlapping could not altogether be avoided.
If the legislation is in pith and substance on a matter assigned to one legislative body, an
incidental encroachment into the territory of the other could be considered permissible. Pith
and substance and incidental encroachment are the doctrines evolved by courts to ensure
that the federal machinery could function without serious friction.' 38
There 'is however, no provision in the Constitution which lays down that a Bill
which has been assented to by the President would be ineffective as an Act if there was no
compelling necessity for the Governor to reserve it for the assent of the President. There might
be a genuine doubt about the applicability of any of the provisions of the Constitution which
required the assent of the President to be given to it in order that it might be effective as an
Act. If the Governor in exercise of his discretion decided to reserve the Bill for consideration
of the President to avoid any future complication, that could not be put forward as a proof
of the existence of repugnancy between the Parliamentary enacbnent and the Bill which
had been reserved for the assent of the President.'39
The Supreme Court in a catena of cases40 laid down the following tests for repugnancy:
(i) whether there is direct conflict between the two propositions?
(ii) whether Parliament intended to lay down an exhaustive code in respect of the subject
matter replacing the Act of the State Legislature?, and
(iii) whether the law made by the Parliament and the law made by the state legislature
occupy the same field? 41

With a view to making right to free and compulsory education a fundamental right, the
Constitution (Eighty-third Amendment) Bill, 1997 was introduced in Parliament to insert a
new article, namely, Article 21A conferring on all children in the age group of 6 to 14 years
the rightto free and compulsory education. The said bill was scrutinized by the Parliamentary
Standing Committee on Human Resource Development and the subject was also dealt with
in its 165th Report by the Law Commission of India.
After taking into consideration the report of the Law Commission of India and the
recommendations of the Standing Committee of Parliament, the following amendments have
been made in the Constitution of India through Constitution (Eighty-sixth Amendment)

38 APSWL Co-operative Society Ltd v. Labour Court, 1987 Lab. LC 642 at 649 (SC).
39 Ibid.
40 Zaverbhai v. State of Bombay, AIR 1954 SC 752, Tike Ramji v. State of UP, AIR (1956) SC 676. Deep
Chand v. State of UP, AIR 1959 SC 648, Karunandh v. Union of India, AIR 1979 SC 878 and Hoechst
Pharmaceuticals v. State of Bihar, AIR 1983 SC 1019.
41 1987 Lab. LC 642.
42 • Industrial Relations and Labour Laws

Act, 2002 which received the assent of the President on 21 December 2002. The amended
act inserted new Article 21A: Right of Education in the Constitution which reads as under:
The State shall provide free and compulsory education to all children of the age of six
to fourteen years in such manner as the State may, by law, determine.
It also substituted Article 45 which provides:
The State shall endeavour to provide early childhood care and education for all children
until they complete the age of six years.
Quite apart from the above constitutional right, the Right of Children to Free and
Compulsory Education Act, 2009, which came into force with effect from 1 April 2011,
provides that every child in the age group of 6 to 14 years will be provided free and
compulsory education.

Indian judiciary has played significant role in the evolution of industrial jurisprudence. It has
not only made a distinct contribution to laws relating to industrial relations, social security
and minimum standards of employment but has innovated new methods and devised new
strategies for the purpose of providing access to justice to weaker sections of society who
are denied their basic rights and to whom freedom and liberty have no meaning. Indeed,
the court assumed the role of protectionist of the weaker by becoming the court for the poor
and struggling masses of the country. Further, the courts at times played a role of legislators
where law is silent or vague. Indeed, a number of legislation and legislative amendments
have been made in response to the call by the judiciary.
A creative role played by Indian judiciary for weaker sections of society is best depicted
in People's Union for Democratic Rights v. Union of India 42. In an epoch making judgement, the
Supreme Court has not only made a distinct contribution to labour law but has displayed
the creative role to protect the interests of weaker sections of society. Further, the Court has
given a new dimension to several areas such as minimum wages, employment of children,
enforcement of labour laws and public interest litigation. The Court has also enlarged the
contours of fundamental right to equality, life and liberty, prohibition of traffic in human
beings and forced labour and prohibition of employment of child labour provided in the
Constitution.
The case arose out of the denial of minimum wages to workmen engaged in various
Asiad projects and non-enforcement of the Minimum Wages Act, 1948, Equal Remuneration
Act, 1976, Employment of Children Act, 1938, Contract Labour (Regulation and Abolition),
Act, 1970 and the Inter-State Migrant Workmen (Regulation of Employment and Conditions
of Service) Act, 1979. However, the Court's attention was drawn not by the aggrieved workers
but by a public-spirited organization by means of a letter addressed to Justice Bhagwati of
the Supreme Court. The letter was based on a report made by three social scientists after
personal investigation and study.
For the purpose of analysis, the Court's decision may be considered under the following
heads:

42 (1982) 2 LLJ 454.

 Constitutional Framework on Industrial Relations • 43

Area of Conflict
The court was directly called upon to decide, inter alia, the following main issues:
(i) Is a writ petition under Article 32 of the Constitution maintainable for mere violation
of labour laws and not for breaches of any fundamental right?
(ii) What is the true scope and meaning of the expression 'traffic in human beings and
begar and other similar forms of forced labour' in Article 23 of the constitution?
(iii) Whether there was any violation of the Equal Remuneration Act, 1976, the Contract Labour
(Regulation and Abolition) Act, 1970, the Minimum Wages Act, 1948 and the Inter-State
Migrant Workmen (Regulation of Employment and Conditions of Service) Act 1979?
The Supreme Court through Justice Bhagwati answered all the aforesaid questions
in the affirmative.

Maintainability of the Writ Petition for Violation of Labour Legislation under

Article 32
As regards the first and third issues, the Court accepted the contention that the writ petition
under Article 32 of the Constitution could not be maintained unless there was a violation
of fundamental rights. Consequently, it examined whether there was any violation of
fundamental rights in this petition and observed:

The complaint of violation of Article 24 based on the averment that children

below the age of 14 years are employed in the construction work of the Asiad
projects is clearly a complaint of violation of a fundamental right. So also
when the petitioners allege non-observance of the provisions of the Equal
Remuneration Act, 1976, it is in effect and substance a complaint of breach of the
principle of equality before the law enshrined in Article 14 .... Then there is the
complaint of non-observance of provisions of the Contract Labour (Regulation
and Abolition) Act, 1970 and the Inter-State Migrant Workmen (Regulation
of Employment and Conditions of Service) Act, 1979 and this is also in our
opinion a complaint relating to violation of Article 21. 43

Now, the rights and benefits conferred on the workmen employed by a contractor
under the provisions of the Contract Labour (Regulation and Abolition) Act, 1970
and the Inter-State Migrant Workmen (Regulation of Employment and Conditions
of Service) Act, 1979 are clearly intended to ensure basic human dignity to the
workmen and if the workmen are deprived of any of these rights and benefits to
which they are entitled under the provisions of these two pieces of social welfare
legislation, that would clearly be a violation of Article 21 of the Constitution of
India. The Delhi Administration and Delhi Development Authority which, as
principal employers, are made statutorily responsible for securing such rights and
benefits to the workmen. That leaves for consideration the complaint in regard

43 See Hussainera Khatoona v. State of Bihar, (1978) I SCC 238; Sunil Batra v. Delhi Administration, (1978)
4 SCC 494: See also AIR 1980 SC 1979; Khatri v. State of Bihar, (1981) I SCC 635; S P Gupta v. Union
of India, AIR 1982 SC 149.
44 • Industrial Relations and Labour Laws

to non-payment of minimum wages to the workmen under the Minimum Wages

Act, 1948. We are of the view that this complaint is also one relating to breach of
a fundamental right... it is the fundamental right enshrined in Article 23 which is
violated by non-payment of the minimum wages to the workmen. 44

Prohibition of Traffic in Human Beings and Forced Labour

As regards the second issue, the court pointed out that Article 23 was 'designed to protect
the individual not only against the State but also against any other person indulging in any
such practice.' It imposes prohibition on traffic in human beings and begar and other similar
forms of forced labour. Explaining the scope of the expression 'traffic in human beings and
begar and other similar form of forced labour' the court observed:
What Article 23 prohibits is 'forced labour' that is labour or service which a person
is forced to provide and 'force' which would make such labour or service 'forced
labour' may arise in several ways. It may be physical force which may compel a
person to provide labour or service to another or it may be force exerted through a
legal provision such as a provision for imprisonment or fine in case the employee
fails to provide labour or service or it may even be compulsion arising from
hunger and poverty, want and destitution... The word 'force' must, therefore, be
construed to include not only physical or legal force but also force arising from
the compulsion of economic circumstances which leaves no choice or alternatives
to a person in want and compels him to provide labour or service even though
the remuneration received for it is less than the minimum wage.

The court added:

[W]here a person provides labour or service to another for remuneration which is

less than the minimum wage, the labour or service provided by him clearly falls
within the scope and ambit of the words 'forced labour' under Art. 23. Such a
person would be entitled to come to the Court for enforcement of his fundamental
right under Art. 23 by asking the Court to direct payment of the minimum wage
to him so that the labour or service provided by him ceases to be 'forced labour'
and the breach of Art. 23 is remedied. 45

Enforcement of Fundamental Rights

Before we proceed to discuss the third issue, it is necessary to examine the approach of the
courts towards the enforcement of fundamental rights. The Supreme Court observed that
there are certain fundamental rights conferred by the Constitution which are enforceable
against the whole world and they are to be found, inter alia in Articles 17, 23 and 24.46
Whenever a fundamental right in Articles 17, 20 or 24 which is enforceable against private
individuals is violated, it is the constitutional obligation of the State to take necessary steps

44 (1982) 2 LLJ 454.

45 (1982) 2 LLJ 454 at 464-65.
46 Id. at 470-71.
 Constitutional Framework on Industrial Relations • 45

for the purpose of interdicting such violation and ensuring observance of the fundamental
right by the private individual who is transgressing the same. Of course, the person whose
fundamental right is violated can always approach the court for its enforcement but that
cannot absolve the State from its constitutional obligation to see that there is no violation of
the fundamental right of such person, particularly when he belongs to the weaker sections
of community and is unable to wage a legal battle against a strong and powerful opponent
who is exploiting him.

Violation of Labour Law

As to the third issue, the Court pointed out that admittedly there were certain violations
committed by the contractors and for those violations, prosecution was launched against
them but remarked that no violation of any of the labour laws should be allowed to go
unpunished. The Union of India also conceded that fl per worker per day was deducted
by the jamadars from the wages payable to the workers with the result that the workers
did not get the minimum wage of ~-25 per day but stated that proceedings have been
taken for the purpose of recovering the amount of shortfall in the minimum wage from
the contractors. In view of this, the Court directed that whenever any construction work
is being carried out either deparbnentally or through contractors, the government or any
other governmental authority including a public sector corporation which is carrying out
such work, must take great care to see that the provisions of the labour laws are strictly
observed and they should not wait for any complaint to be received from the workmen in
regard to non-observance of any such provisions before proceeding to take action against the
erring officers or contractors. Instead, they should institute an effective system of periodic
inspections coupled with occasional surprise checks by the higher officers in order to ensure
that there are no violations of the provisions of labour laws and the workmen are not denied
the rights and benefits to which they are entitled and where such violations are found,
immediate action should be taken against defaulting officers or contractors. However, it
is unfortunate that these directives only remain on paper and do not appear to have been
followed in the Commonwealth Games.

The three-judge bench of the Supreme Court in an epoch-making judgement in Vishaka

v. Union of India 47 made a significant contribution by evolving the code against sexual
harassment. While emphasizing the need to have guidelines, the Supreme Court observed:

The primary responsibility for ensuring such safety and dignity through suitable
legislation, and the creation of a mechanism for its enforcement is of the legislature
and the executive. When, however, instances of sexual harassment resulting in
violation of fundamental rights of women workers under Articles 14, 19 and 21
are brought before us for redress under Article 32, an effective redressal requires
that some guidelines should be laid down for the protection of these rights to fill
the legislative vacuum.

47 1997 LLR 991 (SC).

46 • Industrial Relations and Labour Laws

Guidelines and Norms

The Supreme Court laid down the following guidelines and norms to be strictly observed
at all work places for the preservation and enforcement of the right to gender equality of
working women. These directions according to the Court would be binding and enforceable
in law until suitable legislation is enacted to occupy the field. However, these guidelines
will not prejudice any rights available under the Protection of Human Rights Act, 1993.
L Duty of the EmployerorOtherResponsible Persons in Workplaces and Other Institutions:
It shall now be the duty of the employer or other responsible persons in workplaces or other
institutions to take necessary steps to prevent the commission of acts of sexual harassment,
deter the commission of acts of sexual harassment and provide the procedure for (z) resolution
(ii) settlement and (iii) prosecution of acts of sexual harassment.
2. Preventive Steps: All employers or persons incharge of workplace, whether in public or
private sector, should take appropriate steps to prevent sexual harassment. They are further
required to take the following steps:
(i) Express prohibition of sexual harassment as defined above at the workplace should
be notified, published and circulated in appropriate ways;
(ii) The rules/ regulations of the government and public sector bodies relating to conduct
and discipline should include rules/regulations prohibiting sexual harassment and
provide for appropriate penalties in such rules against the offender;
(iii) As regards private employers, steps should be taken to include the aforesaid prohibitions
in the Standing Orders under the Industrial Employment (Standing Orders) Act, 1946; and
(iv) Appropriate work conditions should be provided in respect of work, leisure, health
and hygiene to further ensure that there is no hostile environment towards women at
workplaces and no woman employee should have reasonable grounds to believe that
she is disadvantaged in connection with her employment.
3. Disciplinary Action: When the conduct of the accused amounts to misconduct in
employment under the relevant service rules, the employer should initiate disciplinary
action in accordance with the rules.
4. Complaint Mechanism: Employer is required to create an appropriate complaint
mechanism in his organization for redressal of the complaint made by the victim whether
or not the conduct of the accused constitutes an offence under law or a breach of service.
Such complaint mechanism should ensure time-bound disposal of all complaints.
5. Complaint Committee
(a) Design of Complaint Mechanism: The complaint mechanism should be adequate to
provide assistance where it is necessary to have a complaint committee, a special
counsellor or other support service (including maintenance of confidentiality).
(b) Composition of Complaint Committee: The composition of complaint committee shall be
asunder:

(i) It shall be headed by a woman;

(ii) Not less than half of the members of the committee should be women;
(iii) The committee should involve a third party, either an NGO or another
body familiar with the issues of sexual harassment, in order to prevent
the possibility of any undue pressures or influence from senior levels.
 Constitutional Framework on Industrial Relations • 4 7

(c) Annual Report: The complaint committee of the concerned government deparbnent
shall prepare an annual report of its activities during the previous year. Such a report
should also state complaints and action taken by them. The committee shall forward
a copy thereof to the head of the organization concerned who shall forward the same
to the government deparbnent concerned with its comments.
(d) Compliance Report: The employer and the person incharge is also required to report:
(i) On compliance with the aforesaid guidelines;
(ii) Compliance on the reports of the complaint committee;
(iiz)Such report must be sent to the concerned government deparbnent.
6. Workers' Initiative: In order to prevent and control sexual harassment at workplace,
employers should be allowed to raise these issues:
(i) at workers' meeting; and
(ii) in other appropriate forums.
The issues of sexual harassment should be affirmatively discussed in employer-
employee meetings.
7. Awareness: In order to create awareness about the right of female employees in regard
to sexual harassment, the employer should take the following steps: (z) prominently notify
the guidelines in a suitable manner; and (iz) enact appropriate legislation on the subject that
should be suitably notified and displayed.
8. Third Party Harassment: Where sexual harassment occurs as a result of an act or omission
by: (i) any third party or (iz) outsider, the employer and persons incharge are required to
take necessary and reasonable steps to assist the affected person-(a) in terms of support
and (b) take preventive action.
9. Steps to be Taken by the Government The Central and state governments are required to:
(i) take suitable measures (including legislation)
(ii) ensure that the guidelines are observed by the employers in private sector
Two years later, in Apparel Export Promotion Council v. AK Chopra48, the Supreme Court
was invited to decide the following issues:
1. Does an action of the superior against a female employee which is against moral
sanctions and does not withstand the test of decency and modesty, not amount to
sexual harassment?
2. Is physical contact with the female employee an essential ingredient of such a charge?
3. Does the allegation that the superior 'tried to molest' a female employee at the 'place
of work' not constitute an act unbecoming of good conduct and behaviour expected
from the superior?
As regards the first issue the Supreme Court ruled that 'each incident of sexual
harassment at the place of work results in violation of the fundamental right to gender
equality and the right to life and liberty-the two most precious fundamental rights
guaranteed by the Constitution of India'.
The Supreme Court answered the second issue in negative and held that it was
erroneous to hold that since the respondent had not 'actually molested' Miss X and that he

48 JT 1999 (1) sc 61: (1999) 1 sec 759.

48 • Industrial Relations and Labour Laws

had only 'tried to molest' her and had 'not managed' to make physical contact with her,
the punishment of removal from service was not justified.
On the third issue the Supreme Court held that the act of the respondent was
unbecoming of good conduct and behaviour expected from a superior officer and amounted
to sexual harassment. The Court ruled that:
(i) sexual harassment covers any action or gesture which, whether directly or by
implication, aims at or has the tendency to outrage the modesty of a female employee;
(ii) for an offending action to be outrageous, actual molestation or touch by the offender
is not necessary;
(iii) objectionable overtures with sexual overtones are enough; and
(iv) physical contact is not necessary.

The law of employer-employee relationship is governed primarily by service rules and

regulations, standing orders or contract of employment. The service rules and regulations
empower the employer to terminate the service of an employee by giving 3 months' notice
on either side or by making payment in lieu of notice, without assigning any reason and
without providing any hearing opportunity to the employee before passing the order of
termination of service.
Standing orders of a company certified under the Industrial Employment (Standing
Orders) Act, 1946 also contain a clause stipulating abandonment of service by a workman
on remaining absent for 7 /8 consecutive days. Further, such clause is also contained in the
model standing orders of a company.

Validity of Service Rules and Regulations

The validity of service rules and regulations has been challenged in a catena of cases
before the Supreme Court. The courts have held such rules and regulations were arbitrary,
discriminatory and inconsistent with public policy. Likewise, the provisions of automatic
termination of services in the standing orders have been held to be violative of principles of
natural justice. Some other courts have even held that such termination of service amounted
to 'retrenchment' under the Industrial Disputes Act, 1947.
The Supreme Court in West Bengal State Electricity Board v. Desh Bandhu Ghosh49 held
that any provision in the regulation enabling the management to terminate the services of
a permanent employee by giving 3 months' notice or pay in lieu thereof, would be held
as violative of Article 14 of the Constitution. Such a regulation was held to be capable of
vicious discrimination and was also held to be naked 'hire and fire' rule.
Again in OP Bhandari v. Indian Tourism Development Corporation Ltd50, the Supreme
Court held that Rule 31 (v) of the Indian Tourism Development Corporation (Conduct,
Discipline and Appeal) Rules, 1978, which provided that the service of a permanent employee

49 (1985) 3 sec 116.

50 (1986) 4 sec 337.
 Constitutional Framework on Industrial Relations • 49

could be terminated by giving him 90 days' notice or pay in lieu thereof, would be violative
of Articles 14 and 16 of the Constitution.
The aforesaid view was reiterated in Central Inland Water Transport Corporation Ltd
v. Brojo Nath Ganguly. 51 Here, the Supreme Court has displayed creative role to protect the
interest of employees. Here, Rule 9(1) of the Central Inland Water Transport Corporation Ltd
Service Discipline and Appeal Rules, 1979 provided that service of a permanent employee
could be terminated by giving '3 months' notice in writing on either side'. The Court while
dealing with the validity of Rule 9 ruled:
(i) Rule 9 was arbitrary and discriminatory and, therefore, violative of Article 14 of the
Constitution.
(ii) The rule was inconsistent with public policy and consequently invalid under Section
23 of the Contract Act, 1872.
(iii) The termination of service of a permanent employee in terms of Rule 9 is both arbitrary
and unreasonable, ignores Audi Alterem Partem Rule and is violative of Article 14 of
the Constitution.
The whole case law was reviewed by the Constitution bench in Delhi Transport
Corporation v. DTC Majdoor Congress 52 and except the then Chief Justice, Sabya Sachi
Mukharji, who dissented, the other four judges reiterated the earlier view. They affirmed
the decision in Central Inland Water Transport Corporation Ltd's case. The Court, by a majority
held that the service rules and regulations which empowered the authority to terminate
the services of permanent employees by issuing notice or terminating their service by
making payment in lieu of notice, without assigning any reason and without providing any
hearing opportunity to the employees before passing the impugned order was arbitrary,
uncanalized, unrestricted and violative of the principles of natural justice as also Article 14
of the Constitution. The Court (in its majority judgement) ruled that (z) Regulation 9 (b) of
the Delhi Road Transport Authority (Conditions of Appoinbnent and Service) Regulations,
1952 suffered from the vice of arbitrariness as there was no guidance in the Regulations or
in the Act as to when or in which cases and circumstances, this power of giving notice or
pay in lieu of notice can be exercised. (iz) Regulation 9 (b) was void under Section 23 of the
Contract Act as being opposed to public policy.
In K C Sharma v. Delhi Stock Exchange53 , Delhi Stock Exchange (management)
terminated the services of the general manager, an employee after giving 3 months' notice
as per the terms of the appoinbnent. The employee challenged the order of termination of
service in a writ petition before the Delhi High Court. The Delhi High Court held that the
termination of services of the employee (appellant) was illegal and mala fide. It, therefore,
directed reinstatement with continuity in service. Thereupon the respondent, Delhi Stock
Exchange challenged this order in the division bench of the High Court. The division
bench held that (i) Delhi Stock Exchange was a 'State' within the meaning of Article 12 of
the Constitution (iz) Appellant was a permanent employee and therefore his termination
as per clause (4) of the letter of appoinbnent was ultra vires (iii) On one hand, the appellant
had made serious allegations on the member directors of the Stock Exchange including
president, vice-president and other senior members, while on the other, there were serious
allegation against him of using his office for unauthorizedly making correspondence with

51 (1986) 2 LLJ 171.

52 (1985) 3 sec 116.
53 2005 LLR 417 (SC).
50 • Industrial Relations and Labour Laws

authorities. Such allegations and counter-allegations are of serious nature and there was
bad blood between the parties. In view of this, the division bench held that it would not
be advisable to direct reinstatement irrespective of the fact that loss of confidence had not
been pleaded or proved. The Court, therefore, directed the appellant be paid n.2 lakh as
compensation in lieu of reinstatement. Thereupon, the appellant filed an appeal before the
Supreme Court. The Supreme Court held that: (z) the termination of service of the appellant
under clause of letter of appoinbnent was illegal and the removal was both malafide and
unjustified (iz) the totality of the circumstances of the case render it improper and unjust to
direct the relief of reinstatement with full back wages. It, however, raised the compensation
from n.2 lakh to n.s lakh.
It is submitted that the court has opened the scope of granting compensation in lieu
of reinstatement even where the plea of loss of confidence is not pleaded. Be that as it
may, it causes loss to the stock market. In such a situation, the court could have fixed the
accountability when there were allegations against high officials.

Validity of Certified Standing Orders

We now turn to examine whether stipulation in the certified standing orders for automatic
termination of services for overstaying the leave would be bad.
InD KYadavv.J MA Industries Ltd54, the Supreme Court has laid down that where the
rule provided that the service of an employee who overstays the leave would be treated to
have been automatically terminated, it would be bad as violative of Articles 14, 16 and 21
of the Constitution. It further held that if any action was taken on the basis of such a rule
without giving any opportunity of hearing to the employee, it would be wholly unjust,
arbitrary and unfair. The Court emphasized that principles of natural justice would have
to be read into the provision relating to automatic termination of services.
In Uptron India Ltd55 case, the Supreme Court was also invited to consider whether
Clause 17 (g) of the certified standing orders providing that 'the services of a workman
are liable to automatic termination if he overstays on leave without permission for more
than 7 days was bad and violative of the principles of natural justice. The Court answered
the question in the affirmative and observed:

We are of the positive opinion that any clause in the certified standing orders
providing for automatic termination of service of a permanent employee, not
directly related to 'production' in a factory or industrial establishment, would be
bad if it does not purport to provide an opportunity of hearing to the employee
whose services are treated to have come to an end automatically. However,
earlier in Hindustan Paper Corpn. v. Purnendu Chakrobarty, the Supreme Court has
held that an employee absenting from duty without prior sanction for about 6
months by sending applications for leave on medical ground but not supporting
with medical certificates will be deemed to have lost the lien on the job when
he has failed to avail the opportunity in replying in half-hearted way and not
reporting for duty.
The pendulum swung in other direction in some of the later cases.

54 AIR 1987 SC 2408.

55 Uptron India Ltd. v. Shammi Bhan, AIR 1991 SC 101.
 Constitutional Framework on Industrial Relations • 51

In Syndicate Bank v. General Secretary, Syndicate Bank Staff Association56 ' the Supreme
Court also ruled that:
(i) Where an employee is absent beyond the prescribed period, for which
leave of any kind cannot be granted, he should be treated to have resigned
and he ceases to be in service. In such a case, there is no need to hold an
inquiry or to give any notice, as it would amount to useless formalities.
(ii) Undue reliance on the principle of natural justice leads to miscarriage of
justice.
(iii) The principles of natural justice and duty to act in a just, fair and reasonable
manner have to be read in certified standing order/statutory rules. The
employee had unauthorizedly absented himself from work for a period
exceeding the period of prescribed limit. He was sent a notice by registered
post calling him to report for duty, failing which he would have been deemed
to have retired. The notice came with the endorsement 'refusal to accept'.
The Supreme Court held that as the employee refused to accept the notice,
service of notice upon him was complete and in such a case, removal from
service without holding inquiry was fully justified.
In Aligarh Muslim University v. Mansoor Ali Khan,57 the Supreme Court considered a
large number of its earlier judgements and held that, where an employee is unauthorizedly
absent for which leave of any kind cannot be granted, only one conclusion is possible and
holding inquiry may not be necessary. The Court also held that mere violation of principles
of natural justice does not entitle one to any relief unless the affected party satisfies the Court
that non-observance thereof has prejudiced his cause.
In Punjab and Sind Bank v. Sakattar Singh58, it has been held that the termination of a
bank employee absenting for 190 days without holding an inquiry will not be violative of
principles of natural justice.
Earlier, in Hindustan Paper Corporation v. Purnendu Chakrobarty59, the Supreme Court
held that where an employee absented from duty without prior sanction for about 6 months
by sending applications for leave on medical ground but not supporting them with medical
certificates, it would be deemed that the employee had lost the lien on the job, particularly when
he had failed to avail the opportunity in replying in half-hearted way and not reporting for duty.
We now turn to examine the decisions where it has been held that compliance of natural
justice is not necessary. Thus in Harmohinder Singh v. Kharga Canteen, Ambala Cantt 60, it was
held that the principles of natural justice are not applicable where the termination takes
place on the expiry of the contract of service.
In Uptron India Ltd v. Shammi Bhan 61, the Supreme Court also held that the principle of
natural justice is not applicable where the termination takes place on the expiry of the contract.
Likewise compliance of principles of natural justice is not necessary where the services of
employees are terminated who procured appoinbnent on the basis of forged documents.

56 (1993) 3 sec 259.

57 (2000) 5 sec 65.
58 JT 2000 (7) SC 529.
59 (2001) LLR 155 (SC).
60 (1997) 2 LLN 1007 (SC).
61 (2000) LLR (SC) 849.
5 2 • Industrial Relations and Labour Laws

In Umesh Kumar Singh v. State of Bihar and 62 the Supreme Court held that if a person
gets appoinbnent on the basis of forged and fabricated letter of appoinbnent, then services of
such person can be terminated without initiating any full fledged deparbnental proceedings
and the same will not amount to violation of principles of natural justice. The Court also
held that when appoinbnent is made illegally, irregularly and in violation of Article 16 of
the Constitution of India, then such appoinbnent can be terminated without initiating full-
fledged deparbnental proceeding. Such termination of services will not amount to violation
of principles of natural justice.

Application of Labour Laws to Minority Educational Institutions.

CMCH Employees Union v. CM Cottage, Vellore Association 63 raises an important issue,
namely, whether Sections 9-A, 10, 11-A, 12 and 33 of the Industrial Disputes Act, 1947
were applicable to educational institutions established and administered by minorities and
protected by Article 30 (1) 64 of the Constitution. The Supreme Court answered the question
in affirmative and observed:

If a dispute is raised by an employee against the management of a minority

educational institutions such dispute will have necessarily to be resolved by
providing appropriate machinery for that purpose. Laws are now passed by all
the civilized countries providing for such a machinery. The Act with which we are
concerned in this case is an Act which has been brought into force for resolving
such industrial disputes. Sections 10, 11-A, 12 and 33 of the Act cannot, therefore,
be construed as interfering with the right guaranteed under Article 30(1) of the
Constitution. Similarly, Section 9A of the Act, which requires the management to
issue a notice in accordance with the said provision in order to make changes in
the conditions of service which may include changes in the hours of work, leave
rules, introduction of new rules of discipline, etc., cannot be considered as violative
of the right guaranteed under Article 30(1) of the Constitution.

In Secretary, State of Karnataka v. Umadevi 65 a Constitution bench of the Supreme Court ruled:
Those who are working on daily wages formed a class by themselves, they cannot
claim that they are discriminated as against those who have been regularly recruited
on the basis of the relevant rules. No right can be founded on an employment on daily
wages to claim that such employee should be treated on a par with a regularly recruited
candidate, and made permanent in employment, even assuming that the principle could
be invoked for claiming equal wages for equal work. There is no fundamental right in
those who have been employed on daily wages or temporarily or on contractual basis, to
claim that they have a right to be absorbed in service. As has been held by this Court, they

62 (1998) 6 sec 538.

63 (2001) LLR 585.
64 1988 Lab. IC 225.
65 2006 (109) FLR 826 (SC).
 Constitutional Framework on Industrial Relations • 5 3

cannot be said to be holder of a post, since, a regular appoinbnent could be made only
by making appoinbnents consistent with the requirements of Articles 14 and 16 of the
Constitution. The right to be treated equally with the other employees employed on daily
wages, cannot be extended to a claim for equal treabnent with those who were regularly
employed. That would be treating unequals as equals. It cannot also be relied on to claim
a right to be absorbed in service even though they have never been selected in terms of
the relevant recruibnent rules.
The aforesaid view was reiterated in State of Karnataka v. Ganapathi Chaya Nayai'6, Union
of India and Another v. Kartick Chandra Mondal, Satya Prakash and Others v. State ofBihar67 and
Rameshwar Darl v. Indian Railway Construction Company Limited68 • In Union of India v. Vartak
Labour Union 6 , the court reiterated its earlier view but recommended:

Where members of the respondent union have been employed in terms of the
regulations and have been consistently engaged in service for the past 30 to 40
years, of course with short breaks, we feel, the Union of India would consider
enacting an appropriate regulation/ scheme for absorption and regularization
of the services of the causal workers engaged by the BRO for execution of its
on-going projects.

Non-application of Umadevi's principle

In some of the recent cases70, the Supreme Court has held that the aforesaid principle
would not be applicable even in public employment unless the management takes a stand
before the labour court in its objections that the post on which the workman was working
was not sanctioned or that his engagement was contrary to statutory rules or that he was
employed elsewhere or that there was no vacancy. In the absence of any pleadings, evidence
of findings on any of these aspects, principles laid down in Umadevi would not apply. Thus,
the aforesaid plea must be taken before the labour court even if the workers are actually
working in public employment.

Non-application of Umadevi in cases under Sections 11 A and 25F of IDA

In Krishna Singh v. Executive Engineer, Haryana State Agricultural Marketing Board71 the
Supreme Court pointed out that the decision of this Court in Secretary, State of Karnataka v.
Umadevi72 relates to regularization in public employment and has no relevance to an award
for reinstatement of a discharged workman passed by the labour court under Section llA
of the Industrial Disputes Act without any direction for regularization of his services.

66 (2010) 3 sec 115.

67 2010 (125) FLR 517 (SC).
68 2011 (128) FLR 60 (SC).
69 2011 (129) FLR 500 (SC).
70 Harjinder Singh v. Punjab State Warehousing Corporation, (2010) 3 SCC 192, Ramesh Kumar v. State of
Haryana, (2010) 2 sec 543.
71 Krishna Singh v. Executive Engineer, Haryana State Agricultural Marketing Board, Rohtak, 2010 (2)
SCALE 848. See also Anoop Sharma v. Executive Engineer, PHD, 2010 (4) SCALE 203.
72 2006 (109) FLR 826 (SC).
54 • Industrial Relations and Labour Laws

Again, in Anoop Sharma v. Executive Engineer, Public Health Division, Panipat73, the
Supreme Court deprecated the tendency of the high courts to apply Umadevi and other
cases while dealing with the validity of the award of labour courts by the management. The
Court held that none of these decisions have any application to the interpretation of Section
25F /25N of the IDA and employer's obligation to comply with the conditions enumerated
in these sections.

73 2010 (4) SCALE 203.

 PART II

TRADE UNIONS AND LAW

Trade Unions of
Workers and
Employers'
Organizations: A
Contextual and
Historical Analysis 4
Trade union is an outcome of the factory system. It is based on labour
philosophy-' united we stand, divided we fall.' Industrial revolution in India has changed
the traditional outlook in the labour management relationship. With the introduction of the
modern factory system, personal relationship between employer and employee disappeared
and has given rise to many social and economic evils which made it imperative on the part
of the workers to devise an effective means to contact employers and to bargain with them.
Formation of trade unions has provided an ideal solution.

Article 19(1)(c) of the Indian Constitution guarantees that all citizens shall have a right to
form associations or unions. This right includes not only the right to form trade unions
but also the right to continue as members of the trade unions1• It also includes the right to
refuse to be a member of an association, the right to not be compelled to join an association
and the right to not be compelled to withdraw from an association. 2 However, this right is
not absolute. Clause 4 of Article 19 empowers the State to make any law in the interest of
the sovereignty and integrity of India or public order or 'morality' and place reasonable
restrictions on the exercise of the above right.

The labour movement in India is over 15 decades old, and it may be traced from 1860s.3
Early years of the movement were generally led by philanthropists and social reformers,

1 Coimbatore Periyar Districts Dravida, Panjalal Thozhilalar Munnetra Sangam v. National Textile
Corporation Limited, 2011 LLR 1076 (HC Madras).
2 See All India Bank Employees' Association v. National Industrial Tribunal, AIR 1962 SC 171: Damyanti
v. Union of India, AIR 1971 SC 966.
3 N M Joshi, The Trade Union Movement in India (1927), 8 and RF Rustomji, The Law of Industrial
Disputes in India (Law Publishing House, 1961), XCIV: (contd.)
58 • Industrial Relations and Labour Laws

who organized workers and protected them against inhuman working conditions.
The early years of labour movement were often full of difficulties. Strike committees
emerged which called themselves trade unions and demanded the privileges of trade
unions without any means of discharging responsibilities thereof. 4 The position of trade
unions has considerably improved since then. The number of trade unions have gone up
and their membership and funds have increased. The development during the span of
about 151 years may be considered broadly under the following six periods: (z) pre-1918;
(ii) 1918-24; (iii) 1925-34; (iv) 1935-38; (v) 1939-46; and (vz) 1947 and since.
The principal purpose of this section is to trace the origin and development of trade
union movement in India. In this process, an effort will be made to state the characteristics
of labour movement and the factors which were responsible for the growth of trade union
movement during the specified period.

A. Pre-1918 Period
The earliest sign of labour agitation in India was a movement in Bengal in 1860 led by
Dinbandhu Mitra, a dramatist and social reformer of Bengal followed by some journalists
to protest against the hardships of the cultivators and also the plantation workers. The
government thereupon appointed an Indigo Commission. The report of the commission
reflected upon the gross cruelties perpetrated by foreign planters with the aid and under the
protection of laws framed by the British Government specially for this purpose. 5 Thereafter,
the system of indigo cultivation was abolished due to discovery of synthetic process.
In 18756 Sarobji Shapuri in Bombay protested against poor working conditions of
workers at that time.7 The deplorable conditions of workers were brought to the notice of
the Secretary of State for India. The first Factory Commission was, therefore, appointed
in 1875 and as a result, the Factories Act, 1881 was enacted. This Act was, however,
inadequate to meet the evil of child labour. Moreover, no provision was made to regulate
the working conditions of women workers. This gave rise to great disappointment among

Most of the writers on the subject trace the history of labour movement in India since 1875 or even
later. See for instance, S D Punekar, Trade Unionism in India, Ahmad Mukhtar, Trade Unionism
and Labour Disputes in India, Longmans Green and Co. Ltd (1935); Shiva Rao, State in Relation to
Labour in India. Chapter VI; R K Das. The Labour Movement in India, Berlin de Gruyter (1923) 65; AS
Mathur; and J S Mathur; Trade Union Movement in India, Allahabad, Chaitanya Publishing House,
(1962) 12, 14; V V Giri, Labour Problems in Indian Industry, Bombay, Asia Publishing House (1959),
1; CA Myres, Industrial Relations in India, Bombay, Asia Publishing House (1958) 100; CB Kumar.
The Development of Industrial Relations in India, Bombay, Orient Longman, (1961), 87; N F Duftry,
Industrial Relations in India, Bombay, Allied Publishers Private Ltd, (1964); T N Bhagoliwal, Economics
of Labour and Social Welfare, Agra, Sahitya Bhawan (1966), Chapter VI; Indian Law Institute, Labour
Law and Labour Relations, Rev SC Srivastava, New Delhi, (2007).
4 The period between 1875-1917 has been described as the social welfare period of early trade union
movement by Dr S D Punekar. Dr R K Das has divided the period of 1875-1917 into two sections.
The first period between 1875-1891, according to him, was devoted mainly to the regulation of
women and child labour in Indian factories. In the second period (1891-1917), very little was done
except placing memoranda before commissions and committees.
5 RF Rustomji, op. cit., XCLIV.
6 The deplorable condition of workers were brought to the notice of the Secretary of State for India
and the first Factory Commission was set up in 1875.
7 V V Giri, Labour Problems in Indian Industry, Bombay, Asia Publishing House, (1959), 1.
 Trade Unions of Workers and Employers' Organizations• 59

workers. Thereupon, another Factory Commission was appointed in 1884. In the same year,
Mr NM Lokhande organized the conference of Bombay factory workers and drew up
a memorandum signed by 5,300 workers demanding a complete day of rest on Sunday,
half-an-hour recess, working hours between 6.30 a.m. to sunset, the payment of wages not
later than 15th of the month, and compensation for injuries. 8 In 1889, in Bombay, workers
of spinning and weaving mills demanded Sunday as holiday, regularity in the payment of
wages and adequate compensation in case of accident. 9
Inspite of these agitations, no material change could be brought and, therefore, another
representation was made to the government in 1890. The stand of 1884 was also reiterated
and the petition this time was signed by 17,000 workers. The same year, the Bombay Mill
Hands Association, the first labour association was organized 10 with Mr Lokhande as its
President. It started a labour journal (Dinbandhu) in order to propagate effective views of
their own. In the very same year, Bombay Mill Hands Association placed its demand before
the Factory Labour Commission (1890), with Mr Bangalee, the great philanthropist as a
member. The Commission gave due consideration to the demands of labour.
Several labour associations were formed after 1890. For instance, the Amalgamated
Society of Railway Servants in India and Burma was formed in April 1897 and registered
under the Indian Companies Act,11 the Printers Union, Calcutta was formed in 1905, the
Bombay Postal Union was formed in 1907, the Kamgar Hityardhak Sabha and Service
League were formed in 1910.
The post-1890 period was also important for the reason that several strikes occurred
during this period. Instances, may be cited of two strikes which occurred in Bombay in 1894.
The first big strike of mill operators of Ahmedabad occurred in the first week of February,
1895. The Ahmedabad Mill Owners Association decided to substitute a fortnightly wage
system for a weekly one which was in force ever since 1896. This forced over 8,000 weavers
to leave work. However, the strike was unsuccessful. 12
There were also strikes in jute industries in Calcutta in 1896. 13 In 1897, after a plague
epidemic, the mill workers in Bombay went on strike for payment of daily wages instead
of monthly payment of wages. 14
In 1903, the employees of press and machine section of Madras Government went on
strike against overtime work without payment. The strike prolonged for six months and
after great hardship and starvation, workers returned to work. Two years later in 1905, the
workers of the Government of India Press, Calcutta, launched a strike over the question
of (z) non-payment for Sunday and gazetted holidays; (ii) imposition of irregular fines;
(iii) low rate of overtime pay; and (iv) the refusal of authorities to grant leave on medical

8 R K Das, The Labour Mavement in India, Berline de Gruyer (1923} 9; Ahmad Mukhtar, Trade Unionism
and Labour Disputes in India, Bombay, Longmans Green and Co. Ltd, (1935), 11; CB Kumar, op. cit., 87.
9 Ahmad Mukhtar, op. cit. 11.
10 The Bombay Mill Hands Association cannot, however, be classified as a genuine trade union. The
workers did not have any effective organization of their own. The Bombay Mill Hands Association
has no existence as an organized body, having no roll of membership, no funds and no rules. (See
Report on the Working of Factories Act in Bombay, 1892).
11 Ahmad Mukhtar, op. cit., 13.
12 Annual Provincial Factory Report for Bombay for the year 1895, 5-6.
13 G Ramanujam, Story of Indian Labour.
14 Gopal Ghosh, Indian Trade Union Movement.
60 • Industrial Relations and Labour Laws

certificate. 15 The strike continued for over a month. The workers returned on fulfilment of
certain demands. In December 1907, the workers of Eastern Railway Workshop at Samastipur
went on strike on the issue of increment of wages. They went back to work after six days
when they were granted extra allowance owing to famine conditions prevailing at that time
in the region. In the same year, the Bombay Postal Union and Indian Telegraph Association
called a strike. In 1908, workers of textile operators in Bombay struck work in sympathy
with Shri Bal Gangadhar Tilak who was imprisoned for sedition. The workers in Bombay
went on strike in 1910 demanding reduction in working hours. As a result of this agitation,
the Government of India set up a commission to enquire into the desirability of reducing
the working hours. On the basis of the recommendation, the working hours were reduced
to 12 hours a day. Similar strikes continued from year to year particularly in Bengal and
Bombay demanding an increase in wages.
Certain broad features of the labour movement during the period of 1860-1917 may
be briefly noted:
First, the movement was led by philanthropists and social reformers and not by
workers.
Second, there was no trade unions in the modern sense. According to the report on the
working of the Factories Act at Bombay, in 1892, the Bombay Mill Hands Association was not
to be classified as a genuine trade union. The following excerpts of the report are pertinent:

The Bombay Mill Hands have no organized trade unions. It should be explained
that although Mr NM Lokhande, who served on the last Factory Commission,
described himself as President of the Bombay Mill Hands Association,
that Association has no existence as an organized body, having no roll of
membership, no funds and no rules. I understand that Mr Lakhonde simply
acts as volunteer adviser to any mill hand who may come to him. 16
But, the trade unions existed as early as 1897. For instance, the Amalgamated Society
of Railway Servants of India and Burma and other unions were formed in April 1897.
Third, the associations mainly relied on petitions, memoranda and other constitutional
means for placing their demands which were mainly confined to factory legislation, e.g.,
hours of work, health, wages for overstay, leave, holidays and such other matters.
Fourth, the early movement was confined to revolt against conditions of child labour
and women workers employed in various industries.
Fifth, there was absence of strike as a means of getting grievances redressed. The
association of workers worked with the cooperation of management and government officials
and some of them considered it their duty 'to avoid strikes upon the part of its members by
every possible and lawful means'17
Sixth, strike during this period was considered to be a problem of law and order,
instances are not lacking where police acted upon strikers by using force and framed false
charges against them. 18

15 Ahmad Mukhtar, op. cit., 4.

16 Report on the Working of Factories Act at Bombay, (1892), 15.
17 S D Punekar, op. cit., 59.
18 See AITUC Report of the First Session held at Bombay, (1920), 12.
 Trade Unions of Workers and Employers' Organizations • 61

B. 1918-1924
The period 1918-1924 can perhaps be best described as the era of formation of modern trade
unionism. This period witnessed the formation of a large number of trade unions. Important
among these were Madras Labour Union, Ahmedabad Textile Labour Association, Indian
Seamen's Union, Calcutta Clerks's Union and All India Postal and RMS Association. One
of the significant features of this period was that the All India Trade Union Congress was
formed in 1920.
The growth of trade unions was accompanied by a large number of strikes. The
deteriorating economic conditions of workers resulted in strikes. The wages of workers
were increased but it could not keep pace with the soaring prices of commodities. Further,
there was a shortage of labour in some industries due to influenza epidemic. 19
Several factors were responsible for formation and growth of trade unions:
First, the economic conditions of workers played an important role in the formation of
trade unions. The demand for Indian goods increased enormously for two reasons: (z) The
shortage of shipping facilities led to restricted imports of several commodities for which India
was dependent on foreign countries; (iz) There was great demand for Indian goods from allies
and neutral countries. For these reasons the prices of Indian commodities, viz., salt, cotton,
cloth, kerosene, rose high. Naturally, the cost ofliving steadily increased. The employer earned
huge profits. The wages of workers were increased but not in pace with the soaring prices of
commodities. This resulted in further deterioration of conditions of workers. Further, there
was shortage oflabour in some industrial centres due to epidemic of influenza.20 These reasons
led to the formation of trade unions to improve their bargaining positions.
Second, the political conditions prevailing in the country also helped the growth of the
labour movement. The struggle for independence started during this period and political
leaders asserted that organized labour would be an asset to the cause. The labour unions
were also in need of some help. The political leaders took lead and helped in the growth
of trade unions.
Third, the workers' revolution in Russia which established the first workers' State in
the world had its own influence on the growth of trade union movement.
Fourth, was the worldwide unrest in the post-war period. The war awakened in the
minds of industrial workers.
Fifth, was the setting up of the International Labour Organization in 1919 of which
India was the founder member. The constitutionofILO required one representative from the
governments of member states. The government, without consulting the unions, appointed
Shri NM Joshi as its representative. This propelled the workers to organize. As a result,
AITUC was formed in 1920. This gave an opportunity to send members for ILO conferences
and also brought a change in government attitude while dealing with labour problems.

c. 1925-1934
This period witnessed a split in AITUC into leftist and rightist wings. Later in 1929, a wing of
AITUC, namely, the All India Trade Union Federation was formed. The main cause behind
Communist influence was the economic hardship of workers.

19 Shiv Rao, op. cit.

20 Shiv Rao, The Industrial Workers in India, 19.
6 2 • Industrial Relations and Labour Laws

This period also showed remarkable decrease in the intensity of industrial conflict.
At least two factors were responsible for it. First, the Trade Disputes Act was passed in
1929 prohibiting strikes and lockouts. Second, the failure of strikes and lockouts resulted
in industrial strife.
Another significant feature of this period was the passing of the Trade Unions Act,
1926 and the Trade Disputes Act, 1929. The former Act provides for registration of trade
unions and affords legal protection to intervene in trade disputes. The latter Act provided
for ad hoe conciliation board and court of inquiry for settlement of trade disputes. The
Act, as already observed, prohibited strikes and lockouts in public utility services and
general strikes affecting community as a whole.

D. 1935-1938
During this period, unity was forged among trade unions. This led to a revival of trade
union activity. In 1935, the All India Red Trade Union Congress merged itself with the
AITUC. Again, in 1938, an agreement was arrived at between All India National Trade
Union Federation and AITUC and consequently, NTUC affiliated itself with AITUC. 21
Several factors led to this revival of trade unionism. First, the change in political set
up in the country was responsible for the change. It is significant that Congress Party which
formed its government in 1937 in several provinces tried to strengthen the trade union
movement and to improve the conditions of labour. Second, the working class was also
awakened to their rights and they, therefore, wanted to have better terms and conditions
of service. Third, management also changed its attitude towards trade unions.
The year 1938 saw the most important state enacbnent, viz., the Bombay Industrial
Disputes Act, 1938. The significant features of the Act were: '(a) compulsory recognition of
unions by the employer; (b) giving the right to workers to get their case represented either
through a representative union or where no representative union in the industry/ centre/
unit existed, through elected representatives of workers or through the government labour
officer; (c) certification of standing orders which would define with sufficient precision
the conditions of employment and make them known to workmen; (d) the setting up of
an industrial court, with original as well us appellate jurisdiction to which parties could
go for arbitration in case their attempts to settle matters between themselves or through
conciliation did not bear fruit; and (e) prohibition of strikes and lockouts under certain
conditions.'22 The scope of the Act was limited to certain industries in the province.

E. 1939-1946
World War II, like World War I, brought chaos in industrial relations. Several reasons may
be accounted for the industrial unrest and increased trade union activity. First, the rise in
prices far outpaced the increase in wages. Second, there was a split in AITUC due to nationalist
movement. Third, the post-World War II period witnessed retrenchment and, therefore, the
problem of unemployment. During this period, the membership of registered trade unions
increased from 667 in 1939-40 to 1087 in 1945-46. Further, the number of women workers in
the registered trade unions increased from 18,612 in 1939-40 to 38,570 in 1945-46. Moreover,
the period witnessed a large number of strikes.

21 For instance see National Federation of AITUC.

22 See Government oflndia, Report of the National Commission on Labour, New Delhi. (1969), 319.
 Trade Unions of Workers and Employers' Organizations• 63

During the emergency, the Defence of India Rules, 1942 remained in force. Rule 81 A
of the Rules empowered the government-(i) to require employers to observe such terms
and conditions of employment in their establishments as may be specified; (ii) to refer any
dispute to conciliation or adjudication; (iii) to enforce the decisions of the adjudicators; and
(iv) to make general or special orders to prohibit strikes or lockouts in connection with any
trade dispute unless reasonable notice had been given. These provisions thus permitted
the government to use coercive processes for the settlement of 'trade disputes' and to place
further restrictions on the right to use instruments of economic coercion.
In 1946, another enacbnent of great significance in labour relations, namely, the
Industrial Employment (Standing Orders) Act, 1946 was passed with a view to bring
uniformity in the condition of employment of workmen in industrial establishments and
thereby to minimize industrial conflicts. 23 The Act makes it compulsory for employers
engaging 100 or more workmen 'to define with sufficient precision the conditions of
employment' and to make those conditions known to workmen. 24
Another important enacbnent at state level was the Bombay Industrial Relations Act,
1946. The Act made elaborate provisions for the recognition of trade unions and rights
thereof.

F. 1947 and Since

With Independence, the trade union movement in India got diversified on political
considerations. The labour leaders associated with the National Congress Party formed the
Indian National Trade Union Congress in 1947. The aim of the INTUC was 'to establish an
order of society which is free from hinderances in the way of an all-round development of
its individual members, which fosters the growth of human personality in all its aspects and
goes to the ubnost limit in progressively eliminating social, political or economic activity
and organization of society and the anti-social concentration of power in any form.
In 1948, the Socialist Party formed an organization known as Hind Mazdoor Sabha.
The aims and objects of the Sabha were to: (i) promote the economic, political, social and
cultural interest of the Indian working class; (ii) guide and coordinate the activities of
affiliated organizations and assist them in their work; (iii) watch, safeguard and promote
the interests, rights and privileges of workers in all matters relating to their employment;
(iv) promote the formation of federation of unions from the same industry or occupation; (v)
secure and maintain for the workers freedom of association, freedom of speech, freedom of
assembly, freedom of press, right of work or maintenance; right of social security and right
to strike; (vi) organize and promote the establishment of a democratic socialist society in
India; (vii) promote the formation of cooperative societies and to foster workers' education;
(viii) cooperate with other organizations in the country and outside having similar aims
and objectives'.25
A year later in 1949, another organization, namely, the United Trade Union Congress
was formed. The aims and objects of the United Trade Union Congress as given in its
constitution were: (i) establishment of socialist society in India; (ii) establishment of a
workers and peasants state in India; (iii) nationalization and socialization of the means

23 S S Rly Co. v. Workers Union, AIR 1969 SC 513.

24 Preamble of the Industrial Employment (Standing Orders) Act, 1946.
25 Constitution of the Hind Mazdoor Sabha.
64 • Industrial Relations and Labour Laws

of production; (iv) safeguarding and promoting the interests, rights and privileges of the
workers in all matters, social, cultural, economic and political; (v) securing and maintaining
for the workers' freedom of speech, freedom of press, freedom of association, freedom of
assembly, right to strike, right to work or maintenance and the right to social security; and
(vi) bringing about unity in the trade union movement. 26
The same year also witnessed the passing of the Industrial Disputes Act, 1947 and the
Trade Unions (Amendment) Act, 1947. The former Act introduced the adjudication system
on an all India level. It prohibits strikes and lockouts without giving 14 days' prior notice and
during the pendency of conciliation proceeding before a conciliation officer in public utility
services. In public and non-public utility services, it prohibits strikes and lockouts during
the pendency of proceedings before board of conciliation, labour court, tribunal, national
tribunal and arbitration (when a notice is given under Section 10-A of the Act). The Act
further prohibits strikes and lockouts during the operation of settlement or award in respect
of any matter covered under settlement or award. The latter Act brought several changes
of great significance. It provided for recognition of trade unions and penalties for unfair
labour practices by employers and unions. But the Act has not yet been enforced. Again in
1950, the Trade Unions' Bill was introduced in the Parliament providing for registration and
recognition of trade unions and penalties for certain unfair labour practices. On dissolution
of the Parliament, the bill lapsed and has since not been brought forward by government
before the Parliament.
Political involvement continued even after 1950. In addition to four major all India
organizations discussed above, three unattached unions dominated by one or the other
political parties were formed. For instance on 23 July 1954, a federation namely, Bharatiya
Mazdoor Sangh (BMS) was formed in Bhopal by Jan Sangh Party, presently known as
Bhartiya Janta Party. The main object of BMS is to check the increasing influence of the
Communist unions in the industry and cooperate with non-Communist unions in their just
cause. A year later, Hind Mazdoor Panchayat, a new trade union organization by Sanyukt
Socialist Party and Indian Federation of Independent Trade Unions which have no affiliation
with any political party, were formed.
The period also saw amendments in the Trade Unions Act in 1960. The amended Act
brought four new provisions: (i) minimum membership subscription was incorporated; (ii)
the registrar of trade unions was empowered to inspect account books, register, certificate
of registration and other documents connected with the return submitted by them under
the Trade Unions Act; (iii) government was empowered to appoint additional and deputy
registrar with such powers and functions as it deemed fit; (iv) fate of the application
for registration where applicants (not exceeding half of them) ceased to be members or
disassociated themselves from the application was statutorily decided.
Some independent trade unions met at Patna on 21 March 1964 and decided to form
the All India Independent Trade Union Congress, but this effort to unite the unaffiliated
unions did not continue for a longer period and met an early death.
The Act was once again amended in 1964. It made two changes: (i) it disqualified
persons convicted by the court of an offence involving moral turpitude from becoming

26 Constitution of UTUC.
 Trade Unions of Workers and Employers' Organizations• 65

office-bearers or members of the executive of a registered trade union; and (iz) it required
for submission of annual returns by registered trade unions on a calendar year basis.
1970 witnessed another split at the national level in the AITUC. The decision of
Communist group, which decided not to remain within the AITUC resulted in the
formation of a separate organization, namely, Centre of Indian Trade Union by the Marxist
Communists.
A further split took place in 1970-72. During the period, there was a split in the United
Trade Union Congress and another organization namely, the United Trade Union Congress
Lenin Sarani was formed.

G. The Unity Move

In 1972, a new experiment was made when three central trade union organizations,
namely, the HMS, the INTUC and the AITUC, in the meeting held on 21 May 1972 at New
Delhi agreed to establish a National Council of Central Trade Unions for the purpose of
promoting understanding, cooperation and coordination in the activities of the central
trade unions, to defend the interests of the working class and the trade union movement,
and help towards the development of the national economy on a democratic, self-reliant
and non-monopoly basis, to overcome trade union rivalry and bring about trade union
unity for common objectives and action. However, this organization could not survive
for a longer period and met an early death. The year also witnessed the emergence of the
Trade Union SEWA by leading workers in Ahmedabad. Ms Ela Bhatt has been instrumental
for the same.
In September 1977, an All India Convention of Central Organization of Trade Unions
including CITU, BMS, HMS, HMP and the TUCC was called which demanded time-bound
programmes ensuring reduction in wage disparity, national wage and price policy and
need-based wages for industrial and agricultural workers.
In 1981, once again unity was shown by the trade unions in the protest against the
promulgation of the Essential Services Maintenance Ordinance, 1981 and also the Bill in
that regard in the Parliament. A year later in 1982, the Trade Unions (Amendment) Bill,
was introduced in Lok Sabha. The Bill proposed to make the following amendments in the
Act, namely:
(i) To reduce multiplicity of unions, it proposed to change the existing provision of
enabling any seven workmen to form a trade union by providing for a minimum
qualifying membership of 10 per cent of workmen (subject to a minimum of ten)
employed in the establishment or industry where the trade union is proposed to
function or 100 workmen, whichever is less, for the registration of trade unions;
(ii) There is at present no machinery or procedure for resolution of trade union disputes
arising from inter-union and intra-union rivalries. It proposed to define the expression
'trade union dispute' and to make provision for resolving such disputes through
voluntary arbitration, or by empowering the appropriate government and the parties
to the dispute to refer it to the registrar of trade unions for adjudication;
(iii) The Act does not lay down any time-limit for registration of trade unions. It proposed
to provide for a period of 60 days for the registration of trade unions by the registrar
after all the formalities have been completed by trade unions. It also proposed to
66 • Industrial Relations and Labour Laws

provide that a trade union whose certificate of registration has been cancelled would
be eligible for re-registration only after the expiry of a period of 6 months from the
date of cancellation of registration, subject to certain conditions being fulfilled by the
trade union;
(iv) Under the existing provisions of the Act, 50 per cent of the office bearers in the executive
of a registered trade union shall be persons actually engaged or employed in an industry
with which the trade union is connected. It proposed to enhance this limit to 75 per
cent so as to promote development of internal leadership;
(v) It proposed to empower the registrar of trade unions to verify the membership of
registered unions and connected matters and report the matter to the state and Central
Governments;
(vi) Penalties specified in the Act for the contravention of its provisions were proposed to
be enhanced.27
In order to reduce multiplicity in trade union, strengthening their bargaining power
and to provide check-off facilities to trade union, the Bill seeks to provide that in relation
to a trade union of workmen engaged or employed in an establishment or in a class of
industry in a local area and where the number of such workmen are more than 100, the
minimum membership for the registration of such trade union shall be 10 per cent of such
workmen. Such unions shall be eligible for registration only if they meet this minimum
test of strength. From this it follows that the setting up of bargaining councils (which will
be able to negotiate on all matters of interest to workmen with employers) will to some
degree bring confidence and strength. The limitations placed upon the leadership of trade
unions by restricting the number of non-workmen as office-bearers of a trade union to two
and the provision that a person can become an office-bearer or a member of an executive
of not more than seven registered trade unions will go a long way in developing internal
leadership in trade unions.
The Bill also provides for the constitution of a bargaining council for a three year
term to negotiate and settle industrial disputes with the employer. The check-off system
would be normally adopted for verification of the strength of trade unions in an industrial
establishment, though the Bill provides for the holding of a secret ballotin certain exceptional
circumstances.28
While the unit-level bargaining council will be set up by the employers, the appropriate
government will be empowered to set up such councils at industry level. All the registered
trade unions will be represented on the bargaining councils in proportion to their relative
strength, but any union with a strength of not less than 40 per cent of the total membership
of the workmen in an industrial establishment will be recognized as the 'principal agent'.
If there is no trade union having members among the workmen employed in an industrial
establishment, a workmen's council will be set up in such a manner as may be prescribed.
The Central Government will also be empowered to constitute such bargaining councils at
the national level.
However, the aforesaid Bill lapsed. Six years later, the Trade Unions and the Industrial
Disputes (Amendment) Bill, 1988 was introduced in the Rajya Sabha on 13 May 1988 but it
has not yet received the colour of an Act.

27 See 'Statement of Objects and Reasons' appended to the Bill.

28 Ibid.
 Trade Unions of Workers and Employers' Organizations• 67

The Government of India had in 1997, approved certain amendments to the Trade
Unions Act, 1926. The objective of these amendments is to ensure organized growth of
trade unions and reduce multiplicity of trade unions. The Trade Union Amendment Bill,
1997 was to be introduced in the Rajya Sabha in the winter session of the Parliament in the
year 1997, but due to various reasons, it was not introduced.29
During 1999, a consensus emerged among the leading trade union federations like the BMS,
AITUC, CITU and INTUC on protection to domestic industry, strengthening the public sector
units by way of revival and induction of professionals in the management and amendment of
labour laws and inclusion of rural and unorganized labour in the social safety net. 30
The year 2001 witnessed several amendments of much relevance, in the Trade Unions
Act, 1926. However, this amendment came into force w.e.f. 9 January 2002.
During 2009, the Workmen's Compensation Act, 192 was amended on the
recommendation of the (Second) National Commission on Labour. Another development
in this year was the enacbnent of the Unorganized Workers' Social Security Act, 2008
which came into force with effect from 16 May 2009. A year later, the Employees' State
Insurance Act, 1948 was amended by the Employees' State Insurance (Amendment) Act,
2010. Moreover, the Payment of Gratuity Act, 1972 was amended by the Payment of Gratuity
(Amendment) Act, 2010 and the Plantation Labour Act, 1951 by the Plantation Labour
(Amendment) Act, 2010. Another major legislative development was the amendment in
the Industrial Disputes Act, 1947 by the Industrial Disputes (Amendment) Act, 2010 which
came into force with effect from 19 August 2010.
During 2009, a consensus emerged among major central trade unions including BMS,
INTUC, AITUC, HMS, CITU, AIUTUC, TUCC, AICCTU and UTUC which had organized
the National Convention of Workers in Delhi on 14 September 2009 and decided to launch
joint action programme on price rise, labour law violations, job losses, creation of National
Social Security Fund for Unorganized Workers and against disinvesbnent of profit-making
PSUs. The National Convention was followed by All India Protest Day on 28 October 2009.
The trade unions also met the Prime Minister on 17 September 2009 and urged upon him
to address the above main concerns of the working people effectively. As a follow up,
central trade unions staged massive dharna before Parliament on 16 December 2009 as
a protest against government inaction to control price rise, check labour law violations,
non-creation of National Fund for Unorganized Workers Social Security, loss of jobs in the
name of recession and disinvesbnent of profit-making public sector undertakings. Similar
joint dharnas have been staged all over the country in state capitals and industrial centres.
The trade unions being dissatisfied with the attitude of the government in not taking any
appropriate steps to meet the five demands, the workers went on Satyagraha/Jail bharo on
4 March 2010 all over the country, for the aforesaid demands.
On 28 February 2012, a national strike was called by 11 central trade union organizations
(including AITUC, BMS, CITU, HMS, INTUC, AITUC, TUCI and NLO) supported by about
5,000 other smaller trade unions for their 10-point charter of demand which included rising
unemployment, labour right violations, mass contractualization, price rise particularly of
essential commodities, universalization of social security, etc. It was not only successful in

29 Government of India, Ministry of Labour, Annual Report 1997-98. 31.

30 See Economic Times, New Delhi, February 14, 1999.
6 8 • Industrial Relations and Labour Laws

bringing together the much-divided trade union movement but was also able to convey its
seriousness over the issues facing the working class.

H. A Broad Survey
A survey of the development of trade unions in India shows that most of the unions are
affiliated with either of the four central trade union federations, viz., the Indian National
Trade Union Congress, All India Trade Union Congress, Hind Mazdoor Sabha and United
Trade Union Congress. Besides these, some trade unions are affiliated with seven other
trade union federations, viz., Bhartiya Mazdoor Sangh, Hind Mazdoor Panchayat, Centre
of Indian Trade Union, National Federation of Independent Trade Unions, National Labour
Organization, Trade Union Coordination Committee and United Trade Union Congress
(Lenin Sarani). These trade union organizations have been patronized by different political
parties in the country. Further, a survey of trade unions in India reveals that over the years,
the trade union movement has undergone significant development. Both workers and
non-workers have been involved. The beginnings of the movement were the outcome of
the efforts made by certain social reformers and labour leaders. 'The early ... trade union
movement (was) often full of difficulties. Strike committees called themselves trade unions
and demanded the privileges of trade unions, without any means of discharging the
responsibilities thereof.' 31 The position has considerably changed since then. The number
of unions has gone up and membership and funds of trade unions have increased.

As per the report of the Ministry of Labour, Government of India, the strength of central
trade unions as per the verification of membership of trade unions as on 31 December 2002
was as follows:
(i) BMS 6215797
(ii) INTUC 3954012
(iii) AITUC 3442239
(iv) HMS 33384.91
(v) CITU 2678473
(vz) UTUCLS 13,73268
(vii) UTUC 606935
(viii) AICCTU 639962
(ix) TUCC 732760
(x) SEWA 688140
(xz) LPF 6115 06
(xii) NIFTU 569599
COHN
Source: Govt. oflndia; Ministry of Labour and Employment, Order No L-52025 /20 /2003-lR (IMP-1}
dated 11.1.2008

31 See the Report of the Bombay Industrial Disputes Committee, 1922.

 Trade Unions of Workers and Employers' Organizations• 69

The (Second) National Commission on Labour in its report of 2002 gave the following
account on the development of trade union movement.
(i) The trade union movement in India has now come to be characterized by multiplicity
of unions, fragmentation, politicization, and a reaction that shows a desire to stay
away from politically-oriented central federation of trade unions and struggles for
cooperation and joint action.
(ii) One sees an increase in the number of registered unions in the years from 1983 to 1994.
But one also sees a reduction in the average membership per union and in the number
of unions submitting returns.
(iii) There are other unions that have founded into bodies relating to certain industries
or employment, but have kept out of the main central trade union federations. This
includes National Alliance of Construction Workers, National Fish Workers' Federation,
National Alliance of Street Vendors, etc.
(iv) We must also make specific mention of the emergence of the trade union-SEWA
group of organization. It did not confine itself to the traditional method of presenting
demands and resorting to industrial action in pursuit of them. It took up the work
of organizing the women workers who were engaged in unorganized sector of
employment, combining other constructive activities like marketing, the provision of
micro-credit, banking, training and representing the views and interests of workers.
(v) There is yet another development on the trade union scene which relates to the
increasing tendency on the part of trade unions to get together in ad hoe struggle
committees to launch struggles, or to support a struggle that one of them has launched.
(vi) Another new feature is the readiness and the determination of central trade unions to
escalate the objective to matters of government policy like, disinvesbnent, privatization,
etc. Instances of such action were witnessed in the strike on BALCO privatization, the
Rajasthan agitation by the government servants and the strikes by electricity workers
in UP, government employees in Kerala, and so on.
(vii) A grave threat to the authentic trade union movement seems to be emerging from the
underworld. There are also reports of some cases where such unions have succeeded
through other means. Many questions arise. The primary question perhaps is: what
are the methods or abnormal methods that these new 'leaders' employ, and how can
the authentic trade unions, the management and industry as a whole be protected
from the inroads and tactics of these interlopers from the underworld. The use of
terror in any form will only nullify democratic rights by creating an abnosphere in
which people are forced to act or not to act merely to protect their skin. It has therefore,
become necessary to protect the workers as well as managements from such forces.
(viii) There are trade union leaders who ask for abolition of contract labour but ultimately
relent if the contract assignment is given to them or their benami agents. This makes
a mockery of the trade union movement and brings down the trade union leaders in
the esteem of employees.
(ix) Another practice that undennines respect is that of pennitting pennanent workers to get
their jobs done through proxy workers or letting others work in their place, and taking a
cut form the wages of their proxies. Similar is the effect of so-called unions that take up the
grievances of workers and charge a commission on the monetary gains they may secure.
(x) There is also a tendency to convert unions into closed shops.
7o • Industrial Relations and Labour Laws

The trade unions get greater strength and security if they have a contract over the supply
of labour at pre-entry or at least post-entry level in the industry. In order to appreciate
the feasibility of adopting such a system in India, it is necessary to examine the concept of
closed shop and union shop.
Lord Denning defines 'closed shop' as:

A factory or workshop or firm in which all the workmen are members of

trade union; it is closed to everyone except the members. Any newcomer who
comes to work must join the union. If the newcomer refuses to do so, the union
members will insist on his dismissal. They tell the employer, sack him or we
will go on strike. The employer gives in. He dismisses the man, or the man
gives in and joins the union. 32
The First National Commission on Labour explains 'closed shop' as an agreement
with the employer or at least his acquiesce to recruit only trade union members. On the
other hand 'union shop' is one 'by which new entrants to emplornent, if they are not union
members, they must join the union within a specified period.'3
Unlike the industrially advanced countries like USA or UK, closed shop or union
shop has not gained momentum in India. The committee appointed by the Government
of Bihar in 1956 strongly opposed the system of closed shop on the ground that 'the right
of the citizens to seek and get employment is one of the fundamental rights guaranteed
under the Constitution and any interference with that right in the shape of prior
membership of a trade union would impose an unreasonable restriction on the right to
work.' The same line of approach was adopted by the First National Commission on
Labour. According to the Commission, closed shop is neither practicable nor desirable.
Indeed it is against the fundamental right of association guaranteed under Article 19
(1) (c) of the Constitution. 34

A. Need to Form Employers' Organizations

We have seen in previous section that a workers' get together for joint action through a trade
union, meets the employer on equal terms. Like-wise, employers organize themselves in
furtherance of common objectives of evolving common attitudes to labour or approaches to
national policies, as also for standardization of wages and other conditions of employment
in an industry within a local area 35 • The following are the main objectives:
(i) to promote collective bargaining at different levels;
(ii) to develop healthy and stable industrial relations;

32 Lord Denning, The Closing Chapter (1983), 197.

33 Government oflndia, Report of the (First) National Commission on Labour (1969), 293.
34 Government of India, Report of the (First) National Commission on Labour (1969} 298.
35 N H Tata 'Why Employers' Organization? In Pursuit ofIndustrial Harmony-An Employer's perspective',
Bombay, National Institute of Labour Management (1975) 122.
 Trade Unions of Workers and Employers' Organizations • 71

(iii) to bring a unified employers' viewpoint on various issues of industrial relations; and
(iv) to represent employers' organization in the meetin§,s of ILC and SLC boards in
conformity with tripartite approach to labour matters. 6

B. Origin and Growth

The origin, growth and development of employers' organizations have three distinct
phases :(i) the period prior to 1930; (ii) the period between 1931 to 1946; and (iii) the post-
Independence period. Each phase reveals its own structural and functional characteristics; in
each period the organizations had to undergo changes because of contemporary economic,
social and political developments. These changes have been more rapid in some than in
others. The periods referred to also coincided with important developments in the labour
field, and these have had a great impact on the pattern and development of employers'
organization as also on their functioning 37•
1. Pre-1930 period: This period was characterized mainly by the formation of associations of
merchants in the form of chambers of commerce. During the latter half of the last century,
industrial associations also came into being with the aim of protecting the commercial interest
of their members and securing concessions from the government. Regional associations
at important centres of industrial activity developed, but again with a different focus for
action. The Bombay Mill-Owners Association, the Bengal Mill-Owners' Association, the
Ahmedabad Mill-Owners' Association are instances in point'8•
2. 1931-1946: Organizing chambers of commerce and industrial associations for dealing
with a variety of problems connected with industry was the rule prior to 1930. Some of
these chambers dealt with labour matters too. 39 The All-India Organization of Industrial
Employers (AIOIE) 40 and the Employers' Federation of India (EFI) came into existence in
1933 to comprehend and deal with problems of industrial labour in a concerted manner.
The All-India Manufacturers' Organization (AIMO) was formed in 1941. The setting up of
these organizations was again, as in the case of workers unions, in response to the need then
felt for representation on international conferences and legislative bodies.41
3. Post-Independence period-The period since Independence witnessed the growth of
planning, expansion of industrial activity, extension of the democratic apparatus, passing
of several labour laws and a growing trade union movement, all of which acted as a spur
for the strengthening and expansion of employers' organizations. Experience of working
together convinced employers of the advantage of united action. Employers' organizations
grew in strength mainly to meet the requirements of individual employers for advice on
labour matters. In some cases, they built up their strength to match that of organized labour;
in others, it was the other way round. At present, employers' organizations are organized at
three levels namely: (a) employers operating through their local organizations or otherwise;
(b) industrial associations which cut across state boundaries; and (c) federations which
comprise representatives both of industries and centres. Of the three, the local organizations

36 Ibid
37 Ibid.
38 Ibid.
39 The role played by employers' organization has been described in the Report of the Royal
Commission on Labour. 316-17.
40 This organization has since changed its name. It is now called All India Organization of Employers.
41 Ibid.
7 2 • Industrial Relations and Labour Laws

which operate mainly through the chambers of commerce cover all industries in an area;
their activities in the labour field are comparatively less extensive.
This period witnessed significant developments and several employers'
organizations and federations were set up. However, multiplicity of organizations at
the national level has not been a problem with employers' interest at tripartite forums.
This has, for all practical purposes, been effectively secured by the main employers'
organizations coming together under the CIE. But the AIMO is outside the CIE. The
First National Commission on Labour felt that it will be desirable that CIE brings this
organization also within its fold.
Some organizations at the industry level and the Employers' Federation of India at
the national level, originally registered under the Companies Act, are now registered under
the Trade Unions Act, 1926, while many are still outside its purview.

C Role and Functions of Employers' Organizations

The main role and functions of an employers' organization is to protect and promote the
interest of its members. The membership of employers' organizations is basically composed
of corporations/employers. All enterprises have to meet the test of economic viability.
For a proper appraisal of the role and functions of an organization, this aspect cannot be
ignored. Thus, its activities are designed and directed in such a manner that their members
stand to gain. Also the organizations have to work on a broader plane; labour problems
are only a part of their overall responsibilities. Economic, commercial and fiscal matters
and policies are equally or even more important for them. The organizations represent
their members' view in formulation of government's policies, rules and regulations and in
giving advice to members on the interpretations and extent of applicability of agreements
arrived at various bipartite and tripartite bodies and on Acts and regulations which come
into force. Labour deparbnents/ advisory services, which have come in vogue in many
employers' organizations to advise and assist members have been the direct consequence
of the recognition of these functions. 42
Employers' organizations find it necessary to have legislative support for realization
of their objectives. The pursuit of their activities leads to their involvement in politics or
to their developing lobbies without directly aligning themselves with any political party.
There is evidence on record to show that individual employers and not the employers'
organizations have used these avenues to the extent necessary although providing finances
to political parties or sponsoring candidates are not unknown to the organizations or
industrial associations-national or local. Political activity by employers' associations may
be as inimical to peace in industry as that by workers' associations, particularly when we are
envisaging employers' organizations to include both public and private sector units. This
should be eschewed. It is thus, that they will be able to establish rapport between the two
sectors and work exclusively in the interest of industry rather than in the sectional interests
of one or the other form of ownership. 43
The pursuit of economic gains by employers' organizations does not mean that
they should not recognize social responsibilities. With planned economic development
and increasing democratization of the institutional framework of society, there is active

42 See Govt of India, Report of the [First] National Labour Commission (1969) 299.
43 Ibid.
 Trade Unions of Workers and Employers' Organizations• 73

consultation by the state with all organizations, including those of employers, for
formulation, inter alia, of economic, educational, social and labour policies. Employers'
organizations are, therefore, expected to take a stand consistent with the social and
economic objectives of the community /country as a whole and be active in promoting
policies and measures that are not contrary to the general interest of the community.
Along with their gains, they should keep in view the needs of the developing economy,
the requirements of planned growth, importance of maintenance of peace in industry
and the desirability of an equitable distribution of national wealth. There can, however,
be differences as in the case of trade unions, as to the priority between the interest of the
community and the employers. 44

D. Employers' Federations
1. Employers' Federation of India: The principal objects for which the EFI has been
established are embodied in its constitution. These are :
(i) to promote and protect the legitimate interests of employers engaged in industry, trade
and commerce;
(ii) to maintain harmonious relations between management and labour and to initiate and
support all well-considered schemes that would increase productivity and at the same
time, give labour a fair share of the increased return;
(iii) to collect and disseminate information affecting employers and to advise members on
their employer-employee relations and other ancillary problems.
These objects lie within the field of 'industrial relations'. Although consideration of
broad economic problems is not altogether excluded, the EFI does not generally comment
on commercial questions of customs, taxation and the like which lie in the sphere of the
Associated Chambers of Commerce and Industry. 45
2. The All India Organization of Employers : The objects of the AIOE inter alia include:
(i) To take all steps which may be necessary for promoting, supporting or opposing
legislative and other measures affecting or likely to affect directly or indirectly,
industries in general, or particular industries;
( ii) To nominate delegates and advisors, etc., to represent the employers at the International
Labour Conference, United Nations Organization, International Chamber of Commerce
and other conferences and committees affecting the interests of trade, commerce and
industries, whether as employers or otherwise;
(iii) To promote and support all well-considered schemes for the general uplift of labour
and to take all possible steps to establish harmonious relations between capital and
labour". 46
3. The All India Manufacturers' Organization: The objectives of the AIMO are :
(i) To help in bringing about rapid industrialization of the country through sound and
progressive economic policies;
(ii) To help in increasing the aggregate wealth of India;

44 Ibid.
45 Supra note 41.
46 Ibid.
7 4 • Industrial Relations and Labour Laws

(iii) To raise the standard of living of the people of India by utilizing to the fullest possible
extent all the available national resources and talent in the country; and
(iv) To play a positive role in relieving the pressure of population on land.
The industrial relations functions of the AIMO are similar to those of the EFI and
AIOE. All these federations function through their regional offices.
4. Council of Indian Employers: The Council of Indian Employers founded in 1956
is responsible for choosing delegates to represent Indian employers in international
conferences/ committees. It is this Council which is a member of the International
Organization of Employers at Brussels in place of the AIOE and the EFI. The period since
Independence is thus particularly important because of the joint approach by employers
to deal with labour problems, informally in the first half and somewhat more formally in
the second. Building up of adequate specialized advisory services in labour matters and
training of management and personnel officers at various levels have been the result of this
joint approach, although a beginning in this direction had been made earlier by individual
industrial associations. 47
5. Federation of Indian Chambers of Commerce and Industry (FICCI): FICCI was
established in 1927. It is the largest and oldest apex business organization in India with a
nationwide membership of over 1,500 corporates and 500 chambers of commerce. Its activities
are representative, legislative and promotional. The Federation is represented in various
advisory committees appointed by the government. It also provides training programmes
and organizes seminars and conferences. It works with the government on policy issues
and on enhancing efficiency, competitiveness and expanding opportunities for industry.
6. The Associated Chamber of Commerce and Industry of India (ASSOCHAM): The
membership of ASSOCHAM is confined to local chambers of commerce. It provides advisory
service on labour matters. It has been given representation on many consultative bodies set
up by the government.
7. Standing Conference of Public Enterprises (SCOPE): It is one of the three constituents
of the Council of Indian Employers and is a member of the International Organization of
Employers. It represents employers at various tripartite forums and committees. It has
representations on the boards of Central Provident Fund, the Employees' State Insurance
Board, National Apprentices Board, National Workers' Education Board, National
Productivity Council and many other committees/boards. It also represents employers
at ILO conferences. The main tasks of SCOPE are both internal and external to the public
sector. Internally, it endeavours to assist the public sector in such ways so as to improve
its performance. Externally it seeks to provide required information and assist the public
sector to improve its performance and advise the community and the government in order
to help public sector in its role.

47 Ibid.
Judicial Delineation
of Statutory
Definition of Trade
Union and Trade
Dispute 5
Until 1926, no legislative attempt was made in India to delineate the contours of the
expression 'trade union' or any of its synonyms. In 1926, Section 2(h) of the Trade Unions
Act, 1926, inter alia, defines a 'Trade Union' to mean:

Any combination, whether temporary or permanent, formed primarily for

the purpose of regulating the relations between workmen and employers or
between workmen and workmen, or between employers and employers, or
for imposing restrictive conditions on the conduct of any trade or business,
and includes any federation of two or more trade unions.
The dimensions of the aforesaid definition determine the permissible area of trade
union activities. An analysis of the above definition reveals that a trade union: (i) must
be a combination; (ii) such a combination should be either temporary or permanent; and
(iii) should include any federation of two or more trade unions. Further, the definition
recognizes that the objectives under its constitution are one or more of the following: (a)
to regulate the relations: (i) between workmen and employers; (ii) among workmen; or
(iii) among employers; (b) to impose restrictive conditions on the conduct of any trade or
business. But it shall not affect: (i) an agreement between parties as to their own business;
(ii) agreement as to employment; (iii) agreement in consideration of sale of the goodwill
of a business or profession, trade or handicraft. 1
A delineation of the nature of trade unions requires description of: (1) the person who
can become member of a trade union; (2) the place in relation to which trade unions are
formed; and (3) the objectives of trade union. Let us now examine each of them.

1 See proviso to Section 2(h} of the Trade Unions Act, 1926.

7 6 • Industrial Relations and Labour Laws

The Trade Unions Act, 1926, does not specifically provide persons who may be a member of
a trade union2 • However, the regulations framed under the Trade Unions Act, 19263 make
it clear that the trade union may either be formed by workmen or employers. Section 2(h)
of the Act and other provisions also confirm this view. It is therefore, necessary to delineate
the contours of the expression 'workmen' and 'employers'.

A. Workmen
In the traditional sense4, trade union is used to denote the union of workmen. Further, the
workmen constitute the major part of a trade union. It is, therefore, necessary to ascertain
its meaning. The term 'workmen' has not been independently defined in the Trade Unions
Act. But in the definition of the term 'trade dispute' in Section 2(g), the definition of the
term 'workmen' is found which says:
All persons employed in the trade or industry whether or not in the
employment of the employer with whom the trade disputes arise.
Broadly speaking, workmen must be: (a) persons; (b) employed; (c) in any trade or
industry; (d) to do work.
The definition of the term 'workmen' however raises various problems: First, whether
the persons other than those who are employed to do any skilled or unskilled, manual,
supervisory, technical or clerical work may be covered within the meaning of the word
'workmen'? Second, whether the 'workmen' may be persons: (a) who are subjected to Army,
Air Force or Navy Act; or (b) who are employed in the police service or as officers or other
employees of a prison; or (c) who are employed mainly in a managerial or administrative
capacity or exercise functions mainly of managerial 'nature'? Third, whether the gratuitous
workers may indulge in trade unions? Fourth, whether there should be a contract of
employment between 'employers' and 'workmen'? Fifth, whether there is any age restriction
for becoming a member of a trade union? Sixth, whether badli workers are workmen? Seventh,
can the dismissed, discharged or retrenched worker become member of a trade union? Let
us turn to examine these issues.
As to the first, it is significant to note that the term 'workmen' as defined in the Trade
Unions Act, 1926 has a wide coverage and is not merely confined to only those persons who
are employed to do any manual, skilled, unskilled, supervisory, technical, operational or
clerical work. In other words, all persons employed to do any kind of work may be covered
within the definition of 'workmen' provided they are employed in any trade or industry.
The second problem may conveniently be divided in two categories. The employees
of the first category, namely: (i) those who are subject to the Army, Air Force and Navy
Act or (iz) those who are employed in the police service or as officers or other employees
of a prison are not covered within the meaning of the term 'workmen' because they are

2 Out of 402.3 million workers in terms of 2001 census, only 8. 93 million were members of reporting
registered trade unions during 2006.
3 See for instance, Entry 4 of Form A; Application for registration of trade union prescribed under
the Central Trade Unions Regulations, 1938.
4 According to Sydney and Beatrice Webb in History of Trade Unions, 'a Trade Union is a continuous
association of wage earners for the purpose of maintaining the conditions of their lives.'
 Judicial Delineation of Statutory Definition of Trade Union and Trade Dispute • 77

not employed in the trade or industry. The employees of the second category, namely:
(i) those who are employed mainly in the managerial or administrative capacity; or (iz) those
who are employed in the supervisory capacity exercising functions mainly of managerial
nature may conveniently be brought within the preview of 'workmen' provided they are
employed in any 'trade' or 'industry'.
As to the third problem, it may be said that the definition of 'workmen' covers even
gratuitous workers. It may, therefore, be possible for them under the Trade Unions Act,
1926 to be members of a trade union.
The fourth problem requires careful scrutiny. According to the definition, it is not
necessary that there should be a contract of employment between the 'employer" and
'workmen'. Indeed, the courts emphasize that an 'employee' does not cease to be an
'employee' merely because he is employed through intermediaries.
Section 21 A (1) (z) of the Trade Unions Act, 1926 sheds sufficient light on the fifth
problem. It, inter alia, provides that a person who has attained the age of 15 years, may be a
member of registered trade unions unless the rules of trade unions provide otherwise. But
a person who has not attained the age of 18 years can neither be an office-bearer of any such
trade union nor can he be chosen a member of the executive of the unions. 5

Formation of Trade Union by Bad/iWorkers

As to the sixth problem, the Andhra Pradesh High Court in Panyam Cement Employees Union
v. Commr. of Labour6 held that badli workmen are 'workmen' and, therefore, if management
disapproves of a trade union of badli workers or discourages badli workers to join a trade union
or denies voting right to badli workers, the same would amount to unfair labour practice.
The last problem requires due consideration. The definition unlike the Industrial
Disputes Act, 1947, does not specifically include the dismissed, discharged or retrenched
workers in its fold. Indeed, the use of the expression 'employed in the trade or industry'
occurring in Section 2(g) of the Act and the expression 'union of workers engaged in industry
occurring in Form A of the Central Trade Unions Regulation, 1938, make it highly doubtful
whether the dismissed, discharged or retrenched workmen may be covered in the definition
of 'workmen'.
It has been observed7 that the definition brings under the term 'trade union' not only
combination of workmen, but also combination of employers such as employers' federation
(or union of employers) or a combination of employers in any industry, imposing restrictions
on the members in respect of prices to be charged from the customers, since one of the
principal objects of the latter is to regulate the relations between employers. The Trade Unions
Act, 1926, therefore, applies to employers' federation as it does to unions of workmen. It
is, therefore, essential to know its coverage. The Trade Unions Act, 1926, does not define
the term 'employer'. However, Section 2(g) of the Industrial Disputes Act, 1947, defines an
'employer' to mean: (z) in relation to an industry carried on by or under the authority of any
deparbnent of the Central Government or a state government, the authority prescribed in
this behalf, or where no authority is prescribed, the head of the deparbnent; (iz) in relation

5 See Section 21 A.
6 (2004) 1 LLJ 915.
7 Radkhakishan Jaikishan Ginning and Pressing Factory v Jimnadas Nursery Ginning and Pressing Co. Ltd,
AIR 1940 Nagpur, 228.
7 8 • Industrial Relations and Labour Laws

to an industry carried on by or on behalf of a local authority, the chief executive officer of

that authority.
In Western India Automobile Association Ltd v. Industrial Tribunal,8 the Federal Court
held that statutory definition is not exhaustive. Observed Justice Mahajan:
In relation to (industries carried on by government or local authorities only) a
definition has been given of the term'employer' ... No attempt, however, was made
to define the term 'employer' generally or in relation to other persons carrying on
industries or running undertakings. The proposition has since been not challenged
though, paradoxically, the provisions of the Industrial Disputes Act, 1947, have
never been invoked to the industrial disputes arising in 'an industry carried on by
or under the authority of any deparbnent of the Central or a State Government.'
An' employer' does not cease to be an'employer' merely because instead of employing
workmen himself, he authorizes his agent or servant to employ them. 9 However, in view
of the provisions of Section 18 of the Industrial Disputes Act, 1947, the coverage of the
expression 'employer' has been extended to include his heirs, successors and assignees.

Formation of a Trade Union by Supervisors and Managers

Can the supervisory officers and managers form a trade union under the Trade Unions
Act? This question arose in Government Tool Room and Training Centre's Supervisors and
Officers Association v. Assistant Labour Commissioner. 10 In order to deal with the issue, the
court referred to the provisions of Section 2(g) of the Trade Unions Act which defines trade
dispute to mean any dispute between employers and workmen or between workmen and
workmen, or between employers and employers which is connected with the employment
or non-employment or the terms of employment or the conditions of labour, of any person
and 'workmen' means all persons employed in trade or industry whether or not in the
employment of the employer with whom the trade dispute arises.
It also referred to the provisions of Section 2(h) of the Trade Unions Act which defines
'trade union' to mean any combination, whether temporary or permanent, formed primarily
for the purpose of regulating the relations between the workmen and employers or between
workmen and workmen, or between employers and employers, or for imposing restrictive
conditions on the conduct of any trade or business and includes any federation of two or
more trade unions.
While interpreting the scope of the aforesaid two definitions, the Karnataka High
Court observed that the word 'workmen' under the Trade Unions Act includes all persons
employed in a trade or industry. It is not a restricted definition as in any other enacbnent
of labour laws. When the Act itself provides for wider definition and for a wider meaning,
the court cannot narrow it down by its decision. That would be against the very object of
the Trade Unions Act itself. The court added that it is a well-settled principle of law that two
conditions are necessary for interpreting an earlier enacbnent in the light of the provisions
of a later Act. They are: (i) the two Acts of the legislature must be in, pari materia, that is to
say that they form a system or code of legislature; and (iz) the provisions in the earlier Act
are ambiguous.

8 Western India Automobile Association Ltd v. Industrial Tribunal, (1949) LLJ 245 (FC}.
9 Purushottam Pottery Works, (1958) 2 LLJ 523 (IT); Bombay Dock Labour Board and the Stevedores, (1953)
2 LLJ 200 (IT}.
10 (2002} Lab. IC 103.
 Judicial Delineation of Statutory Definition of Trade Union and Trade Dispute • 79

After having discussed as to who may become the members of a trade union, it is necessary to
determine the area in which the trade unions operate. The arena of interaction of trade union
is 'trade or industry'. The Trade Unions Act, 1926, however, does not spell out either the term
'trade' or 'industry'. A question, therefore, arises whether the Trade Unions Act, 1926 is in
pari materia with the Industrial Disputes Act, 1947. The Madras High Court11 has answered
it in negative 12 because in its view, a comprehensive meaning of the term 'industry' was
considered by the legislature in re§ard to the Industrial Disputes Act. On the other hand, the
Andhra Pradesh13 and Karnataka 1 High Courts have taken the view that two enacbnents are
in pari materia and that the expression 'trade or industry' in Section 2(g) of the Trade Unions
Act carries the same meaning as the word 'industry' in Section 2 G) of the Industrial Disputes
Act. There is, however, no decision of the Supreme Court on this point. Section 2 G) of the
Industrial Disputes Act, 1947, however, defines the term, 'Industry' to mean:

any business, trade, undertaking, manufacture or calling of employers and

includes any calling services, employment, handicraft, or industrial occupation
or avocation of workmen.
The words used in the above definition are of very 'wide import'. It will be observed that
the word 'industry' is wide enough to include 'trade' in its ambit. It will be further noticed
that the definition is in two parts. The first part defines 'industry' with reference to employers
and the other part defines it with reference to workers. The words occurring in the definition
are vague and have given rise to several disputes. Courts and tribunals have, therefore, been
called upon to interpret and apply the key expression on innumerable occasions.
An analysis of judicial response relating to the Trade Unions Act, 1926, reveals that the
several organizations such as Employees' State Insurance Corporation,15 Provident Fund

11 Rangaswami v. Registrar of Trade Unions, AIR 1962 Madras 231.

12 1 am very doubtful whether at all it could be said that the Industrial Disputes Act and the Trade
Unions Act form as it were, a system or code of legislation so that either could be read together as
pari materia, that is, as forming one system and interpreting one in the another. See supra note 11.
13 TT Devasthanam v. Commissioner of Labour, (1979) 1 LLJ 448.
14 CM T Institute v. Assistant Labour Commissioner, (1979) 1 LLJ 192.
15 Registrar of Trade Unions v. Mihir Kumar Gooha, AIR 1963, Cal 56. In this case a question arose whether
employees of Employees' State Insurance Corporation could form a 'trade union' under the Trade
Unions Act. The Registrar on an application made by the employees for registration first registered
it but later cancelled its registration. Against the latter order of cancellation, an appeal was filed
before the appellate court. The court set aside the order of the registrar cancelling the certificate of
registration. Against this decision they preferred a Letters Patent Appeal before the division bench
of the Calcutta High Court. The Division Bench, upholding the order of the single judge, observed:
In my opinion, this test may well be applied to the expression industry as also 'trade' or 'business'
as used in the Trade Unions Act. In this Act also, profit motive is not essential and providing of
amenities or services to the community or a substantial portion of it would be sufficient to satisfy the
test. The fact that such services are to be rendered by a statutory corporation makes no difference.
The fact that a large number of employees are employed by an employer, to render services for
particular class of persons in an organized manner is quite sufficient to bring the corporation within
the mischief of the Act. The employees of such a corporation are, 'workmen' as defined in Section 2
(g) of the Trade Unions Act and are entitled to form a trade union and get it registered. The Court
added the learned judge below had come to the right conclusion and rightly set aside the order of
cancellation passed by the registrar of trade unions.
80 • Industrial Relations and Labour Laws

Organization,16 Fire Brigade Service,17 Devasthanam,18 CMT Institute 19 have been held to
be trade or industry under Section 2G) of the Industrial Disputes Act, 1947 and the Trade
Unions Act, 1926.
On the other hand, persons employed in the following are not employed in 'industry',
e.g., Raj Bhawan,2° educational institutions run by Ramakrishna Mission,21 Pasteur Institute
of Southern India and the Council of Scientific and Industrial Research,22 sovereign or legal
functions23 of the state and a temple managed by trustee of a Devaswom governed by the
Hindu Religious and Charitable Endowment Act, 1951.24

16 Registrar ofTrade Unions v. M Mariswami, (1973} 2 LLJ 256. In this case, the employees of the Provident
Fund Organization made an application to the registrar of trade unions for the registration of its
trade union called the Mysore State Provident Fund Employees Union under the Trade Unions Act,
1926. The registrar of trade unions first issued a certificate of registration but later, after issuing a
show cause notice, withdrew its registration certificate. On appeal, the district court allowed the
appeal and set aside the order of the registrar. In a revision petition against the order of the district
court, the High Court observed:
... As the activity of the Provident Fund Organization is 'industry', the members of the union,
who are its employees have to be regarded as workmen. As the union was formed primarily for
the purpose of regulating the relations between the workmen and its employer, it is a trade union
as defined in Section 2(h} of the Act.
17 Registrar of Trade Unions v. Fire Service Workers Union (1963} 1 LLJ 167. In this case, the employees
of the Fire Brigade Services formed a union and applied for its registration to the registrar of trade
unions. The registrar first registered the union but later cancelled the certificate of registration after
giving the notice. Against this order, the union filed an appeal to the High Court. The High Court
held that employees employed in Fire Brigade Services were employed in 'trade or industry' and
were entitled to be registered under the Trade Unions Act, 1926.
18 TT Devasthanam v. Commissioner of Labour, (1979) 1 LLJ 192.
19 The Karnataka High Court in CM T Institute v. Assistant Labour Commissioner, (1979) 1 LLJ 192
applied and extended the definition of 'industry' under the Industrial Disputes Act, 1947 in
interpreting the word 'trade or industry' occurring in section 2(g) of the Trade Unions Act,
1926. The Court also pointed out that there was no difference between the meaning of the word
'industry' as defined in section 20) of the Industrial Disputes Act and the word 'trade or industry'
as used under section 2(g) of the Trade Unions Act. The Court also held that the word 'trade or
industry', even without elaborate definition of the word 'industry' under the Industrial Disputes
Act, was sufficiently wide enough to bring the Society of Central Machine Tool Institute within
the definition of 'trade or industry' notwithstanding the fact that it had no profit motive.
20 Rangaswami v. Registrar of Trade Unions, AIR 1962 Madras 231. In this case it was held that persons
employed in Raj Bhawan for domestic and other duties could not form trade union on the ground
that workers were not employed in trade or industry carried on by the employer. The services
rendered by them were purely of a personal nature. A union of such workers was not, therefore,
entitled for registration under the Trade Unions Act, 1926.
21 N Karappann v. Additional Registrar of Trade Unions, (1976). Lab. IC 1388, 1389-90. But in Bangalore
Water Supply and Sewerage Board v. A Rajappa, AIR 1976 SC 548, the Supreme Court held that Research
Institute, irrespective of profit motive, was an 'industry'.
22 Ibid.
23 Bangalore Water Supply and Sewerage Board v. Rajappa, AIR 1978 SC 548.
24 Cherinjumpatty Tharipuratty v. State of Kerala, (2005) 1 LLJ 32.
 Judicial Delineation of Statutory Definition of Trade Union and Trade Dispute • 81

The Trade Unions Act, 1926 prescribes the primary objectives of a trade union. The objectives
are one or more of the following:
(a) to regulate the relations: (z) between employers; (ii) among workmen; or (iii) between
employers and workmen.
(b) to impose restrictive conditions on the conduct of any trade or business.
The objectives for which the trade union is formed must comply with the aforesaid
primary objects. In other words, the primary objects of trade unions determine whether the
union is a trade union under the Act. The statutory provisions 'for only primary objectives
in the Act, however, suggests that there may be some objectives other than the primary
objectives of trade unions. These objectives may be broadly categorized as follows: (i)
economic objectives; (ii) political objectives; and (iii) social and welfare objectives. This view
is fortified by the provisions of section 15 of the Act.

'Trade dispute' is defined in Section 2(g) of the Trade Unions Act, 1926 to mean:
any dispute between employers and workmen, or between workmen and workmen, or
between employers and employers which is connected with the employment or non-
employment, or the terms of employment or the conditions of labour, of any person,
and 'workmen' means all persons employed in trade or industry whether or not in
the employment of the employer with whom the trade dispute arises:
Reading the definitions of 'trade union' and 'trade dispute' it is evident that any dispute,
inter alia, between the employer and workmen connected with the employment or
non-employment, terms of employment or conditions of labour of any person would
be a trade dispute and the term 'workman' includes all persons employed in the trade
or industry. Any dispute between badli workers and the management is also a trade
dispute. It is for this reason that when there was a settlement between the Mazdoor
Union and Panyam Cement Co. in June, 2000, both the parties agreed on certain terms
regarding assured employmentto badli workers. In that view of the matter, badli workers
cannot be excluded from participating in the election to recognize the majority trade
union. Any other interpretation would lead to badli workers to lurch in helpless state
of suspended animation. 25

25 Panyan Cement Employees Unian v. Commissioner of Labour, Hyderabad, (2004) 1 LLJ 915.
Registration of
Trade Unions 6
The Trade Unions Act, 1926, was enacted with a view to encourage the formation of
permanent and stable trade unions and to protect their members from certain civil and
criminal liabilities. The registration of a trade union is, however, not conclusive proof of its
existence. 1 The Societies Registration Act, 19602, Co-operative Societies Act, 19123 and the
Companies Act, 19564 do not apply to trade unions and registration thereof under any of
these Acts is void ab initio.5

Every registered trade union is a body corporate by the name under which it is registered
and 'shall have perpetual succession and a common seal6 with a power to sue and to be
sued.'7lt is, however, not a statutory body. It is not created by statute or incorporated in
accordance with the provisions of a statute. In other words, a registered trade union is
neither an instrumentality nor an agency of the state discharging public functions or public
duties. 8 A registered trade union is an entity distinct from the members of which the trade
union is composed. It has a power to contract and to hold property-both moveable and
immovable and to sue and be sued by the name in which it is registered. It can institute
a suit in forma pauperis within the meaning of Order XXXIII Rule 1 of the Civil Procedure
Code. 9 However, by mere registration of a trade union under the Trade Unions Act, the

1 Kandan Textile Ltd v. Industrial Tribunal, AIR 1951 Mad. 661.

2 XXI of 1860.
3 11 of 1912.
4 1 of 1956.
5 Section 14.
6 Section 13.
7 Radhakishan Jaikishan Ginning and Pressing Factory v. Jamnadas Nursery Ginning and Pressing Company
Ltd, AIR 1940 Nagpur 228.
8 Chemosyn Pvt. Ltd v. Kerala Medical and Sales Representative's Association 1988 Lab. IC 115.
9 East Indian Coal Co. Ltd v. East Indian Coal Co. Ltd Workers' Union, AIR. 1961 Pat 51.
84 • Industrial Relations and Labour Laws

trade union does not become an authority under Article 12 of the Constitution of India. It
continues to remain just a private body and all disputes relating to election of such a private
body cannot be canvassed or challenged in a writ petition. 10

Under the Act, the registration of trade union is not compulsory but is merely voluntary.
The question of voluntary registration is, however, debatable. Two conflicting views are
discernible: (z) Compulsory registration would prove burdensome and expensive. It is felt
that the present legal position should continue. The provisions of the Trade Union Act, 1926
itself affords legal status and protection to trade union members which will encourage trade
unions to get themselves registered; (ii) The registration of trade unions should be made
compulsory because all the unions shall be governed by the provisions of the Act and the
rules framed thereunder in a similar manner. This view was also shared by the National
Commission of Labour. The Commission is of the view that the registration of trade unions
should be made compulsory 'because it will bring the application of same standards of
obligation to all unions'.11 The second view seems to be better. It will not only bring the
application of uniform standards and obligation to all unions, but would prevent 'fraud,
embezzlement or deception practised upon members by unscrupulous persons.' Further,
it will result in qualitative improvement of their organization and functioning. Moreover,
it will strengthen the trade union movement. This should however, be done in stages. To
begin with, it would be better if registration of trade unions is made compulsory for the
purposes of their recognition.

Section 3 empowers the appropriate government12 to appoint a person to be the Registrar 13

of Trade Unions. The appropriate government is also empowered to appoint as many
additional and deputy registrars of trade unions as they think fit. Such persons will function
under the superintendence and direction of the Registrar. He exercises such powers and
functions of Registrar with local limit as may be specified. Where, however, additional or
deputy registrar exercises the powers and functions of Registrar in the area within which a
registered office of the trade union is situated, he shall be deemed to be Registrar.

10 KV Sridharan v. S Sundarmoorthy, 2009 LLR414.

11 Govt. of India, Report of the National Commission on Labour (1969) 295.
12 Under Section 2 of the Trade Unions Act, 1926, the Central Government is the appropriate
government in relation to trade unions whose objects are not confined to one state. The state
government is the appropriate government in relation to other trade unions. However, in practice,
the Act is implemented by the state government. The powers of the Central Government were
delegated to the state governments.
13 Section 2(f) defines 'Registrar' to mean:
(i) a Registrar of Trade Unions appointed by the appropriate government under Section 3, and
includes any additional or deputy registrar of trade unions and (fr) in relation to any trade union,
the Registrar appointed for the State in which the head or registered office, as the case may be,
of the trade union is situated.
 Registration of Trade Unions • 85

A. Who may Apply: Minimum Membership of Trade Unions

1. Legislative Response: Under section 4(1):
Any seven or more members of a trade union may by subscribing their names to the rules
of trade union and by otherwise complying with the provisions of this Act with respect to
registration, apply for registration of the trade union under this Act.
Provided that no trade union of workmen shall be registered unless at least 10 per
cent or 100 of the workmen, whichever is less, engaged or employed in the establishment
or industry with which it is connected are the members of such trade union on the date of
making application for registration:
Provided further that no trade union of workmen shall be registered unless it has on
the date of making application not less than seven persons as its members, who are workmen
engaged or employed in the establishment or industry with which it is connected. 14
Where an application has been made under sub-section (1) for the registration of a
trade union, such application shall not be deemed to have become invalid merely by reason
of the fact that, at any time after the date of the application, but before the registration of the
trade union, some of the applicants, but not exceeding half of the total number of persons
who made the application, have ceased to be members of the trade union or have given
notice in writing to the Registrar dissociating themselves from the application. 15
The Supreme Court in Tirumala Tirupati Devasthanam v. Commissioner of Labour16 held
that any group of employees may be registered as a trade union under the Act for the purpose
of regulating the relations between them and their employer or between themselves. The
Court added:
It would be apparent from this definition that any group of employees which
comes together primarily for the purpose of regulating the relations between them
and their employer or between them and other workmen may be registered as a
trade union under the Act. It cannot be disputed that the relationship between
the appellant and the workmen in question is that of employer and employee.
The registration of the association of the said workmen as a trade union under
the Act has nothing to do with whether the said wings of the appellant are an
'industry' or not. We are, therefore, of the view that the High Court went into
the said issue, although the same has not arisen before it. Since the findings
recorded by the High Court on the said issue, are not germane to the question
that falls for consideration before us, we express no opinion on the same and
leave the question open.
Earlier in Registrar of Trade Unions in Mysore v. M Mariswamy 17, the employees of the
Provident Fund Organization got themselves registered under the Trade Unions Act, 1926.

14 Section 4(1).
15 Section 4(2).
16 (1995) Supp (3) sec 653.
17 (1974) Lab IC 695.
86 • Industrial Relations and Labour Laws

This registration was subsequently withdrawn by the deparbnent resulting in litigation

which ultimately reached the Karnataka High Court. It was held by the court that from the
definition of the expression 'trade union', it could be a combination either of workmen or
of employees or of both, provided it is formed primarily for one of the purposes mentioned
in clause (h) of Section 2 of the Act. It is, therefore, possible to have a trade union consisting
only of employers. The emphasis in Section 2(h) is on the purpose for which the union is
formed and not so much on the persons who constitute the union. The court accordingly
directed the registrar to register the petitioner who fulfils all other legal requirements in
terms of the Trade Unions Act, 1926.
It is submitted that under the Trade Unions Act, 1926, both employers and workers
can get themselves registered. Indeed both Section 2(g) and 2(h) refer to the employer. One
may wish to add that the attention of the court was not drawn to this aspect.
2. Registration of Trade Unions in Unorganized Sector: The (Second) National Commission
on Labour has recommended that trade unions of workers in the unorganized sector should
be registered even where there is no employer-employee relationship or such relationship
is not clear.

B. Whom to Apply?
Section 5 requires that every application for registration must be sent to the Registrar of
Trade Unions.

C. Form for the Application

Section 5 requires that every application for registration made to the Registrar must be in
Form 'A'. Further, every application must be accompanied with a statement of the following
particulars, namely: (a) the names, occupations and addresses of the members making the
application. However, in the case of a trade union of workmen, the names, occupations, and
addresses of the place of work of the members of the trade union making the application. 18
(b) the name of the trade union and the address of its head offices and (c) the title, names,
ages, addresses and occupations of the office bearers of the trade union. Moreover, every
application must be accompanied by a copy of rules. Such rules must comply with the items
mentioned under Section 6 of the Act. Furthermore, the trade union of more than one year
standing applying for registration is required to submit a general statement of its assets and
liabilities in the prescribed manner to the Registrar. 19 Moreover, a trade union (which had
previously been registered by the registrar in any state) applying for registration is required
to submit with its application a copy of certificate of registration granted to it and copies of
entries to it to the Registrar of Trade Unions for the state.20

D. Rules of a Trade Union

Section 6 provides that no union can be registered unless its constitution provides for the
following items, namely:
(a) the name of the trade union;

18 Ins. by Act No. 31 of2001 w.e.f. 9-1-2002.

19 Trade Unions Act, 1926, Section 5(2).
°
2 Central Trade Union Regulation, 1938, Rule 7.
 Registration of Trade Unions • 87

(b) the objects for which the trade union has been established;
(c) the whole of the purposes for which the general funds of a trade union shall be
applicable, all of which purposes shall be purposes to which such funds are lawfully
applicable under this Act;
(d) the maintenance of a list of the members of the trade union and adequate facilities for
the inspection thereof by the office-bearers and members of the trade union;
(e) the admission of ordinary members who shall be persons actually engaged or employed
in a trade or industry with which the trade union is connected and also the admission
of the number of honorary or temporary members as office-bearers, required under
Section 22 to form the executive of the trade union;
(ee) the payment of a minimum subscription by members of the trade union which shall
not be less than:
(i) one rupee per annum for rural workers;
(ii) three rupees per annum for workers in other unorganized sectors; and
(iii) twelve rupees per annum for workers in any other case.
(f) the conditions under which any member shall be entitled to any benefit assured by
the rules and under which any fine or forfeiture may be imposed on the members;
(g) the manner in which the rules shall be amended, varied or rescinded;
(h) the manner in which the members of the executive and the other office-bearers of the
trade union shall be appointed and removed;
(hh) the duration of period being not more than three years, for which the members of the
executive and other office-bearers of the trade union shall be elected;
(i) the safe custody of the funds of the trade union, and annual audit, in such a manner as
may be prescribed, of the accounts thereof, and adequate facilities for the inspection
of the account books by the office-bearers and members of the trade union; and
(j) the manner in which the trade union may be dissolved.

a. Nature and Scope of Rules

The existence of the aforesaid matters in the rules is a condition-precedent for the registration
of the union. But, the fact that section 6 provides that no union can be registered unless
its rule provides for these matters does not necessarily mean that rules relating to matters
contained in section 6 acquire a statutory force. They have only contractual force. 21 Thus,
the rules framed by trade unions under section 6 of the Trade Unions Act, 1926 are rules
meant for internal administration and, therefore, cannot create any statutory obligation
upon the labour commissioner. It is like bye-laws of a cooperative society or rules framed
by a society for securing registration under the Societies Registration Act, 1860.

b. Amendment in Rules of the Trade Union when not Valid

In B S V Hemantha Rao v. Deputy Registrar, Trade Union 22, the Hyderabad Allwyn Workers'
Union amended its rules appointing its president to act as election officer and empowering

21 Tirlok Nath v. All India Postal Workers Union, AIR 1957 All. 234.
22 (1988) 1 LLJ 83 (AP).
88 • Industrial Relations and Labour Laws

him to nominate all office-bearers, whereas this power is vested with the general body of
the trade union. Even though such amendments were registered by the Registrar of Trade
Union, the Court held the amendments were contrary to the letter and spirit of the trade
union and such a procedure allowing the president to nominate office bearers amounts
to allowing a person to act as a judge in his own cause. Accordingly, it was held invalid.

c. Scope of Section 6(e)

In Bokajan Cement Corpn. Employees' Union v. Cement Corpn. of India Ltd23, a question arose
whether on ceasing to be an employee, one would lose his right to continue as a member of the
trade union. A single judge of the Guwahati High Court answered the question in negative.
But a division bench of the High Court reversed the findings of the single judge on appeal. It
was held that the right to continue as a member of the trade union continues only so long as
an employee is actually employed. Thereupon, the union filed an appeal before the Supreme
Court. The Court held that Section 6(e) only provides for admission of membership of those
who are actually engaged or employed in industry as ordinary members so as to entitle a trade
union to seek registration under the Act and not for automatic cessation of membership. It
does not provide that on cessation of employment, an employee would cease to be a member.

Section 7 empowers the Registrar of Trade Unions to make further enquiries on receipt of an
application for registration to satisfy himself that the application complies with the provisions
of Section 5 or that the trade union is entitled for registration under Section 6.24 Such enquiries
can be made only from the application and not from any other source.25 Further, the Registrar
may require the trade union to change its name if the name of the trade union is identical or
resembling with any other existing trade union. 26 However, he has no power to declare the
election of the office-bearer of a trade union unconstitutional. Further, whenever there is a
dispute between the groups of office-bearers, each claiming itself to be a valid executive, such
dispute is very much falling within the jurisdiction of the competent court of law, and the
Registrar of Trade Unions has no power or jurisdiction to decide the issue.27 But where the
petitioner himself called for an inquiry with regard to the election of new office-bearers of a union
and submits to the jurisdiction of Registrar of Trade Unions, he is stopped from challenging
the jurisdiction of the Registrar if the result of the inquiry happened to be against him.28

Under the Trade Unions Act 1926, the Registrar has no power to verify membership of
registered trade unions. However, Section 28A of the Trade Unions (Amendment) Bill, 1982,

23 (2004) 1 LLJ 197.

24 Trade Unions Act, 1926, Section 7.
25 Kondalnao v. Registrar of Trade Unions, (1952) 1 LLJ. Notes of cases, 15.
26 Trade Unions Act, 1926, Section 7(2).
27 Ratan Kumar Dey v. Union of India, (1991) 2 LLN 506 (Gau.) (DB).
28 R Tanji v. Registrar of Trade Unions, Bihar, AIR 1962 Pat. 338.
 Registration of Trade Unions • 89

empowers the Registrar to verify the membership of registered trade unions and matters
connected therewith and, for this purpose, Registrar shall follow such procedure as may
be prescribed by regulation.

The Registrar of Trade Unions is the authority charged with the duty of administration of the
provisions of the Act. The Registrar is empowered under Section 28 to ascertain who are the
elected office-bearers in order to register their names. However, in making such inquiry, the
Registrar does not perform any quasi-judicial functions; but only administrative functions.
He has no authority to ask any party to lead evidence and to give opportunity to the other
party to cross-examine any witness. Under this concept of a limited administrative inquiry,
the dispute as raised by the rival parties cannot be set at rest. 29
In Ranipet Greaves Employees' Union v. Commissioner of Labour30, the union requested the
labour commissioner to conduct the election of the union as per settlement arrived at under
section 12 (3) of the Industrial Disputes Act. The labour commissioner rejected such a request.
On a writ petition the Madras High Court held that the labour commissioner committed an
error in rejecting such a request. It accordingly directed the labour commissioner to conduct
the union election to elect the representative body which could get recognition from the
management and the right to negotiate with it.
Earlier in H MT Karmika Sangh v. Labour Commissioner31 , the Court held that if a trade
union makes a request to appoint an officer of labour deparbnent as returning officer, as he
considers that it is expedient to do so, he could do so and there is nothing in the Act or rules
which prevents him from doing so. However, the order of the High Court in designation
to the general manager to hold election of the trade union was wrong. Instead, the Court
ordered that the election should be held under the supervision of the Registrar of Trade
Union or his nominee. 32
InJFFCO Phulpur Karmchari Sangh v. Registrar, Trade Union Kanpur, 33 the Allahabad
High Court held that Section 28 (3) of the Trade Unions Act, 1926 read with Regulation
17A does not contemplate holding of any elaborate inquiry such as one required in judicial
or quasi-judicial proceedings. All that the Registrar is required to do is to hold a summary
inquiry for satisfying himself before making any change in the register regarding office
bearers whether the elections have been held in accordance with the rules of the trade union.
In KV Sridharan and Others v. S Sundermoorthy 34, the Madras High Court held that all
disputes relating to holding of election of such incorporated bodies, which are nothing but
private bodies, cannot be challenged before the writ court. If there are disputes between

29 North Eastern Railway Employees' Union v. Registrar of Trade Unions, 1975 Lab. IC 860 (Allahabad);
Mukund Ram Tanti v. Registrar of Trade Unions AIR 1962 Pat. 338, ONGC Workmen's Association v.
State of West Bengal, 1988 Lab. IC 555 (Calcutta).
30 (2004) 2 LLJ 622.
31 (1985) Lab IC 633.
32 North Eastern Railway Employees' Union v. Addl. District Judge, (1989) Lab IC 44 (SC). See also, Indian
Explosive Workers Union v. State of Bihar (1992) 1 LLJ 578.
33 1991 Lab. IC 531.
34 2009 LLR 414.
90 • Industrial Relations and Labour Laws

the parties over such election, those disputes can be challenged, if so advised, before the
appropriate civil court. Since the writ petition itself is not maintainable, this Court held
that no order can be passed in the writ petition on the dispute relating to the election of
such trade union. It may be noted that these private bodies are not enforcing any statutory
direction by filing such writ petitions inasmuch in the State of Tamil Nadu, there is no law
relating to grant of recognition to a trade union, nor is there any law relating to holding of
election of such trade unions. These matters are covered by general law and as such, the
disputes in this regard should be settled by civil court.

In IFFCO Phulpur Karmchari Sangh v. Registrar, Trade Union Kanpur, 35 the Allahabad High
Court held that Section 28 (3) of the Trade Unions Act, 1926 read with Regulation 17A does
not contemplate holding of any elaborate inquiry such as one required in judicial or quasi-
judicial proceedings. All that the Registrar is required to do is to hold a summary inquiry
for satisfying himself before making any change in the register regarding office bearers
whether the elections have been held in accordance with the rules of the trade union.

In Rattan Kumar Dey v. Union of India 36, the Guwahati High Court held that under Section 28
of the Trade Unions Act, 1926, the Registrar of Trade Unions has no power or authority to
decide a dispute between the rival office-bearers of the union. However, Registrar of Trade
Unions under Section 28(4) has the power to make inquiries and give his own conclusion
in regard to maintenance of the office-bearers of the union.
In Ram Das Tigga v. State ofJharkhand 37, the Jharkhand High Court held that the Registrar
of Trade Union cannot resolve the dispute pertaining to election of rival office-bearers of
union. Such dispute can only be decided by civil court of competent jurisdiction.
In Kovai Periyar Maavatta Dravida Panchalai Thozhilalar Munnetra Sangam, Coimbatore
v. Commissioner of Labour (Registrar of Trade Unions), Chennai38, the Madras High Court held
that Section 28 of the Trade Unions Act does not confer any quasi-judicial power to decide
the dispute between the rival claimants and even if any decision is taken, such a decision
does not have any binding force and the dispute between the rival claimants in a union can
be decided by a civil court.
In Roadways Mazdoor Sabha, UP v. State of UP 39, the Allahabad High Court held that
the Registrar has got only limited power to make the necessary entry in his records. Under
Section 28 of the Trade Unions Act, he can record the changes in the office bearers made
by the trade union during the year to which general statements were filed. Thus, he has no
power to adjudicate as to which one of the rival claims is correct.

35 1991 Lab. IC 531.

36 1991 (2) LLN 506; See also North-Eastern Railway Employees' Union, Gorakhpur v. The Registrar of Trade
Unions, UP, Kanpur 1975 Lab. IC 860.
37 (2004) LLR 936.
38 (2004) 1 LLJ 6. Similar view has been expressed in R Murugesan v. Union Territory of Pondicherry,
(1976) 1 LLJ 435 (Mad.). Fateh Singh v. Rashtriya Mill Mazdoor Sangh, 1994 I LLJ 294 (Raj.), and Bokaro
Steel Workers Union and Another v. State of Bihar, 2000 I LLJ 117 (Pat).
39 (2011)1LLJ 239.
 Registration of Trade Unions • 9 l

In Borosil Glass Works Ltd Employees Union v. D D Bombode, 40 the Supreme Court interpreted
Section 28 (1-A) of the Trade Unions Act. In this case, certain workers made a joint application
for membership of the appellant union which is a registered and recognized trade union.
However, no action was taken because the application was not in accordance with the
procedure laid down by the appellant union thereon. The employees were asked by the
union to apply individually in the prescribed form and make payment of requisite fee
and membership subscription. Aggrieved by this, employees filed a complaint before the
Registrar of Trade Unions. Thereupon, the Registrar of Trade Unions under Section lO(b)
of the Trade Unions Act issued a notice to the appellant union threatening to cancel its
registration pursuant to a complaint filed by these employees under Section 28(1-A). The
union then represented its case before the Registrar. The Registrar of Trade Unions found
that the complainants were not members of the appellant union for six months prior to the
date of the application which was a necessary condition under Section 28(1-A). Therefore, no
certificate under that section could be granted to them, permitting them to refer the dispute
to the industrial tribunal. Aggreived by the decision of the Registrar, these employees filed
a writ petition in the Bombay High Court seeking direction to the Registrar of Trade Unions
to issue a consent certificate. The High Court ruled that even a person who has applied to
become a member is covered by Section 28(1-A) of the Trade Unions Act and accordingly,
directed the Registrar of Trade Unions to issue a consent certificate to these employees to
enable them to refer the dispute to the industrial tribunal. This order of the High Court was
challenged by the union before the Supreme Court under Article 136 of the Constitution.
The Supreme Court found the interpretation given by the High Court to Section 28(1-
A) of the Act to be too wide. According to the court, the said provision is to be interpreted
to ensure that internal disputes in trade unions get decided expeditiously but it can be
only invoked by a person who has been a member of such registered trade union for a
period of not less than six months. The court observed that words 'where there is a dispute
on whether or not any person is an office-bearer or a member of a registered trade union'
have to be read along with the words 'any member of such registered trade union for a
period of less than six months'. A person whose application for membership has not been
considered or allowed would not have been a member for six months. The Court held that
the dispute between persons who are not members and the union would not be covered
by Section 28(1-A). Indeed, a dispute between a person who is not yet a member and a
union would not be an internal dispute of the union. The Court added that under Section
28(1-A), the jurisdiction of the civil court is barred only in respect of the matters which have
been referred to an industrial court under Section 28(1-A). But, if a dispute does not fall
under Section 28(1-A), then that dispute can be taken to civil court. Further, in a case like
the present one where the dispute is whether a person should or should not be admitted,
is not a dispute falling under Section 28(1-A) and, therefore, it is open to such person to
approach a civil court for resolution thereof. However, if the law permits, they may also
raise an industrial dispute before the industrial court in this behalf. The Court, accordingly,
set aside the judgement of the High Court.

40 (2001) 1 sec 350.

9 2 • Industrial Relations and Labour Laws

Section 8 lays down the duties of the Registrar in matters of registration of trade union. It
provides that as soon as the Registrar is satisfied that the trade union has complied with all
the requirements of this Act in regard to registration, he shall register the trade union by
entering in a register, to be maintained in such form as may be prescribed, the particulars
relating to the trade union contained in the statement accompanying the application
for registration. This shows that where the definitions under Section 2(g) and 2(h) are
themselves inapplicable to the so called union, the Registrar has every power to refuse
the registrations. 41 Section 8 raises several questions: (z) whether it is obligatory upon the
Registrar to register a trade union within a reasonable time where it has complied with all
the requirements of the Act? (iz) what is the scope of inquiry under this section? (iii) whether
Section 8 contravenes the fundamental right under Article 19(1) (c) of the Constitution? (iv)
whether the Registrar can refuse to register more than one union in one plant/industry?
Let us turn to examine these questions.

A. Time-Limit for Registration

The Trade Unions Act does not prescribe any time-limit for the grant or refusal of registration. It
only imposes a statutory duty upon the Registrar to register a trade union if he is satisfied that
the requirements of the statute have been complied with. The absence of any provisionregarding
the time-limit for grant or refusal raises a question whether the court can interfere in regard to
the time taken by the Registrar in granting or refusing registration of trade union. The decision
in ACC Rajanka Lime Stone Quarries Mazdoor Union v. Registrar of Trade Unions, Government of
Bihar42 has a direct bearing on this question. In this case the union sent an application on 31
July 1957 for registration to the Registrar of Trade Unions in the prescribed manner together
with the constitution and rules of the said union which was received by the latter on 3 August
1957. But no action was apparently taken under Sections 7 and 8 on the application for over 3
months. The union sent many reminders but they remained unreplied. Under the circwnstances,
the union filed a writ petition before the Patna High Court, praying that the Registrar of Trade
Unions be directed to perfonn his statutory duty of registering or refusing to register the trade
union under the Act. The High Court of Patna held that Section 8 imposes the statutory duty
upon the Registrar to register a trade union on being satisfied that it had complied with the
requirements of the Act. The court accordingly held that there was a case for issuance of writ in
the nature of mandamus under Article 226 of the Constitution. The court directed the Registrar
of Trade Unions to perform the statutory duty imposed upon him under Sections 7 and 8 and
to deal with the application of the trade union according to law at an early date.
It is submitted that time limit should be prescribed for the grant or refusal of registration
by the Registrar. The National Commission on Labour has suggested 30 days excluding the
time which the union takes in answering queries from the Registrar. This view is likely to
give some scope to the Registrar to make vexatious inquiries simply to gain time. Indeed,
Section 23 of the Industrial Relations Bill, 2978 prescribed 60 days' time from the date of the
receipt of the application by the Registrar either in granting or refusing to grant registration

41 Tamil Nadu Union v. Registrar of Trade Unions, AIR 1962 Mad. 234.
42 ACC Rajanka Lime Stone Quarries Mazdoor Union v. Registrar of Trade Unions, AIR 1958 Pat. 475.
 Registration of Trade Unions • 93

to trade union and communicating the order to the applicant. Where, however, the Registrar
refuses to grant registration to a trade union, he is under an obligation to state reasons for
refusing to grant registration. The Trade Unions (Amendment) Bill, 1982 has provided for
insertion of the words 'within a period of 60 days from the date of such compliance' after
the words 'Register the Trade Unions' in Section 8 of the Trade Union Act, 1926.

B. Scope of Inquiry Under Section 8

The second problem also requires careful scrutiny. Three pronouncements of Indian judiciary
in regard to the scope of inquiry of Section 8 deserve to be mentioned.
Inland Steam Navigation Workers' Union 43 decided an important point, namely, the scope
of inquiry with reference to the application for registration of trade unions. In this case, an
application made by the Inland Steam Navigation Worker's Union for its registration was
rejected by the Registrar of Trade Unions on the ground that the union was for all practical
purposes the same union which has been registered and, therefore, be declared unlawful
under Section 16 of the Criminal Law (Amendment) Act, 1908. Against this finding, the
appeal was preferred before the Calcutta High Court under Section 11 of the Trade Unions
Act, 1926. Chief Justice Derbyshire, in the course of the judgement observed:
In my view, the Registrar in taking up that attitude is wrong. The functions of
the Registrar are laid down in Section 8... The new union may or may not be a
continuation of the other union or its successor. Whether the new union is or
is not the same as the old union, depends on evidence.
He added:
In my view, the duties of the Registrar were to examine the application and
to look at the objects for which the union was formed. If those objects were
objects set out in the Act, and if those objects did not go outside the objects
prescribed in the Act and if all the requirements of the Act, and the regulations
made thereunder had been complied with, it was his duty, in my view, to
register the union. 44
R K Workmen's Union v. Registrar of Trade Unions, 45 raised an important problem as to
whether the Registrar of Trade Union is under an obligation to hear the then-existing unions
in the field before making the order under Section 8. The High Court of Calcutta answered
the question in negative and observed:
Once, therefore, the Registrar is satisfied that the requirements of the statute
have been complied with, it is obligatory upon him to enter in a register the
applicant-union and he has no obligation to hear the existing unions in the
field before making the order under Section 8.
The Court added:
In fact, the statute does not deal with the matter of registration from the
standpoint of any existing union at all. It is significant to note that though
Section 11 (1) provides a statutory appeal from an order of refusal to register

43 AIR 1963 Cal 57.

44 R K Workmen's Union v. Registrar of Trade Unions, (1968) 1 LLJ 335 (Calcutta).
45 (1968) I LLJ 335 at 337.
94 • Industrial Relations and Labour Laws

a union, there is no provision for an appeal or other remedy against an order

granting registration.
The aforesaid decisions suggest that the only duty of the Registrar is to examine the
application for registration with reference to the provisions of Sections 2(h), 4 to 7 and 15.46
If the Registrar is satisfied that statutory requirements have been complied, he is bound
to register the trade union within a reasonable time. He is under no obligation to hear the
existing trade unions before making the registration under Section 8.
ONGC Workmen's Association v. State of West Bengal47 delineated the nature and scope
of inquiry under Section 8. The Calcutta High Court held that any order passed under
Section 8 by the Registrar must be administrative in nature. The Court also held that the
Registrar is not deemed to be a quasi-judicial authority to decide any disputed question of
fact or law. He has no authority to ask for any of the parties to lead evidence and to give
opportunity to the other party to cross examine any witness. Thus, the scope of inquiry
under Section 8 is very limited.

C. Constitutional Problems in Section 8

Kesoram Rangan Workmen's Union v. Registrar of Trade Union 48 is an important case on this
problem. The Registrar of Trade Unions failed to offer any opportunity to an existing trade
union while registering a new union under Section 8. The question arose whether Section
8 imposed any unreasonable restriction on the fundamental right by not offering a right of
hearing to an existing union. The question was answered in negative by the Calcutta High
Court. In the course of judgement, the Court observed that the freedom guaranteed under
Article 19 (1) (c) of the Constitution belongs to all workmen, so that every workman has the
freedom to form a union of his own choice and to refuse to become a member of any union
which he does not like.49 The Court, therefore, concluded that 'no union can claim a monopoly
or a right to complain if some other union is brought into existence by other workmen'.

D. Registration of One Union in One Industry

It has been seen elsewhere that the Trade Unions Act, 1926, provides that as soon as the
Registrar is satisfied that the trade union has complied with all the requirements in regard
to registration, he shall register the trade union. From this it is clear that the Act does not
empower the Registrar to refuse registration of trade union in cases where one or more
unions are already in existence in the plant/industry. A question, therefore, arises, whether
it is in the interest of trade unions to empower the Registrar to refuse to register a trade
union on the above ground. Two views are discernible:
(i) The Registrar of Trade Unions should be empowered to refuse to register more than
one union in one plant or industry. The reason in that the multiplicity of unions leads
to rivalry among trade unions. This view, is however, open to several objections. First,

46 This duty is, of course, subject to the powers of Registrar laid down in Section 7.
47 ONGC Workmen's Association v. State of West Bengal, (1988) Lab. IC 555 at 560.
48 Kesoram Rangan Workmen's Union v. Registrar of Trade Unions, (1968) 1 LLJ 335,337. See also Survapal
v. Uttar Pradesh Government, AIR 1951 Allahabad 674--698; and OK Ghosh v. EX Joseph, (1962) 2 LLJ
615.
49 Kesoram Rangan Workmen's Union v. Registrar of Trade Unions, (1968) 1 LLJ 335 (Calcutta).
 Registration of Trade Unions • 9 5

this may run contrary to Article 19(1)(c) of the Constitution. Second, the problem of
multiplicity of trade unions may be resolved to a great extent by providing recognition
to a representative union.
(ii) The Registrar of Trade Unions should not be given the power to refuse to register more
than one union because the refusal may infringe Article 19(1)(c) of the Constitution.
The other reason is that recognition of the majority union will, to a great extent, meet
this problem. The second view seems to be a better one.

The certificate of registration issued by Registrar shall be in the prescribed form, i.e., in
Form C of Schedule III and is conclusive evidence to show that the trade union has been
duly registered under the Act. 50 This finality is only for the purposes of the Act and cannot
in any way affect the powers of the High Court under Article 226 of the Constitution as
the provisions of the statute are always subjected to the jurisdiction of the Constitution.51

Section 9-A provides that a registered trade union of workmen shall, at all times, continue
to have not less than 10 per cent or 100 of the workmen, whichever is less, subject to a
minimum of seven, engaged or employed in an establishment or industry with which it is
connected, as its members.52

A. Grounds for Cancellation of Registration

The registration of a trade union may be cancelled by the Registrar on any one of the
following grounds: (i) that the certificate under Section 9 had been obtained by fraud
or mistake; (ii) that the trade union had ceased to exist; (iii) that the trade union had
'wilfully' contravened any provision of the Act even after notice from the Registrar53; (iv)
that a trade union allowed any rule to continue in force which was inconsistent with any
provisions of the Act; (v) that the trade union had rescinded any rule providing for any
material provision which was required by Section 6; (vi) if the Registrar is satisfied that
a registered trade union of workmen ceases to have the requisite number of members.
However, not less than two months' previous notice in writing specifying the ground on

50 Section 9.
51 Inserted by Act No. 31 of 2001 w.e.f. 9-1-2002.
52 Cancellation of registration is illegal on basis of reply by one of disputed members and no finding
as to wilful disobedience of Section 10. [See Ceramic Workers Progressive Union v. Addl. Registrar,
(1994) Lab. IC NOC 66.]
53 New Section 9A inserted by Act No. 31 or 2001 w.e.f. 9-1-2002.
96 • Industrial Relations and Labour Laws

which it is proposed to withdraw or cancel the certificate shall be given by the Registrar
to the trade union before the certificate is withdrawn or cancelled otherwise than on the
application of the trade union. 54
The grounds for cancellation of registration are open to several objections: First, the
term 'wilful' is vague. In practice, it is found that trade unions do not submit their annual
return. The section, however, requires that the default has to be 'wilful'. To establish a
wilful default to the satisfaction of a court is difficult. In view of this, the (First) National
Commission on Labour recommended that where the union failed to submit the annual
return, its registration should be cancelled irrespective of whether the default is 'wilful' or
otherwise. This recommendation should be implemented. Second, it is doubtful whether
the materially defective return should be treated as 'return' under Section 10. In view of
the prevailing ambiguity, the National Commission on Labour suggested that 'materially
defective return' should amount to a default and the union should be under an obligation to
rectify mistakes within the prescribed period failing which the Registrar should be deemed
not to have received the return. 55
The Registrar is not competent to cancel the registration of a trade union, without,
in the first instance, giving to the trade union concerned two months' previous notice in
writing, specifying the grounds on which he proposes to withdraw or cancel the certificate
and giving an opportunity to the trade unions to show cause against proposed action. 56
However, unlike Section 26(3) of the Industrial Relations Bill, 1978, there is no provision that
'while cancelling the certificate of registration of a trade union, the Registrar shall record the
reasons of doing so and communicate the same in writing to the trade union concerned.'
Once the Registrar cancels or withdraws the registration of a trade union, he has no power
to quash that order. Further, he has no power to review it. Moreover, he has no power to
withdraw it because of subsequent events.57

B. Powers of the High Court in Respect of Cancellation of Registration

The Bombay High Court held that the High Court may exercise its powers under Article
226 of the Constitution where the cancellation of the registration of the trade union had
been effected improperly.58 Again, the Gujarat High Court quashed the orders of Registrar

54 The Trade Union (Amendment) Bill, 1982, provides for insertion of new clause (c) after the proviso
to Section 10, namely:
if the Registrar is satisfied that the Trade Union has called for, or participated in, any illegal
strike.
Explanation- For the purposes of this section, 'illegal strike' has the meaning assigned to it in
Section 24 of the Industrial Disputes Act, 1947. See also Government of India, Report of the National
Commission on Labour (1969} 296.
55 Section 10; See also Mysore Iron and Steel Works v. Commissioner of Labour and Registrar of Trade
Unions, (1972} Lab. IC 799. See also Tata Electric Companies Officer Guild v. Registrar of Trade Unions,
(1993} Lab. IC 1849. Tamil Nadu Government Press Workers Sangam v. First Trade Union Addl. Registrar
(Deputy Commissioner of Labour I}, (2004) 1 LLJ 274.
56 Mukund Iron Steel Works Ltd v. V V Deshpande, (1986) Lab. IC 1612 (Bombay).
57 Ibid.
58 Gujarat Rajya Kamdar Sabha v. Registrar under the Trade Unions Act, (1999} LLR 285
 Registration of Trade Unions • 9 7

where no show cause notice was given before cancellation of registration as required under
Section lO(b). 59

C. Powers of the Registrar in Respect of Deregistration

The Registrar is empowered to cancel or withdraw certificate of registration on the
application of the trade union. He is required to: (i) give an opportunity to trade unions
except in case of applications of the concerned trade union; (ii) satisfy himself that any one
of the grounds of cancellation of registration of such trade union exists; and (iii) make such
order which he deems necessary.
The power of cancellation of registration of trade unions also confers an in-built power
to withdraw the order of cancellation. Thus, the Registrar is also empowered to withdraw
the order of cancellation on realization of mistake and on such order, the cancellation
becomes non-est. 60

The Act61 confers right of appeal on persons aggrieved against an order of the Registrar (z)
refusing to register a trade union; or (ii) withdrawing the certificate issued after registration;
or (iii) cancelling the certificate of registration. The Act does not, however, define the word
'person'. In the absence of any definition, Section 3 (42) of the General Clauses Act may
be taken into account for the purposes of the definition of the term. Thus, the 'person'
includes a legal person like a trade union. 62 In an appeal by a trade union, whose certificate
of registration is cancelled, no other trade union has a right to be impleaded as a party. 63

A. Appellate Forum
The appeal may be filed (a) where the head office of the trade union is situated within the
limits of a presidency town to the High Court; (aa) where the head office is situated in an
area falling within the jurisdiction of a labour court or an industrial tribunal, to that court or
tribunal, as the case may be; or (b) where the head office is situated in any other area to such
court, not inferior to the court of an additional or assistant judge of a principal civil court of
original jurisdiction, as the appropriate government may appoint in this behalf for the area.
The expression 'High Court' in Clause (a) above refers to the original side of the High
Court and not to the appellate side. Further, the expression 'Presidency Town' in Clause
(a) refers to the towns where the High Court has original civil jurisdiction. And Section
3(44) of the General Clauses Act (Act X of 1897) defines 'Presidency Town' to mean the
total limits for the time being or the ordinary original civil jurisdiction of the High Court of

59 Association of Engineering Workers v. Dockyard Labours, (1992) 1 Lab. IC 214.

60 Section 11.
61 Mysore Iron and Steel Works Labourers' Association v. Commissioner ofLabour and Registrar Trade Unions,
(1972) Lab. IC 779
62 KSEB v. KSEB Trade Union, (1987) 2 LLN 560.
63 Tamil Nadu Non-gazetted Government Officers Union, Madras v. Registrar of Trade Unions, Madras, AIR
1959 Madras 55.
9 8 • Industrial Relations and Labour Laws

Judicature at Calcutta, Madras or Bombay as the case may be.64 In cases where high courts
are situated outside the presidency town, the high courts have no jurisdiction to entertain
appeals under Section 11 (1) (b).In regard to such areas, any court not inferior to the court
of an additional/ assistant judge of the principal civil court of original jurisdiction, as the
appropriate government may appoint in this behalf for that area, shall have jurisdictions.65

B. Powers of The Appellate Courf 6

The appellate court may either: (i) dismiss the appeal; or (ii) pass an order directing the
Registrar to register trade unions and to issue a certificate of registration under Section 9; or
(iii) set aside the order for withdrawal or cancellation of the certificate as the case may be.
The Registrar is under an obligation to comply with such orders of the appellate authority.

C. Procedure to be Adopted by the Appellate Courf7

The appellate court shall, as far as practicable, follow the same procedure and have the
same powers in respect of the appeal as vested in the civil court while trying a suit under
the Code of Civil Procedure, 1908. Further, it may also determine from whom the whole or
any part of the costs of appeal shall be recovered. Such costs shall be recovered as if they
had been awarded in a civil suit under the code.

D. Second Appeal
The Act68 also confers a right of second appeal on persons whose appeals under Section
11(1) (b) have been dismissed. Such an appeal shall be filed in the high court, and the high
court for the purposes of such an appeal has all the powers of the appellate court. However,
no second appeal shall lie where the high court hears an appeal under Section 11(1) (a).

E. Time for Making an Appeal

The appeal under Section 11 must be filed within such time as may be prescribed under
the rules for the purpose.

A trade union whose certificate of registration has been withdrawn or cancelled, loses its
status as a legal entity under the Act. Upon the cancellation of certificate of registration,
the trade union and its members cease to enjoy the privileges of a registered trade union.

There is no provision in the Act for re-registration of a trade union whose registration has
been cancelled. The National Commission on Labour, therefore, recommended that the
Trade Union Act should provide that any application for re-registration from a union, (the

64 Tamil Nadu Non-gazetted Government Officers Union, Madras v. Registrar of Trade Unions, Madras, AIR
(1959) Madras 55.
65 Section 11(2).
66 Section 11(3).
67 Section 11(4).
68 Govt. of India, Report of the National Commission on Labour, (1969) 297.
 Registration of Trade Unions • 9 9

registration of which has been cancelled) should not be entertained within six months of the
date of cancellation of registrations. 69 Perhaps in view of this recommendation, the Industrial
Relations Bill, 197870 and the Trade Unions (Amendment) Bill, 198271 have provided for
re-registration of a trade union.

Section 2(a) defines 'registered office' to mean the 'office of a trade union which is registered
under the Act as the head office thereof.' And, Section 12 requires that all communications
and notices to a registered trade union may be addressed to its registered office. Further,
notice of any change in the address of the head office shall be given within 14 days of such
change to the Registrar in writing, and the changed address shall be recorded in the register
referred to in Section 8.

A. Change of Name
A registered trade union with the consent of not less than two-third of the total number of
the members may change its name. 72 Notice of the change of name signed by seven members
and the secretary of the trade union changing its name must be sent to the Registrar. 73 The
Registrar, before approving the change of name, has to ascertain that the new name is not
identical with that of any existing trade union known to him, or so nearly resembling such
name as to deceive the public or member. 74 If otherwise, he shall refuse to register the
change of name. On the contrary, if he is satisfied that the provisions of the Act have been
complied with in respect of changing the name, he shall register the change of name in the
register maintained for this purpose.75 The change in the name of registered trade union
neither affects its rights nor obligations nor does it render defective any legal proceedings
by or against the trade union and any legal proceedings which might have commenced or
continued by its new name. 76

69 Section 28 of the Industrial Relations Bill, 1978, (since lapsed owing to the dissolution of the Lok
Sabha), provided the following for re-registration of trade union:
A trade union whose certificate of registration has been cancelled may apply for re-registration
after the expiry of a period of six months from the date of the last cancellation of the certificate of
registration.
70 The Trade Union (Amendment) Bill, 1982, provides for insertion of new Section 1 lA in the Act to
read as follows:
A trade union whose certificate of registration has been cancelled may apply for re-registration to
the Registrar after the expiry of a period of six months from the date of such cancellation:
Provided that where such cancellation is on the ground that such trade union has failed to comply
with any of the requirements provided by or under this Act, it shall not be re-registered until it has
complied with such requirement.
71 Section 23.
72 Ibid.
73 Section 25(1).
74 Section 25(2).
75 Section 25(3).
76 Section 26.
1 oo • Industrial Relations and Labour Laws

B. Amalgamation of Trade Unions

Any two or more registered trade unions may become amalgamated together as one trade
union with or without dissolution or division of funds of such trade unions. This can be
done only if: (z) 50 per cent of the members of each and every trade union entitled to vote
record their votes; (ii) the votes in favour of amalgamation is not less than 60 per cent,77
(iii) notice in writing of amalgamation signed by seven members and the secretary of each
and every registered trade union (which is party to amalgamation) accompanied by such
statement as may be prescribed, is sent to the Registrar of Trade Unions.78 If the aforesaid
requirements are fulfilled, the Registrar after satisfying himself that the provisions of the Act
in respect of amalgamation have been complied with and that the trade union formed thereby
is entitled to registration, he shall register the trade union in the prescribed manner. 79The
amalgamation shall be effective from the date of such registration. The amalgamation shall
not prejudice any right of such trade unions who are parties to it or any right of a creditor
or any of them. 80

C. Dissolution of Trade Unions

When a registered trade union is dissolved, notice of the dissolution signed by the secretary
and seven members must be sent within 14 days of dissolution to the Registrar of Trade
Unions. 81 The notice must be in the prescribed form. The Registrar after satisfying himself
that the dissolution has been effected in accordance with the provisions of the Act makes
the entry in the register maintained by him. 82 Where the rules of trade union contain no
provision for the distribution of funds on dissolution, the Registrar shall divide the funds
in proportion to the amounts contributed by the members by way of subscription during
their memberships. 83

Registered trade unions are required under Section 28: (1) to submit annual returns in the
prescribed form to the Registrar along with an audited statement of income and expenditure
during each year of all receipts and expenditure during the year ending on the 31st day of
December, next preceding such prescribed date; and of the assets and liabilities of trade
union existing on 31st December 84 (2) The general statement should be accompanied by the
statements, (i) showing any change of office bearers made during the year to which general
statement refers; and (ii) a copy of rules of the trade union corrected upto the date of despatch
thereof to the Registrar 85 (3) Every alteration made in the rules of trade union shall be sent

77 Section 24.
78 Section 25(1).
79 Section 25(3).
80 Section 26.
81 Section 27(1).
82 Mysore Iron and Steel Works v. Commissioner of Labour and Registrar of Trade Unions, (1972) Lab. IC
799.
83 Section 27(2).
84 Sub-section (1).
85 Sub-section (2).
 Registration of Trade Unions • 1o1

within 15 days of the alterations. 86 (4) The Registrar or any other duly authorized officer is
empowered to inspect and require production of the certificate of registration, account books,
registers and other documents relating to trade unions for examining the returns submitted
by them. 87 A statement of change of office-bearers under Section 28(2) has to accompany
a general statement as required under Section 28(1). Even if general statement cannot be
prepared under Section 28(1), statement under Section 28(2) can still be re-prepared. 88

A. Failure to Submit Return

In case of failure to submit returns or statements required under Section 28: (i) every
office-bearer; (ii) other persons bound by the rules of the trade union to give or send the
same; or (iii) if there is no such office-bearer or person, every member of the executive of
the trade union shall be punishable with fine not exceeding f5. But if the contravention
is continued after conviction, a further fine not exceeding f5 for each week during
which the default was made shall be imposed. 89 However, the aggregate fine shall not
exceed fS0. 90
The Act provides more deterrent punishment with a fine which may extend upto f500
upon persons wilfully making, or causing to be made any false entry in, or any omission
from the general statement required by Section 28, or in or from any copy of rules or of
alterations of rules or document sent to the Registrar under that section. 91

B. Penalties for Supplying False Information Regarding Trade Unions

Quite apart from penalties mentioned earlier, if any person with intent to deceive or with
like intent gives: (z) to any member of a registered trade union; or (ii) to any prospective
member of such union, any document purporting to be a copy of rules of a trade union or
any alteration of such rules which he knows or has reason to believe that it is not a correct
copy, or (iii) gives a copy of any rules of any unregistered trade union to any person on the
pretence that such rules are the rules of a registered trade union shall be punishable with
a fine which may extend to f200. 92

C. Cognizance of the Offence

Only a presidency magistrate or magistrate of the first class can try any offence mentioned
in Sections 31 and 32 of the Act93 • Similarly, no court shall take cognizance of any offence
unless: (z) a complaint has been made by the Registrar; or (iz) with his previous sanction by

86 Sub-section (3).
87 Sub-section (4).
88 Sagdish Bharti v. Union of India, 1969 Lab. IC 205 (Allahabad}.
89 Section 31(1).
90 Provision to Section 31(1).
91 Section 31(2).
92 Section 32.
93 Section 31(1).
1o2 • Industrial Relations and Labour Laws

any person; or (iii) in the case of any offence under Section 32 by the person to whom such
copy has been given;94 (iv) the complaint is made within six months of the date on which
the offence is alleged to have been committed.

94 Section 32(2).
Members,
Office Holders and
Outsiders in
Trade Unions 7
One of the significant features of Indian trade union movement is outside leadership. The
early trade union movement was led by philanthropists and social reformers. Said the Royal
Commission on Labour in India:

At present, the union depends for their leaders mainly on social workers,
lawyers and other professionals and public men. A few of these have interested
themselves in the movement in order to secure private and personal ends. The
majority, however, are motivated by an earnest desire to assist labour. 1
Since independence, many of them have identified themselves completely with labour
some others have engaged entirely in political activities; still others continue to work both
in political and labour fields.
Several factors have been responsible for outside interference in the executive of trade
unions. First, the majority of workers are illiterate. Second, fear of victimization and of being
summarily dismissed by management were further responsible for outside interference in
the trade union movement. Third, the financial weakness of trade unions and absence of
full-time trade union workers have given the opportunity to outsiders to interfere in trade
unions' administration and in their executive.

Section 21 provides that any person who has attained the age of 15 years may be a member
of a registered trade union subject to any rules of the trade union to the contrary, and may,

1 Government of India, Report of the Royal Commission in India (1931) 328.

104 • Industrial Relations and Labour Laws

subject as aforesaid, enjoy all the rights of a member and execute all instruments and give
all acquittances necessary to be executed or given under the rules.

Section 22 of the Trade Unions Act, 1926, provides:

Proportion of office-bearers to be connected with the industry: (1) Not less than one half of
the total number of the office-bearers of every registered trade union in an unorganized
sector shall be persons actually engaged or employed in an industry with which the trade
union is connected:
(1) Provided that the appropriate government may, by special or general order, declare
that the provision of this Section shall not apply to any trade union or class of trade unions
specified in the order.
Explanation: For the purposes of this section, 'unorganized sector' means any sector
which the appropriate government may, by notification in the official gazette declare.
(2) Save as otherwise provided in sub-section (1), all office-bearers of a registered
trade union, except not more than one-third of the total number of the office-bearers or five,
whichever is less, shall be persons actually engaged or employed in the establishment or
industry with which the trade union is connected.
Explanation: For the purpose of this sub-section, an employee who has retired or has
been retrenched shall not be construed as an outsider for the purpose of holding an office
in a trade union.
(3) No member of the council of ministers or a person holding an office of profit (not
being an engagement or employment in an establishment or industry with which the trade
union is connected), in the Union or a state, shall be a member of the executive or other
office-bearer of a registered trade union.
The aforesaid provisions which permit non-employees to be an office-bearer of a
registered trade union raises various problems:
(a) What is meant by the 'outsider'? (i) Whether an ex-worker or a worker whose
services had been terminated by the employer may be treated as an outsider? (iz) Whether
a full-time employee of a trade union should be treated as an outsider?
(b) Whether there should be a legal ban on non-employees holding positions in the
executive of the union? Does it affect Article 19 of the Constitution?
(c) Whether the present limit of non-employees in the executive of a trade union be
curtailed? (iii) Whether union leaders should be debarred from holding offices in more than
a specified number of unions? Let us discuss these questions.

A. Concept of Outsider
The explanation of sub-section 2 of Section 22 provides that for the purposes of this sub-
section, an employee who has retired or has been retrenched shall not be construed as
outsider for the purpose of holding an office in a trade union.
The Supreme Court in Bokajan Cement Corporation Employees' Union v. Cement
Corporation of India Ltd2 held that an employee would not cease to be a member of a trade

2 2004 1 LLJ 197.

 Members, Offi.ce Holders and Outsiders in Trade Unions • 105

union on termination of his employment because there is no provision in the Act or the
constitution of trade union providing for automatic cessation of employment.
A question therefore arises whether an employee whose services are terminated or
who has retired would be an outsider. The question can only be answered in affirmative
because it is not desirable to permit dismissed workers in the executive of a trade union.

B. Entry of Outsiders in the Executive of Trade Unions

As the law stands today, there is no bar to having outsiders such as lawyers, politicians, social
workers etc., in the executive of trade unions. Conflicting views have, however, been expressed
in regard to the question of banning outsiders in the executive of trade unions. Managements
do not favour outside entry in the executives of trade unions. Workers, on the contrary, are
of the view that devoted leaders, even if they are outsiders, should be permitted to be office-
bearers of trade unions. They are of the view that management or any outside agency should
not interfere in their affairs. If they decide to allow outsiders in the trade union's executive,
they should be permitted to do so. However, sub-section 3 of Section 22 debars
(i) a member of the council of ministers or
(ii) a person holding an office of profit, other than those engaged or employed in an
establishment or industry with which the trade union is connected, in the Union or
state to be a member of the executive or office-bearer of a registered trade union.
(iii) From the above it appears that a member of the Parliament or state legislature or
ex-member of the council of ministers may become a member or executive or other
office-bearer of a registered trade union.

C. Number of Outsiders in the Executive of Trade Unions

The Trade Unions Act now places the limit of 50 per cent in case of unorganized sector.
However, all office-bearers of a registered trade union except not more than one-third of
the total number of office-bearers or 5, whichever is less shall be persons actually engaged
or employed in the establishment or industry with which the trade union is connected.

The following persons are not eligible to be appointed as office-bearers or members of the
executive of a registered trade union if
(i) he has not attained the age of 18 years;
(ii) he has been convicted by a court in India of any offence involving moral turpitude and
sentenced to imprisonment, unless a period of five years has elapsed since his release. 3
Section 21A(2) gives retrospective effect to the application of the aforesaid clause. It provides
that any member of the executive or other office-bearer of a registered trade union who,
before the commencement of the (Indian) Trade Unions (Amendment) Act, 1964 has been
convicted of any offence involving moral turpitude and sentenced to imprisonment shall

3 Section 21A(i) of the Trade Unions (Amendment) Bill, 1982 provides for insertion of a new clause
viz., '(iii) he has been convicted of any offence under the Industrial Disputes Act, 1947.'
106 • Industrial Relations and Labour Laws

on the date of such commencement cease to be a member or office-bearer unless a period

of five years has elapsed since his release before that date.
In R Murugesan v. Union Territory of Pondicherry,4 the Madras High Court held that
where a dispute arises as to who are validly and legally elected office-bearers of a trade union,
the Registrar is under an obligation to decide the question so that he can record the name in
his register. For this purpose, the scope of enquiry is limited. Otherwise, the registrar will
be in an enviable position of having to record two sets of office bearers of the same trade
unions without having any power to decide as to which of them will be recognized for the
purpose of administration of the Act. 5

Another problem of great practical significance is whether union leaders should be

debarred from holding office in more than a specified number of unions. The first National
Commission on Labour is of the view that there should not be any legal ban on leaders
from holding the executive post of more than one union. The view is, however, open to
criticism. In order to attract only devoted and hard-working leaders in trade unions, it
is necessary to place some limit on the union leaders from holding office of more than a
specified number of unions. It is significant to note that Section 33 (iii) of the Industrial
Relations Bill, 1978, provided that a person shall be disqualified for being chosen an office-
bearer of a registered trade union if he is already office-bearer of not less than four trade
unions. This will ensure the entry of only devoted and interested persons in the trade
union's executive. Be that as it may, the (Second) National Commission on Labour in its
report to the Government of India submitted on 29 June 2002, inter alia recommended
that a ceiling on the total number of trade unions of which an 'outsider' can be a member
of executive bodies is needed.

Section 6(hh) of the Trade Unions Act 1926 provides that the members of the executive and
other office-bearers of a trade union shall be elected for a period of not more than 3 years.

An office-bearer or member shall be entitled to inspect: (i) the account-books; and (ii) list
of members6 at such time as may be provided for in the rules of the trade union. Further, a
member not under 15 has a right to execute all instruments and give all acquittance necessary
to be executed or given under the rules.7 The scope of the legal rights and privileges was

4 (1976) 2 LLJ 435.

5 Sanjeeva Reddi v. Registrar of Trade Unions, (1969) 1 LLJ 11 and Mukund Ram Tanti v. Registrar ofTrade
Unions, (1963) 1 LLJ 60.
6 Section 20.
7 Section 21.
 Members, Offi.ce Holders and Outsiders in Trade Unions • 107

delineated in Secretary of Tamil Nadu Electricity Board Accounts Subordinate Union v. Tamil
Nadu Electricity Board. 8 In this case, two workmen of the Tamil Nadu Electricity Board were
allowed to do the full-time union work. However, the board refused to extend this facility
after about 4 years. On a dispute being raised, the government referred it to the labour
court for adjudication. The labour court held that this was a mere concession granted to
the office-bearers of the union and was not a part of service condition. Aggrieved by this
order, the trade unions preferred a writ petition before the Madras High Court. Three issues
were raised, namely: (i) Whether the workman had a legal right to do trade union activity
without attending to office duties? (iz) Whether the withdrawal of permission to do trade
union work on full-time basis would affect the service conditions? and (iii) Whether it is a
privilege within the meaning of Item 8 of Schedule IV of the Act? The court answered all
the issues in the negative and observed:
It is true that trade unionism (has been) recognized all over the world but that
does not mean that an office-bearer or any trade union can claim, as a right, to do
trade union activities during office hours. In a poor country like India, tax payers
pay money not for the purpose of encouraging trade unionism, but in the fond
and reverend hope that every person who is entrusted with the task of doing
service will do his service. Whether he actually does service or not, there can be a
fond expectation of the same. To allow one to claim as of right to do trade union
activity without attending to office duties, would in my opinion be an anachronism
since it will amount to fleecing the tax payer in order to encourage trade union
activities. That is not the purpose for which the workman was appointed by the
Electricity Board.

The Court further stated:

[We] are totally unable to appreciate the argument of the petitioner that merely
because the recognition of trade union is a part of the service condition, it must
necessarily follow that a right to represent or espouse the cause of workmen
during office hours is a necessary concomitant. If this kind of trade unionism
is allowed to flourish in our country, I could say 'Woe to our country and poor
tax payers.' For my part, not that one should be against trade unionism, which
is welcome because it is that which brings about solidarity among workers, the
crucial question is, can a right be claimed to active trade unionism during office
hours? The answer should be an emphatic 'no'.
Again in Indian Bank Employees Union v. Indian Bank9, it was held that a trade union
worker cannot enjoy the luxury of getting salary and not doing the assigned work. In other
words, the indulgence of trade union activity cannot be at the cost of the work for which
they are paid their emoluments by the employer.
In Burn & Co. v. Their workmen 10, the Court held that the office-bearers are not immune
from punishment for remaining absent from their duty. Likewise, office-bearers of a trade

8 (1984) 2 LLJ. 478.

9 (1994) 2 LLJ 497.
10 (1959) I LLJ 458.
1 o8 • Industrial Relations and Labour Laws

union are not immune from disciplinary action. 11 Moreover, office-bearers of a trade union
cannot claim immunity from transfer. 12
Again, in Usha Breco Mazdoor Sangh v. Mis Usha Breco Ltd13, it was held:
1. Whereas the management cannot resort to victimization and unfair labour practice
so as to get rid of the union leaders, the union leaders in turn are bound to maintain
discipline;
2. A union leader does not enjoy immunity from being proceeded against in a case of
misconduct.
3. Assault and intimidation are penal offences. A workman indulging in commission of
a criminal offence should not be spared only because he happens to be a union leader.
It is submitted that the Court, while recognizing the need of a healthy trade union,
cautioned that it should not be at the cost of the tax payer. This appears to be a very healthy
approach and would bring discipline in the industry.

It has now been held in a series of cases of the Supreme Court and high courts that :
(i) The power of the employer to transfer its employees (including the office-bearers of
trade union is a general conditions of service of the employee and that such transfers
are to be effected for administration convenience of the board and the court does not
sit in appeal nor calls for details of administrative exigencies);
(ii) The employee under transfer cannot claim any immunity from transfer merely by
reason of his being office bearer of the trade union;
(iii) The fact that the office bearer of the trade union organized protests and agitations is
not a ground from which intention to victimize the petitioner (office bearer of trade
union) can be inferred.
(iv) Only in cases where the order of transfer is found to be mala fide or colourable exercise
of power, would the order become illegal;
(v) Transferring an employee because he is troublesome/trouble-maker would be in the
interest of administration and such transfers cannot be characterized as punishment. 14
In Singapore Airlines Ltd v. Mr Rodrigntin 15, the plaintiff joined the Singapore Airlines
Ltd as clerk at Mumbai on 5 January 1987. As per item 6 of the appoinbnent letter, the airlines
was empowered to transfer the plaintiff at any time at any SAL station all over India at its
discretion. However, according to the plaintiff, the airlines had not transferred any employees
from Mwnbai to elsewhere. The plaintiff was carrying on trade union activities for more than
10 years and he was also elected as president of the union. According to the plaintiff, as the
defendant wanted to prohibit him from participating in trade union activities and charter of
demands made by the union, the airlines transferred the plaintiff to Jalandhar. The airlines

11 (1991) LLR 456.

12 TNEB Engineers Sangam v. Tamil Nadu Electricity Board, (1996) LLR 942 (Mad).
13 2008 LLR 619.
14 Varada Rao v. State of Karnataka, (1986)11 CLR 277 (SC); N K Singh v. Union of India, (1995) 1 LLJ 854
(SC); TNEB Engineering Sangram v. Tamilnadu Electricity Board, AIR 1966 SC 1685.
15 (2004) ILLJ 197 (SC).
 Members, Offi.ce Holders and Outsiders in Trade Unions • 109

issued transfer order on 9 July 2007 and asked him to join within 15 days. According to
the plaintiff, the transfer was mala fide and not in accordance with model standing orders.
According to the airlines, it transferred the plaintiff because it wanted to concentrate on
its business at Jalandhar and since the plaintiff was experienced in marketing for over 10
years; it decided to transfer him from Mumbai to Jalandhar. Upholding the validity of the
order of transfer, the Bombay High Court ruled:
1. Merely that the employee is president of the union, the transfer would not be mala fide.
2. Transfer cannot be stalled merely because he is an office-bearer of the union;
3. Had there been mala fide intention of the management, transfer of the employee who
has been an active worker of the union for the last 10 years would have been made
earlier also;
4. It is an individual dispute and not an industrial dispute. The union has not passed
any resolution supporting the case of the employee. It did not espouse or take up or
support his case. Hence, civil court has no jurisdiction;
5. Inconvenience to the employee is not relevant to stay the transfer;
6. In matter of transfer, employee who has been served with the transfer order must first
report to the place where he is transferred and, thereafter make a representation or
file legal proceedings;
The Court, accordingly, set aside the order of the trial Judge that the transfer was mala
fide and not in accordance with terms of contract.

Since independence, inter-union and intra-union rivalries, primarily based on political

considerations, leading to disputes between rival sets of office-bearers of trade unions, have
become sharper. However, except non-statutory Code of Discipline evolved in 1958 which
has failed to achieve the desired result, there is at present no legal machinery or procedure
for resolution of inter-union disputes in the Trade Unions Act. To fill this gap, the Trade
Unions (Amendment) Bill, 1982, provides for such machinery. Section 2(i) of the Bill defines
'trade union dispute' to mean any dispute:
(a) between one trade union and another; or
(b) between one or more members or office-bearers of a trade union and the trade union
(whether also with any of the other members or office-bearers of the trade union or
not) relating to its registration, administration or management of its affairs, including
the appoinbnent of the members of the executive or other office-bearers of the trade
union, the validity of any such appoinbnent, the area of operation of the trade union,
verification of membership and any other matter arising out of the rules of the trade
union, but excluding matters involving determination of issues as to the title to, or
ownership of, any building or other property or any funds.
And, Section 28B permits the parties to a trade union dispute to refer such dispute for
arbitration. Such arbitration agreement must be in the prescribed form and signed by the
parties in the manner prescribed by regulation. Further, Section 28C empowers the Registrar
to follow such procedure as he thinks fit in adjudging the disputes referred to him. The
procedure that may be followed by the Registrar will be subject to such regulation as may
11 o • Industrial Relations and Labour Laws

be made in this regard. Any person aggrieved by the award of the Registrar in a reference
may appeal to the court within such period as may be prescribed by regulation. The Bill
also permits the parties to trade union disputes to apply jointly or separately in the manner
prescribed by regulation for adjudication of disputes to the Registrar.
Trade Union
Finances and Funds 8
The weakness of a trade union is also determined by its financial status. It is, therefore necessary
to know the income and expenditure of workers' and employers' unions from 1996 to 2005.
Table 8.1: Income and Expenditure of Registered Workers' and Employers' Trade
Unions Submitting Returns for the Years 1991 to 2005
Workers' Unions Employers' Unions
No. of Unions N o. of Unions
Submitting Income Expenditure Submitting Income Expenditure
Year Returns (i Lakh) (i Lakh) Returns (i Lakh) (i Lakh)
1991 8351 3156.99 2409.97 67 5.16 3.65
1992 9073 3237.93 2409.97 92 36.83 29.32
1993 6776 1371.15 1319.63 30 7.34 6.32
1994 6265 2037.10 1895.76 12 4.97 5.25
1995 8048 3124.98 3269.54 114 94.88 76.15
1996 7229 2917.26 1962. 15 13 26. 17 23.74
1997 8774 2507.13 2280.92 98 85. 14 72.00
1998 7291 2629.26 2335.44 112 93.27 10209
1999 8061 5791.36 5043.13 91 66.91 48.74
2000 7231 7463.60 5940.66 22 24.61 20.90
2001 6513 5558.52 4895.56 18 22.21 17.59
2002 7734 6254.54 5340.46 78 404. 19 341.70
2003 7229 9432.81 6733. 15 29 31.08 23.89
2004 5217 6983.41 5627.83 25 78.41 40.18
2005 8255 11609.18 8852.97 62 63.59 41 .54

Source: Gov ernment of India, Minis try of Labour, Indian Labour Year Book, 2007 (2009), 90.
11 2 • Industrial Relations and Labour Laws

From Table 8.1, it is evident that during 2005, income as well expenditure of workers'
unions, as compared to previous years, have witnessed considerable increase. In case of
employers' unions, both income and expenditure of unions submitting returns registered
a decrease during the period under reference. But the average income of trade unions is
inadequate looking at the size of the unions. Several factors accounted for low average
income of trade unions: First, the strength of union members is inadequate due to small
size of unions and irregularity in payment of membership subscription. Second, workers are
apathetic towards trade unions and do not want to give their hard-earned money. Third,
unions are also interested in boosting up their membership figures and, therefore, do not
insist on regular payment. 1 Fourth, lack of full-time trade union staff may be responsible
for irregularity in collection of membership subscription.

A. Rate of Subscription of Union Members

Section 6 (ee) of the Trade Unions Act, 1926, provides that the payment of minimum
subscription by members shall not be less than:
(i) one rupee per annum for rural workers;
(ii) three rupees per annum for workers in other unorganized sectors; and
(iii) twelve rupees per annum for workers in other cases.
The aforesaid clause provides minimum membership fee. The basic difficulty of
trade unions is about the realization of monthly subscription from its members. The
subscription is not regularly paid and accumulation of' arrears pertaining to several years
are not uncommon'. Equally common is the practice of collecting subscription from those
who want to avail themselves of the privileges of being a trade union member. 2 These
irregularities can be eradicated by providing a machinery for regular realization of dues.
Further, the aforesaid rate of subscription is inadequate and creates a hurdle in effective
functioning of unions.

B. Right of Members to Subscribe

The members of trade unions are members under Section 6(e) of the Trade Unions Act, 1926.
The payment of subscription by members to the trade union has been made compulsory
under Section 6(ee) of the Act. The trade unions cannot refuse to receive subscription from
its members. 3 The same has been declared as a right of members. 4

C. Realization of Union Subscription and Check-off

In India, the Trade Unions Act, 1926 does not provide for check-off facilities. The check-off
system is a system under which the employer regularly deducts membership subscription

1 SC Pant, Indian Labour Problem (1964), p 101.

2 Ibid.
3 Coimbatore Periyar Districts Dravida, Panjalal Thozhilalar Munnetra Sangam v. National Textile
Corporation Limited, 2011 LLR 1076 (HC Madras).
4 MT Chandrasennan v. N Sukumaran, AIR 1974 SC 1789.
 Trade Union Finances and Funds • 113

from the wages of employees and hands over the amount to the union. This system is in vogue
in USA and UK and is enforced through a clause in the collective bargaining agreement and
is made legally permissible.5 Obviously, the collection is made by the union concerned from
the members. This is a lacuna in the law. To fill this gap, the (First) National Commission
on Labour recommended that the right to demand check-off facilities should vest with the
union and if such a demand is made by a recognized union, it should be made incumbent
on the management to accept it. In this direction, an attempt was made by the Trade Unions
(Amendment) Bill, 1969. The Bill empowered the employer to deduct the subscriptions from
the pay of employees for handing over the same to the appropriate union.

D. Deduction of Subscription Under Payment of Wages Act, 1936

Section 7(2)(kkk) of the Payment of Wages Act, 1936 permits deduction of subscriptions
from willing members of the trade union and employer is bound to deduct and remit the
same into the account of the trade union. Thus, Section 7(2)(kkk) provides:
7. Deductions which may be made from wages.
(2) Deductions from the wages of an employed person shall be made only in accordance
with the provisions of this Act, and may be of the following kinds only, namely,
(kkk) deductions made with the written authorization of the employed person, for
payment of fees payable by him for membership of any trade union registered under the
Trade Unions Act, 1926 (16 of 1926).
Thus, there is a statutory duty /obligation on the part of the employer to deduct
subscription payable by the members of registered trade unions, who have given consent/
authorization in writing. Refusal by the employer to deduct and remit the amount to the
account of the registered trade union is a statutory violation and the same amounts to
defeating the object of forming trade unions. 6

E Check-off: Judicial Response

Judicial policy to strengthen the hands of trade unions by allowing union subscription to
be deducted by employer is evident from the judgement in Balmer Lawrie Workers' Union v.
Balmer Lawrie & Co. Ltd.7 The Supreme Court examined the validity of a clause of settlement
between employer and a representative union which authorized the employer to deduct
15 per cent of gross arrears payable to workmen towards union fund. Upholding the validity
of the clause, the Court observed: 8
It is well known that no deduction could be made from the wages and salary
payable to a workman governed by the Payment of Wages Act unless authorized
by that Act. A settlement arrived at on consent of parties can be however, permitted
as it is the outcome of understanding between the parties even though such
deduction may not be authorized or legally permissible under the Payment of
Wages Act .... Such deductions can neither be said to be compulsory exaction nor
tax. Therefore such a provision of deduction at a certain rate as agreed between

5 See Government of India, Paper of the National Commission on Labour, (1969), 294.
6 See infra note 10.
7 (1985) Lab. IC 242.
8 Id. at 253 (emphasis added).
114 • Industrial Relations and Labour Laws

the parties for payment to the union, the same being with the consent and as part
of overall settlement would neither be improper nor impermissible nor illegal.
The Court therefore, rejected the contention that by permitting deductions towards
union fund of one union, the management discriminated between union and union, and
between members of the union and non-members and thereby violated Article 14 of the
Constitution.
The division bench of the Madras High Court in State Bank Staff Union v. State Bank of
India 9 held that the plea of the recognized trade union that it should alone be given the check-
off facility cannot be accepted because: (i) check-off facility granted to the recognized trade
union under the code of discipline was not statutory in character; (iz) There was nothing in
the code to indicate that such a facility must be given only to the recognized trade unions.
The aforesaid view as reiterated in Coimbatore Periyar District Dravida Panjalal Thozhilalar
Muneetra Sangam v. National Textile Corporation Ltd. 10 In this case, the Madras High Court
held that management was not justified in refusing to deduct and remit subscriptions to
the account of the registered trade unions, a practice which has been in vogue for the past
25 years, merely on the ground that the said trade unions were not recognized unions for
the purposes of negotiations.
In Rashtriya Colliery Mazdoor v South Eastern Coalfields Ltd. 11, the Madhya Pradesh
High Court upheld the order of withdrawal of check-off facility to the petitioner on the
ground that it is not affiliated to one of the recognized central trade union organizations
which are in turn recognized under the Code of Discipline as being the representative
union under industrial relations prevalent in the SECL. The Court also held that it is a
policy matter of the petitioner and since a policy decision is taken and code of conduct
has been evolved by the process of joint consultative machinery, the same is beyond the
scope of judicial review.

Section 15 of the Trade Unions Act, 1926, lays down the purposes for which general fund
of a registered trade union can be utilized namely:
(a) the payment of salaries, allowances and expenses to office-bearers of the trade union;
(b) the payment of expenses for the administration of the trade union, including audit of
the accounts of general funds of the trade union;
(c) the prosecution or defence of any legal proceeding to which the trade union or any
member thereof is a party, when such prosecution or defence is undertaken for the
purpose of securing or protecting any rights of the trade union as such or any rights
arising out of the relations of any member with his employer or with a person whom
the member employs;
(d) the conduct of trade disputes on behalf of the trade union or any member thereof;
(e) the compensation to members for loss arising out of trade disputes;

9 1991 Lab. IC 197.

10 (2011) 4 LLJ 857.
11 2009 Lab IC 2836.
 Trade Union Finances and Funds • 115

(f) the allowances to members or their dependants on account of death, old age, sickness,
accidents or unemployment of such members;
(g) the issue of, or the undertaking of liability under, policies of assurance on the lives
of members, or under policies insuring members against sickness, accident or
unemployment;
(h) the provision of educational, social or religious benefits for members (including the
payment of expenses of funeral or religious ceremonies for deceased member) or for
the dependants of members;
(i) the upkeep of a periodical published mainly for the purpose of discussing questions
affecting employers or workmen as such;
(j) the payment, in furtherance of any of the objects on which the general funds of the trade
union may be spent, for contributions to any cause intended to benefit workmen in
general, provided that the expenditure in respect of such contributions in any financial
year shall not at any time during that year be in excess of one-fourth of the combined
total of the gross income, which has upto that time accrued to the general funds of
the trade union during that year and of the balance at the credit of those funds at the
commencement of that year; and
(k) subject to any conditions contained in the notification, any other object notified by the
appropriate government in the official gazette.

Refund of Subscription
In G S Dhara Singh v. E K Thomas 12, the Supreme Court held that any amount received
from or on behalf of members by trade union, is liable to be refunded to the members on
resignation from the trade union.

As mentioned earlier, trade unions have political affiliation and they are often compelled
to plunge in political sphere in order to show their strength. Law, therefore, cannot keep
itself away from realities. It is in view of this that Section 16 of the Act permits a registered
trade union to raise a separate political fund for its members in furtherance of the objectives
mentioned in Section 16 (2), namely;
(a) the payment of any expenses incurred, either directly or indirectly, by a candidate or
prospective candidate for election as a member of any legislative body constituted
under the Constitution or of any local authority, before, during, or after the election
in connection with his candidature or election; or
(b) the holding of any meeting or the distribution of any literature or documents in support
of any such candidate or prospective candidate; or
(c) the maintenance of any person who is a member of any legislative body constituted
under the Constitution or for any local authority; or
(d) the registration of electors or the selection of a candidate for any legislative body
constituted under the Constitution or for any local authority; or

12 AIR 1988 SC 1829.

116 • Industrial Relations and Labour Laws

(e) the holding of political meetings of any kind, or the distribution of political literature
or political documents of any kind.
Of these, clause (c) requires further examination. This clause which confers a right
upon a trade union to spend as much as it likes for the maintenance of the member has
been criticized 13 on the ground that: (i) it violates the fundamental right to equality as
guaranteed by the Indian Constitution (ii) it results in improper influence on the members
thereby interfering with the freedom of speech amounting to breach of privilege (iii) it
encourages the growth of puppet legislators who can get double maintenance (iv) such a
provision has great potential for corrupting our parliamentary system and (v) a new line
of lobbying pattern emerges. 14

Nature and Effect of Non-contribution

Contribution to the political funds of the trade union is merely voluntary and not compulsory.
Thus, no member who does not contribute to the fund shall be under any disability or
disadvantage except in respect of management and control of such funds. Further, a non-
contributory member cannot be excluded from the benefits of the trade union. Moreover,
no condition can be imposed for the admission to membership of the union. 15
While dealing with the provisions of separate political fund, the [second] National
Commission on Labour in its report felt that it may be allowed to continue and appropriately
included itin the proposed integrated law. However, care must be taken to ensure that the
general funds of trade unions are not used for political purposes.

13 See Shashi K Sharma, Maintenance Clause as per Section 45 16(2) (c) of the Trade Unions Act, 1926,
22 JILJ 282 (1980).
14 Ibid.
15 Section 16(3).
Privileges of
Registered Trade
Unions 9
Let us turn to consider the immunity afforded to the members and office-bearers of registered
trade unions from civil and criminal conspiracies and restraint of trade under the Trade
Unions Act. Until 1926, unions or workers indulging in strike and causing financial loss to
management were liable for illegal conspiracies. For instance, in Buckingham and Carnatic
Mills, the unions were held liable for illegal conspiracies and employers were awarded
damages.

A. Only a Fraction of Labour Force Protected

Section 17 of the Trade Unions Act, 1926, (hereinafter referred to as TUA) seeks to insulate
trade union activity from liability for criminal conspiracy:
No office-bearer or member of a registered trade union shall be liable for
punishment under sub-section (2) of Section 120 B of the Indian Penal Code in
respect of any agreement made between the members for the purpose of furthering
any such object of the trade union as is specified in Section 15, unless the agreement
is an agreement to commit an offence.
The immunity is, however, available only:
(i) to office-bearers and members of registered trade unions;
(ii) for agreement between the members;
(iii) such agreement that may further any such trade union object as is specified in
Section 15 of the Act; and
(iv) such agreements is not to commit an offence.
The first of these limitations confines the protection to a only members and office-
bearers of a trade union. Table 9.1 tabulates the position of registered trade unions.
11 8 • Industrial Relations and Labour Laws

Table 9.1: Number of Registered Unions (Workers' and Employers') and Membership
of Unions Submitting Returns for the Years 1991 to 2006
Average
Number of Number of Membership
Registered Unions Membership of per Union
Trade Submitting Unions Submitting Submitting
Year Unions Returns Returns (in 000's) Returns
Men Women Total
1 2 3 4 5 6 7
1991 53535 8418 5507 594 6100 725
(15.7) (90.3} (9.7)
1992 55680 9165 5148 598 5746 627
(16.5) (89.6} (10.4)
1993 55784 6806 2636 498 3134 460
(12.2} (84.1) (15.9)
1994 56872 6277 3239 855 4094 652
(11.0} (79.1} (20.9}
1995 57952 8162 5675 863 6538 801
(14.1) (86.8} (13.2}
1996 58988 7242 4250 1351 5601 773
(12.3} (75.9) (24.1)
1997 60660 8872 6504 905 7409 835
(14.6) (87.8) (12.2}
1998 61992 7403 6104 1145 7249 979
(12.0} (84.2) (15.8)
1999 64817 8152 5190 1218 6407 786
(12.6} (81.0} (19.0}
2000 66056 7253 4510 910 5420 747
(11.0} (83.2} (16.8}
2001 66624 6531 4392 1481 5873 900
(9.8} (74.8) (25.2)
2002 68544 7812 5102 1871 6973 893
(11.4) (73.2} (26.8}
2003 74649 7258 4854 1423 6277 865
(9.7) (77.3) (22.7)
2004 74403 5242 2954 443 3397 648
(7.0) (87.0) (13.0}
2005 78465 8317 6341 2381 8722 1049
(10.6} (72.7) (27.3)
2006{e} 79494 9037 6154 2778 8932 988
Source: Government of India, Indian Labour Year Book. 2008 (2010} 85.

B. Immunity Jeopardizes Community's Interests

As to the second limitation, the most significant provision is Section 15 which relates to
the conduct of trade disputes on behalf of the trade union or any member thereof. The key
expression 'trade dispute' is defined in Section 2 (g) of the Act to mean:

any dispute between employers and workmen or between workmen and workmen
or between employers and employers which is connected with employment or non-
employment, or the terms of employment or the conditions of labour, of any person.
 Privileges of Registered Trade Unions • 11 9

The words used in this definition differ from the definition of 'industrial dispute' in
the Industrial Disputes Act, 1947 (hereinafter referred to as IDA) in two minor respects
(i) whereas the Trade Unions Act uses the word 'trade' or 'industry', the Industrial Disputes
Act uses the legislatively defined word 'industry'; and (iz) the definition of 'trade dispute'
omits the words 'or difference' which occur in the definition of 'industrial dispute.'
We believe that despite these differences, the definition of 'trade dispute' as such, is
pari materia with the definition of 'industrial dispute' and generally the controlling judicial
decisions1 while interpreting the latter definition also delineate the contours of the former
definition.
An effective difference between the respective coverages of the definition of 'trade
dispute' and 'industrial dispute' arises because of the definition of 'workmen' in the TUA.
The aforesaid Section 2(g) of TUA further states that 'workmen' means:
all persons employed in trade or industry whether or not in the employment of the
employer with whom the trade dispute arises (emphasis added).
It will be noticed that on the one hand, the italicized words in the aforesaid definition
did not occur in the corresponding definition of 'workman' in the IDA. On the other hand,
a whole series of qualifying words used in the definition of 'workman' in the IDA are
conspicuous by their absence from the corresponding definition in the TUA. Under Section
2(s) of IDA:

workman means any person (including an apprentice) employed in any industry

to do any manual, unskilled, skilled, technical, operational, clerical or supervisory
work for hire or reward, whether the terms of employment be express or implied,
and for the purposes of any proceeding under this Act in relation to an industrial
dispute, includes any such person who has been dismissed, discharged or
retrenched in connection with, or as a consequence of, that dispute, or whose
dismissal, discharge or retrenchment has led to that dispute, but does not include
any such person:
(i)who is subject to the Army Act, 1950, or the Air Force Act, 1950 or the Navy Act,
1957; or
(ii) who is employed in the police service or as an officer or employee of a prison; or
(iii) who is employed mainly in a managerial or administrative capacity;or
(iv) who, being employed in a supervisory capacity, draws wages exceeding one
thousand and six hundred rupees per mensem or exercises, either by the nature
of duties attached to the office or by reason of the powers vested in him, functions
mainly of a managerial nature.
The Trade Unions Act, 1926 has the potential2 to cover a much larger number of persons
than the Industrial Disputes Act, 1947. Thus, Section 17 of the TUA grants immunity from
liability for criminal conspiracy to persons in whose industrial dispute the government
cannot intervene, whether by way of conciliation or adjudication, and in the absence of the

1 Newspapers Ltd v. Industrial Tribunal, (1995) 2 LLJ 1 (SC); Working Journalists of the Hindu v. The Hindu,
(1961) 2 LLJ 188 (SC); Indian Cable Co. Ltd v. Its Workmen, (1962) 1 LLJ 409 (SC); Workmen of Rohtak
General Transport Co. v. Rohtak General Transport Co., (1962) 1 LLJ 654 (SC): Workman v. Dharam Pal
Prem Chand, (1965) 1 LLJ 668 (SC).
2 Actually, because of the requirement of registration, the effective difference may be less.
120 • Industrial Relations and Labour Laws

possibility of such intervention, the provisions of the IDA regulating the use of instruments
of economic coercion do not apply.

C. Nature of the Immunity

The last of the limitations on the scope of the immunity granted by Section 17 of the TUA
raises an issue relating to the very nature of the immunity. Section 120-A of the Indian
Penal Code (hereinafter referred to as IPC) defines criminal conspiracy to mean: (i) an
agreement between two or more persons to commit an offence, i.e., in, general,3 an act which
is punishable under IPC or any other law for the time being in force; and (ii) an overt act
done in pursuance of an agreement between two or more persons to do an illegal act or to
do a legal act by illegal means. The IPC defines the word 'illegal' to include, inter alia:
... everything which is prohibited by law, or which furnishes ground for a civil action.4
Since workman's use of instruments of economic coercion in an industrial dispute
involves breach of contract and injury to the property right of the employer, both the acts
are actionable, and amount to an illegal act within the meaning of Section 120A read with
Section 43 of the IPC.
But under Section 17, breach of contract and injury to employer's property cease to
be actionable and, therefore, do not amount to criminal conspiracy as defined in Section
120-A read with Section 43 of the IPC. A question therefore, arises as to what is the criminal
liability in respect of which Section 17 of the TUA grants immunity. In considering the
matter, it is relevant to note that Section 17 does not grant charter of liberty to commit an
offence, which is punishable with death, life imprisonment or rigorous imprisonment for a
term of two years or more. 5 In fact, the last words of the Section 17 of the TUA indicate that
it does not insulate agreement to commit any offence whatsoever. Perhaps the immunity
is confined to an agreement between two or more persons to do, or cause to be done, acts
which are prohibited by law but which neither amount to an offence nor furnish grounds
for civil action.
Breach of contract does give rise to a civil cause of action. Therefore, under Section 43
of the IPC, an agreement to commit breach of contract through withdrawal of labour as an
instrument of economic coercion in an industrial dispute is a criminal conspiracy. Further,
so long as any law declares withdrawal of labour in breach of contract to be an offence, if
a member of the consenting party takes any step to encourage, abet, instigate, persuade,
incite or in any manner act in furtherance of the objective, criminal conspiracy would have
been committed. Finally, since criminal conspiracy is a substantive offence punishable under
Section 120B of the Indian Penal Code, it is doubtful if Section 17 grants immunity at all.

3 Section 40 ofIPC defines the word 'offence' to mean 'except in the chapters and sections mentioned
in clauses 2 and 3 of this section the word' offence 'denotes a thing made punishable by this Code'.
In Chapter IV, Chapter V-A and in the following sections namely, Sections 64, 65, 66, 67, 71, 109,
110,112,114,115,116,117,187,194,195,203,211,213,214,221,222,223,224,225,327,328,329,330,
331,347,348,388,389, and 445, the word 'offence' denotes a thing punishable under this Code, or
under any special or local law as hereinafter defined.
And in Sections 141, 176,177,201,202,212,216, and 441, the word 'offence' has the same meaning
when the thing punishable under the special or local law is punishable under such law with
imprisonment for a term of six months or upwards, whether with or without fine.
4 Section 43.
5 Section 17 does not refer to clause (1) of Section 120B of the Indian Penal Code.
 Privileges of Registered Trade Unions • 1 21

The word 'illegal' is applicable to everything which is an offence or which is prohibited by

law, or which furnishes ground for a civil action, and a person is said to be 'legally' bound
to do, whatever it is illegal in him to omit. Reading Section 18 of the Trade Unions Act
with Section 43 of the Indian Penal Code, it would appear that withdrawal of labour as an
instrument of economic coercion in an industrial dispute in breach of contract is not illegal.
Accordingly, an agreement between two or more workmen, members of a registered trade
union to withdraw labour as an instrument of economic coercion in an industrial dispute
is not an agreement 'to do or cause to be done an illegal act' and amounts to a criminal
conspiracy within the meaning of Section 120-A of the IPC. Accordingly, withdrawal of
labour in breach of contract does not give rise to a cause of action in civil courts.

D. Judicial Response
The Calcutta High Court in Jay Engineering Works Ltd v. Staf/6 while interpreting the
provisions of Section 17 observed:

No protection is available to members of a trade union for any agreement to

commit an offence ... When a group of workers, large or small, combine to do
an act for the purpose of one common aim or object, it must be held that there
is an agreement among the workers to do the act and if the act committed is
an offence, it must similarly be held that there is an agreement to commit an
offence.

Section 18 of the Trade Unions Act, 1926, grants immunity to registered trade unions from
civil suits.7

6 AIR 1968 Cal. 407.

7 Since Section 18 of the Trade Unions Act, 1926 is based upon English law, it is useful to note the
developments in the United Kingdom. Until 1906, wilful interference with the business of employer,
e.g., strikes causing financial loss to management was actionable in England and until 1926 in India.
In Quinn v. Leathern [1901]. AC. 495 unions were held liable for illegal conspiracies. Dissatisfaction
in England with Taff Value Co. v. Amalgamated Society of Railway Servants [1901]. AC. 406, decision
led to the enactment of the Trade Disputes Act, 1906, which gave legislative disapproval to judicial
decision, [see Bertram F Willcox and Others (Ed.}. Labour Law and Labour Relation, Indian Law
Institute, 43. (1967}]
Section 3 of the English Trade Disputes Act, 1906 exempted trade unions from the liability in tort for
an act done by a person in contemplation or furtherance of a trade dispute if: (i) it induces a breach of
contract of employment; or (iz) it interferes with the trade, business or employment or right to dispose
of his capital or his labour as he wills. The scope of immunity afforded in Section 3 was delineated
by the House of Lords in Rookes v. Barnard, All E.R 1964 367. In this case a worker (who resigned
from membership of the union) was dismissed by the corporation in consequence of a threat by
fellow workers (union members) to strike in breach of a no-strike clause in their service agreement.
He brought an action for damages against union officials for tort of intimation. The Court awarded
him damages of £7,500. Justice Sach, held that the threat to strike in breach of the agreement was
an unlawful act constituting intimidation, and actionable as tort as it had harmed the plaintiff. The
Court accordingly held that the defendants were not protected under Section 3. The Court of Appeal
revised the findings and held that although the tort of intimidation existed, it did not cover the case
(Contd.)
122 • Industrial Relations and Labour Laws

(i) No suit or other legal proceeding shall be maintainable in any civil court against
any registered trade union or any office-bearer or member thereof in respect
of any act done in contemplation or furtherance of a trade dispute to which a
member of the trade union is a party on the ground that such act induces some
other person to break a contract of employment, or that it is in interference with
the trade, business or employment of some other person or with the right of some
other person to dispose of his capital or his labour as he wills.
(ii) A registered trade union shall not be liable in any suit or other legal proceeding in
any civil court in respect of any tortuous act done in contemplation or furtherance
of a trade dispute by an agent of the trade union if it is proved that such person
acted without the knowledge of, or contrary to express instructions given by the
executive of the trade unions.
The above section does not afford immunity to the members or office-bearers of a
trade union for an act of deliberate trespass. 8 The immunity also cannot be availed of by
them for unlawful or tortuous act. 9 Further, such immunity is denied if they indulge in an
illegal strike or gherao. Moreover, the immunities enjoyed by the union do not impose any
public duty on the part of the union.' 10
The section, however, raises various problems.11
First, like immunity from criminal conspiracy, immunity from civil action is also
confined to members of the registered trade unions. We have already seen that such
protection was limited to 10.6 per cent of the labour force in 2005.
Second, it does not afford adequate protection from civil liabilities. For, it is arguable
whether it gives protection and, if so, to what extent in excess of the aforementioned Section
17 of the Trade Unions Act. A suit or proceeding may not be maintainable for a number of
reasons. Does it necessarily follow that the conduct does not' furnish ground for civil action'
within the meaning of Section 43 of the Indian Penal Code?
Third, the expression 'in contemplation or furtherance of a trade dispute to which a
member of the trade union is a party' is obviously narrower than the ambit of protection
under the said Section 17.

of threat to breach of contract. The House of Lords reversed the findings of the Court of Appeal and
held that a threat by persons that contracts of employment would he be broken unless the employer
conceded their demands was a threat to do something unlawful and constituted the tort of intimidation.
Consequently, the person concerned when sued for damages for civil conspiracy could not rely on
the protection afforded by the 1906 Act. This decision was nullified by the Trade Disputes Act, 1965.
'Then followed the decisions in J T Stratford & Sons Ltd, v. Lindley [1965] AC. 269; Emerald Construction
Co. Ltd v. Lowthian & Others [1966] IWLR 691. Torquay Hotel Co. Ltd v. Cousins & Others [1969] 2 Ch.
106 and Ford Motor Co. Ltd v. Amalgamated Union of Engineering and Foundary Workers [1969] 2 All. ER
481 which did not totally free the industrial relations from the operation of law efforts and the Trade
Disputes Act of 1906 was found to be inadequate. Parliament passed the Industrial Relations Act,
1971 to alleviate the position of labour to some extent. This Act was repealed by the Trade Unions and
Labour Relations Act, 1974which was amended in 1976.' [See ES Vankataramiah. 'A Brief History of
the Liability of a Participant in a Strike in England,' 23 JILi (1981), 331.
8 Dalmia Cement Ltd v. Naraindas Anandjee Bechar, AIR 1939 Sind 256.
9 Shri Ram Vilas Service Ltd v. Simpson and Group Companies Workers Union, (1979) 2 LLJ 284 (Madras).
10 See Chemosyn Pvt. Ltd v. Kerala Medical and Representatives Association, (1988) Lab. IC 115.
11 Anandjee, 'Impact of Labour Laws on Trade Union Movement,' a paper read at the All India Labour
Economic Conference.
 Privileges of Registered Trade Unions • 123

Fourth, Section 18 helped in maintenance of union funds, howsoever meagre. The

real significance is in rejecting the application of the common law doctrines of restraint of
trade and criminal conspiracy in so far as they encroach on the field of labour management
relations. Together with Section 17, it provides a great impetus for, and facilitates the active
participation of 'outside leaders' in the trade union movement.
In Rohtas Industries Staff Union v. State of Bihar12, certain workmen went on an illegal and
unjustified strike at the instance of the union. A question arose whether the employers had any
right of civil action for damages against the strikers. The arbitrator held that the workers who
participated in an illegal and unjustified strike, were jointly and severally liable to pay damages.
On a writ petition, the Patna High Court quashed the award of the arbitrator and held that
employers had no right of civil action for damages against the employees participating in an
illegal strike within the meaning of Section 24 of the Industrial Disputes Act, 1947. From this
decision, it is evident that Section 18 grants civil immunity in case of strike by the members of
the trade union. On appeal, the Supreme Court affirmed the judgement of the High Court on
the ground that the claim for compensation and the award thereof in arbitration proceedings
were invalid and such compensation for loss of business was not a dispute or difference
between the employers and the workmen which was connected with the employment or
non-employment or terms of employment or with the condition of labour of any person. The
Supreme Court did not decide the question as to whether the Patna High Court was right in
relying on Section 18 of the Act to rebuff the claim for compensation because the Supreme
Court did not wish to rest its judgement on that ground.
In Jay Engineering Works v. Staff13, the full bench of the Calcutta High Court was invited
to consider the question whether the protection under Sections 17 and 18 of the Trade
Unions Act can be availed of where workers resort to gherao. Chief Justice Sinha explaining
the scope and ambit of protection observed:
The net result of the decision set out above is that Sections 17 and 18 of the Indian
Trade Unions Act grant certain exemption to members of a trade union but there
is no exemption against either an agreement to commit an offence or intimidation,
molestation or violence, where they amount to an offence. Members of a trade
union may resort to a peaceful strike, that is to say, cessation of work with the
common object of enforcing their claims. Such strikes must be peaceful and not
violent and there is no exemption where an offence is committed. Therefore,
a concerted movement by workmen by gathering together either outside the
industrial establishment or inside, within the working hours is permissible when
it is peaceful and does not violate the provisions of law. But when such a gathering
is unlawful or commits an offence then the exemption is lost. Thus, where it resorts
to unlawful confinement of persons or criminal trespass or where it becomes
violent and indulges in criminal force or criminal assault or mischief to person or
property or molestation or intimidation, the exemption can no longer be claimed.
The Calcutta High Court once again in Reserve Bank of India v. Ashis14 held that in
order to secure immunity from civil liability under Section 18, inducement or procurement
in breach of employment in furtherance of trade dispute must be by lawful means and not
by means which would be illegal or wrong under any other provisions of the law.

12 Rohtas Industries Staff Union v. State of Bihar, AIR 1963 Patna 170; On appeal AIR 1979 SC 425.
13 Joy Engineering Works v. Staff, AIR 1968 Cal. 407.
14 Reserve Bank of India v. Ashis, 73 CWN 388, (1969).
124 • Industrial Relations and Labour Laws

The Madras High Court in Sri Ram Vilas Service Ltd v. Simpson Group Company Union 15
held that it was not within the purview of the High Court to prevent or interfere with the
legitimate rights of the labour to pursue their agitation by means of a strike so long as it
did not indulge in unlawful and tortuous acts.
In Federation of Western India Cine Employees v. Filmalaya Pvt. Ltd16, a question arose
whether an injunction can be issued restraining the trade union, its members or agents
from acting upon the direction issued by the union, namely, not to report at the studio? The
Bombay High Court answered it in the negative because such act was protected by Section
18 of the Trade Unions Act, 1926. In this case, there was a dispute between Filmalaya Pvt.
Ltd, a private limited company and the workers (represented through federation of affiliated
unions) regarding employment, non-employment, status of 19 employees and alleged illegal
termination of services of certain workers. The federation of the concerned affiliated union
issued a letter on 3 May 1980 addressed to various bodies and associations of cine artists,
technicians and workers requiring them to issue instructions directing their members not to
report for shooting work at the studio of Filmalaya Pvt. Ltd. The net effect of that letter was that
the business of the company came to a standstill. The company, therefore, filed a suit against
the employees mainly for an injunction restraining them from acting upon the directive of
the federation. The civil court came to the conclusion that there was no trade dispute pending
between the parties and hence, Section 18 had no application to the fact. It also issued a notice
of motion in absolute in terms of prayer. The High Court observed that the directions amount
to intimidation or coercion and, therefore, are not protected by Section 18. The court added that
the act in contemplation or in furtherance of trade dispute, which induces breach of contract
of other employees causes interference with the trade, business or employment of some other
person, fell within the ambit and scope of Section 18. However, the inducement or interference
must be by lawful means. In other words, Section 18 does not give protection to trade union
from acts of violence. 17 The court accordingly held that the union was entitled to carry out its
legitimate trade union activities peacefully and, therefore, slogans or demonstrations per se
could not be termed as unlawful and hence, a blanket injunction could not be granted in that
behalf. The court however, cautioned that this was not to say that the trade union was also
protected from its violent activities; activities which were normally termed as violent could
not be regarded as trade union activities of a union.
In Usha Breco Mazdoor Sangh v. Management of Mis Usha Breco Ltd. 18, the Supreme
Court ruled:
(i) A workman indulging in commission of a criminal offence should not be spared
only because he happens to be a union leader;
(ii) A union leader does not enjoy immunity from being proceeded with in case of
misconduct.
Again, in Indian Bank v. Federation of Indian Bank Employees' Union 19, the Indian Bank
sought an interim injunction against the employees' unions restraining them from holding

15 Sri Ram Vilas Service Ltd v. Simpson & Group Company Union, (1979) 2 LLJ 284 (Madras).
16 (1981) 1 LLJ 123.
17 See Jay Engineering Works v. Stage of West Bengal, AIR 1963 Cal. 407; Railway Board, New Delhi
v. Niranjan Singh, (1969) 2 LLJ 743; M P Collieries Workers Federation v. United Colliers, (1972) Madh.
Pr LJ 79; Sri Rama Vilas Service Ltd v. Simpson & Group Companies Workers Union, (1979) 2 LLJ 284.
18 2008 LLR 619.
19 (1982) 1 LLJ 123.
 Privileges of Registered Trade Unions • 125

meetings, demonstrations, etc., within a radius of 50 metres of the central office or any of the
branches of the bank. A question arose whether the bank was entitled to an interim injunction
against its own employees? The Madras High Court held that an interim injunction would
virtually prevent the exercise of statutory rights conferred on unions to hold demonstrations
and meetings within the scope of the Trade Unions Act and, therefore, no injunction could
be issued. The court, however, added that if any act is committed resulting in unlawful
activities, and constitutes cognizable offences under the Indian Penal Code, or other special
enactments like the Banking Regulations Act, 1949, etc., the immunity available under the
Trade Unions Act, 1926, would not be available.
In Ahmedabad Textile Research Association v. ATlRA Employees Union 20, a division bench
of the Gujarat High Court held that it is not within the purview of the civil court to prevent
or interfere with the legitimate rights of the workmen to pursue their demands by means of
strike or agitation or other lawful activities so long as they do not indulge in acts unlawful,
tortuous and violent. The court further held that any agitation by the workmen must be
peaceful and not violent. Any concerned movement by workmen to achieve their objectives
is certainly permissible even inside the industrial establishment.
In Orchid Employees Union v. Orchid Chemicals & Pharmaceuticals Ltd 21 , the Supreme
Court held that although the trade union and its members were restrained to assemble
within 100 meters of the boundary of the factory premises of the respondent company
and raise slogans or obstruct the ingress and egress of the vehicles carrying raw
materials and finished products, staff bus and other vehicles into factory premises,
and obstruct the loyal workers, foreign customers and other visitors from entering into
the respondent company and getting out of the same till the disposal of the suit or the
conciliation proceedings, whichever is earlier. It was, however, observed thatthe above
interim injunctions will not in any way interfere with the present appellants' rights to
strike or peaceful picketing.
Under the Trade Unions Act, 1926, the members of the union are certainly not permitted
to involve themselves in violent activities. In such circumstances, giving police protection
to factory by this court in exercising its jurisdiction under Article 226 of the Constitution
of India is not unknown22 •
In Mining and Allied Machinery Corporation Ltd, (by its law officer and constituted
attorney N X Mandal) v. Superintendent of Police, St. Thomas Mount, Madras,2 3 it was held that
a negative approach of lawful agitation by the working class cannot be justified by resorting
to law and order problem in the industrial sector, which is as follows:
Strikes, lock-outs, satyagrahas and demonstrations are nothing new in our
country. Promotion of social justice over the past few decades was to a
considerable extent, due to militant and agitational approach of the workmen
and not, to any appreciable degree, due to condescension by the management.
It is but true that in the process of securing to the workmen more amenities and
privileges and better condition of service, the industrial tribunals, labour courts,
and the courts of this country have played a vital role. A negative approach to
lawful agitation by the working class to secure higher wages and better living

20 (1993) Guj. LH 783.

21 2008 LLR 519.
22 K C P Ltd v. Inspector of Police, Tiruvottiyur, 1993 ILLJ 365.
23 (1987) 2. LLN 294.
126 • Industrial Relations and Labour Laws

conditions cannot be justified by resort to the plea of maintaining law and order
in the industrial sector.
The jurisdiction of this court in granting a writ of mandamus by directing the police
to give protection to the management to carry on lawful trade was again reiterated by
the division bench of Kerala High Court in Midland Rubber & Produce Co. Ltd, Cochin v.
Superintendent of Police, Pathanamthitta and Others,24 wherein Justic AR Lakshmanan, while
presiding over the bench, held as follows :

...Just as the workers are entitled to protection of their legal rights by courts of
law, the employers are also equally entitled to protection of their fundamental
right to carry on their lawful trade or business. In our opinion, it is not open to
the respondents-unions to take the law in their own hands and obstruct the
permanent workers of the appellant from discharging their duties or prevent the
appellant from doing the rain guarding work. Sufficient safeguards are provided
under the Industrial Disputes Act to prevent exploitation of workers by employers.
It is strange to find that one set of workers claimed the right to get employment
on the basis of some practice and preventing the employer from engaging labour
of their choice. If the claim of the labour is allowed, then a day will come when
a citizen of this country has to seek his employment in his own village, taluk
or district. Such a claim would run counter to the rights guaranteed under the
Constitution of India. therefore the right now claimed by the respondents on the
basis of some practice cannot be countenanced at all.
The court added that Section 18(1) of the Trade Unions Act, 1926 certainly prohibits
the employer from breaking the contract of employment and gives immunity to an office
bearer in respect of the act done by him. When the employer attempts to divide the striking
workers, which is not lawful, it is certainly open to the union and its members to approach
the inspector of factories or raise an industrial dispute by treating the same as unfair labour
practice, and the immunity granted under section 18(1) of the Act cannot mean to say that
the union must be permitted to achieve its object by resorting to the methods which are
not permitted in law.
InM/s Avtec Limited, Power Products Division Poonapally, Hosur v. Superintendent of Police,
Krishnagiri District,25 the Madras High Court held that even thought Section 18 prohibits the
employers from giving immunity to office bearer in respect of the act done by him but when
there is violation of any law by the employer, it is open to the office-bearer of the union to
approach the appropriate authority under the Factories Act, 1948 or to initiate proceedings
for unfair labour practice. The court clarified that the immunity under Section 18(1) of the
Trade Unions Act cannot mean that the union must be permitted to achieve its object by
resorting to methods which are not permitted by law.
The Court also held that even if it is presumed that the strike resorted to by members
of the union is valid in law, it does not mean that the union and its members can indulge
in any violent activity. If there is any breach of contract by the employer, the appropriate
provisions are available to be invoked under Industrial Disputes Act but not to increase
pressure on employer by violent means.

24 (1999) 1. LLJ 385.

25 2009 LLR 62.
 Privileges of Registered Trade Unions • 1 2 7

Section 19 grants protection to the agreement (between the members of a registered trade
union) whose objects are in restraint of trade 26 notwithstanding anything contained in
any other law for the time being in force declaring such agreement to be void or voidable.
However, this provision shall not enable any civil court to 'entertain any legal proceedings
instituted for the express purpose of enforcing or recovering damages for the breach of any
agreement concerning the conditions on which any member of trade union shall or shall
not' (i) sell their goods; (ii) transact business; (iii) work; (iv) employ; or (v) be employed.
The Act, however, like a 'closed shop' agreement, does not provide for enforceability
of an agreement between the management and workers trade union. 27 The net effect of the
section is to validate agreement which is invalid being in restraint of trade under Section
27 read with Sections 23 and 24 of the Contract Act, 1872.

A trade union or a large number of employees cannot dictate to the employer to dispense with
the services of an employee if they do not like or approve the presence of certain workman
in the factory. Thus, in AG Kher v. Atlas Copco (India) Ltd28, the management terminated
the services of an employee because the union and majority of workmen did not like the
shape of her nose or the colour of her hair and insisted that her services be terminated. The
management defended the order of termination on the ground that the other workmen and
the union had boycotted her and situation had gone to such a stage that the work of the
factory was likely to be affected. While rejecting the plea of the management, the Bombay
High Court held that (i) the contention is anamolous because the employer has no grievance
against the petitioner and still the employee has been cast off to the wolves. (ii) there cannot
be any justification for the order of dismissal of an employee merely because the other
employees did not like the shape of the nose of the employee or the colour of her hair, (iii)
the employee cannot be removed from service by stroke of pen because a large number of
other employees do not approve of the presence of the employee in the factory premises,
(iv) if such grounds are allowed for termination of services of an employee, it will open a
floodgate of abuse and it would amount to closed-shop policy.29

26 Section 27 of Indian Contract Act dealing with agreement in restrain of trade reads:
Every agreement by which any one is restrained from exercising a lawful profession, trade or
business of any kind, is to that extent void.
Exception 1: One who sells the goodwill of a business may agree with the buyer to refrain from
carrying on a similar business, within specified local limits, so long as the buyer, or any person
deriving title to the goodwill from him, carries on a like business therein; provided that such limits
appear to the Court reasonable, regard being had to the nature of the business.
27 Tulsidas Paul v. Second Labour Court, AIR 1963 Calcutta 624.
28 (1992) 1 LLJ 423.
29 For details see chapter 4 Section VI closed shop/union shop.
Recognition of
Trade Unions 10
Recognition of trade unions is the backbone of collective bargaining. It has been debated time
and again. But, in spite of the government's stated policy to encourage trade unions, there is no
enforced central legislation on the subject. There are, however, voluntary codes of discipline
and legislation in some states. In the absence of any central legislation, management in several
states (except where legislation on recognition is in force) have refused to recognize trade
unions mainly on five grounds: (i) most of the office-bearers of the union were outsiders,1 (ii)
the trade union keeps outsiders disapproved by management-particularly politicians and
ex-employees} (iii) the union consists of only small number of employees, (iv) there were many
rival unions in existence, (v) the trade union was not registered under the Trade Unions Act,
1926.3 However, none of these objections are maintainable because to accept the same would
amount to interference in the functioning of the trade unions. Be that as it may, the refusal
by employers to recognize or bargain with unions has been a major obstacle to the healthy
growth of trade unions and collective bargaining. 4

The recognition of trade unions is said to have originated in relation to the government with
its servants. Prior to 1933, government servants were prohibited from submitting collective
memorials and petitions. When conceded, this right was granted only to combinations
which conformed to certain rules. Unions which conformed to these rules were ordinarily
granted 'formal recognition' and were allowed to conduct negotiation with government
on behalf of their members.

1 Paramount Films India Ltd v. Their Workmen, (1950) LLJ 690.

2 Report of the Royal Commission on Labour, (1931) 325.
3 Id. at 326.
4 Suresh C Srivastava, 'Trade Unionism in India", Review of Contemporary Law, Brussels and Paris,
(1970), 83.
130 • Industrial Relations and Labour Laws

A. Appointment of the Royal Commission

Problems relating to recognition of trade unions attracted the attention of the Royal
Commission on Labour in 1929. It made a comprehensive survey of almost all the problems
relating to labour (including recognition of trade unions) and recommended that the
'Government should take the lead, in case of its industrial employees, in making recognition
of union easy and in encouraging them to secure recognition.'

B. Legislative Action on the Royal Commission's Recommendation

Legislative attempt was, however, not made until 1943 for compulsory recognition of trade
unions by employers when the Indian Trade Unions (Amendment) Bill, 1943, was placed
before the Central Legislative Assembly. The bill was opposed by the management and,
therefore, it could not be passed. The bill was revised in the light of discussion made in the
assembly and a new bill, namely, the Indian Trade Unions (Amendment) Bill, was introduced
three years later in 1946 in the Central Legislative Assembly. This bill was referred to the
Select Committee which suggested certain amendments. The bill was passed in November
1947 and received the assent of the Governor General on 20 December 1947. But the Trade
Unions (Amendment) Act was never brought into force. Subsequently in 1950, Trade Unions
Bill also incorporated provisions for recognition of trade unions. The bill was moved in the
legislature but it could not be made into an Act.

C. International Labour Organization Convention

At an international level, the concern felt by the International Labour Organization for
evolving an international instrument for recognition of trade unions resulted in ILO
Convention No. 87 on 'Freedom of Association and Protection of the Right to Organize' in
1948 and Convention No. 98 concerning the right to organize and bargain collectively in
1949. The former states:
Workers and employers, without distinction whatsoever, shall have the right
to establish and, subject only to the rules of the organization concerned, to
join organization of their own choosing without previous authorization. The
convention empowers the workers' organization to frame their constitution, to elect
representatives and among others to organize their activities. To establish and join
federations, Article 8 of the Convention requires that workers and employers and
their respective organizations, like all other, shall respect the law of the land. The
law of the land shall not be such as to impair nor shall it be so applied as to impair,
the guarantees provided for in the constitution. The latter confers protection to
workers against acts of anti-union discrimination in respect of their employment.
The protection is, directed in respect to acts calculated to: (a) make the employment
of a worker subject to the condition that he shall not join a union or shall relinquish
trade union membership; and (b) cause the dismissal of, or otherwise prejudice a
worker by reason of union membership or because of his participation in union
activities outside working hours.

D. Plans and Recognition of Trade Unions

Immediately after India became a sovereign democratic republic, the Trade Unions Bill,
1950, concerning the recognition of trade unions through planning was accepted and a
 Recognition of Trade Unions • 1 3 1

Planning Commission was constituted.5In the evolution of labour policy during the plan,
recognition of trade union has been accorded due importance by the planners. Thus, the
Second Five-Year Plan (1956-61) paid considerable attention to the problems of recognition
of trade unions. In view of the fact that 'recognition has strengthened the trade union
movement in some states' the plan recommended that' some statutory provisions for securing
recognition should be made, where such recognition does not exist at present. In doing so,
the importance of one union for one industry in a local area requires to be kept in view'.
The Third Five Year Plan (1961-66) envisaged a marked shift in the policy of recognition of
trade unions. It was stated in the plan that 'the basis for recognition of unions, adopted as a
part of the Code of Discipline will pave the way for the growth of strong and healthy trade
unionism in the country. A union can claim recognition if it has a continuing membership
of at least 15 per cent of the workers in the establishment over a period of 6 months and
will be entitled to be recognized as a representative union for an industry or a local area,
if it has membership of at least 25 per cent of workers. Where there are several unions in
an industry or establishment, the union with the largest membership will be recognized.
Once a union has been recognized, there should be no change in its position for a period of
2 years, if it has been adhering to the Code of Discipline.'

E. First National Commission on Labour

Another landmark in the recognition of trade unions was reached with the appoinbnent of
the National Commission on Labour in 1966. The Commission recommended, inter alia, for
statutory recognition of trade unions but no concrete legislative action was taken till 1978.

F. Industrial Relations Bill, 1978

In 1978, the Industrial Relations Bill, inter alia, incorporated the provisions for recognition of
trade unions. But the bill which was introduced in Lok Sabha in August 1978, lapsed after
the dissolution of the sixth Lok Sabha on 30 August 1978.

G. The Hospital and other Institutions (Settlement of Disputes) Bill, 1982

The bill provides for the recognition of trade unions of workmen. A trade union will not be
considered for recognition with respect to an establishment for the purposes of legislation
unless it is registered under the Trade Unions Act and each of its office-bearers is a workman
in such establishment or any other establishment. In order to be entitled for recognition, such
a trade union must have the support of the majority of workmen in the establishment. The
representatives of workmen on the Grievance Settlement Committee, Local Consultative
Council and Consultative Council would be nominees of recognized trade unions.
To sum up, the existing arrangement for the recognition of trade unions reveals
that no legislative step at central level has been effectively introduced and enforced for
recognition of trade unions. The voluntary arrangement for recognition of trade unions as
we shall presently see, has failed to deliver the goods for want of adequate implementation
machinery.

5 Govt. of India, Report of the Committee on Labour Welfare (1969), 15.

132 • Industrial Relations and Labour Laws

A. Constitution and Recognition of Trade Unions

Is the right to grant recognition to trade unions a fundamental right within the meaning of
Article 19 (1) (c) of the Constitution? This has been answered in negative 6 because the right
to form an association does not carry with it the concomitant right7 that the association
should be recognized by the employers. Hence, neither withdrawal of recondition8 of the
union nor the discontinuance of recognition9 infringes on the fundamental rights guaranteed
under Article 19(1) (c) of the Constitution.

B. Legislative Measures
In some industrially advanced countries such as the United States of America, Canada,
Columbia and Bahrain, collective bargaining and voluntary arbitration have developed
considerably and statutory provisions have been made for determining the representative
character of trade unions.
1. Trade Unions Act, 1926
The Trade Unions Act does not make any provision for recognition of such a union. Any
recognition of union, even if it is a union relating to the employees of the Central Government,
is governed by some deparbnental circulars. Those circulars are administrative in nature
and not statutory. Therefore, those circulars also cannot be enforced in a writ petition. 10

2. Trade Unions (Amendment) Act, 1947

In India, it has been observed earlier, that there is no central enacbnent governing recognition
of 'trade unions'. The Trade Unions (Amendment) Act, 1947, however, provided for
recognition of unions: (z) by agreements; and (iz) by order of the court on satisfying the
conditions laid down in relevant sections of the act. But the Act, as stated earlier, has not
been enforced.
a. Machinery for Determination of Representative Unions: Section 28E of the Trade
Unions (Amendment) Act, 1947, empowers the labour courtto grantrecognition where
a registered trade union having applied for recognition to an employer fails to obtain
the same within a period of 3 months.
b. Conditions for Recognition. Section 25D provides that a trade union shall not be
entitled for recognition by order of a labour court under Section 25E unless it fulfils
the following conditions, namely:

6 A CMukerjeev. Union of India, (1972) 2 LLJ1978 (Calcutta);MA Davidv. KSE Board, (1973) 2 LLJ 466,
(Kerala) 1973; Tamil Nadu Electricity Board Accounts Executive Staff Union v. Tamil Nadu Electricity
Board, Madras, (1980) 2 LLJ 246.
7 All India Bank Employees Association v. National Industrial Tribunal, (1961) I LLJ 375; Raghubir Dayal Jai
Prakash v. Union of India, AIR 1962 SC 363; DAV College Jullunderv. State of Punjab, AIR 1971 SC 1737.
8 MA David v. KSE Board, op. cit., supra note 6.
9 Tamil Nadu Electricity Board, op. cit., supra note 6.
10 KV Sridharan v. S Sundamoorthy, 2009 LLR 414.
 Recognition of Trade Unions • 1 3 3

(a) that all its ordinary members are workmen employed in the same industry or in
industries closely allied to or connected with another;
(b) that it is representative of all the workmen employed by the employer in that
industry or those industries;
(c) that its rules do not provide for the exclusion from membership of any class of
workmen referred to in clause (b);
(d) that its rules provide for the procedure for declaring a strike;
(e) that its rules provide that a meeting of its executive shall be held at least once in
every 6 months;
(f) that it is a registered trade union and that it has complied with all provisions of
this Act.
The aforesaid provisions of the Act raise various problems: (i) Can an employer
voluntarily recognize a union which is not registered under the Act and which is in fact
a majority union? (ii) Can an employer be compelled to recognize more than one union?
Notwithstanding the relative importance of these questions and rather unsatisfactory answer
that we get from the statute, the significance of Trade Unions (Amendment) Act, 1947,must
not be overlooked. But, even this could not be put into force.
c. Rights of Recognized Trade Unions: The recognized trade unions have been
conferred the right to negotiate with employers in respect of matters connected with
employment, non-employment, the terms of employment or the conditions of labour
of all or any of its members, and the employer is under an obligation to receive and
send replies to letters sent by the executive and grant interviews to them regarding
such matters.
d. Withdrawal of Recognition of Trade Unions: Under Section 28G of the Trade Unions
(Amendment) Act, 1947, the Registrar or the employer is entitled to apply to the
labour court in writing for the withdrawal of recognition on any one of the following
grounds:
(a) that the executive or the members of the trade union have committed any unfair
practice set out in Section 28 J within 3 months prior to the date of the application;
(b) that the trade union has failed to submit any return referred to in Section 281;
(c) that the trade union has ceased to be representative of the workmen referred to
in Clause (b) of Section 28 D.
On receipt of the application, the labour court is required to serve a show cause
notice in the prescribed manner on the trade union as to why its recognition should not be
withdrawn. If the court is satisfied that trade union did not satisfy conditions for the grant
of recognition, it shall make an order declaring the withdrawal of recognition.
The aforesaid provisions raise a question as to whether recognition of trade union can
be withdrawn on the ground that recognized trade union has lost its status as a representative
union.
e. Re-recognition of Trade Unions: Section 28H of the Trade Unions (Amendment) Act,
1947, permits the registered trade union whose recognition is withdrawn under sub-
section (3) of Section 28G to make an application for re-recognition after 6 months
from the date of withdrawal of recognition.
134 • Industrial Relations and Labour Laws

3. The Trade Unions Bill, 1950

In 1950, the Trade Unions Bill, 1950 was introduced in the Parliament. The bill was primarily
a consolidating measure, but there were some new provisions which were added namely:
(a) A trade union of civil servants shall not be entitled to recognition by the appropriate
government if it does not consist wholly of civil servants or if such union is affiliated
to a federation of trade unions to which a trade union consisting of members other
than civil servants is affiliated.
(b) A trade union shall not be entitled to recognition by an employer in relation to any
hospital or educational institution by order of a labour court if it does not consist
wholly of employees of any hospital or educational institutions, as the case may be.
(c) A trade union consisting partly of supervisor and partly of other employees, or
partly of watch and ward staff and partly of other employees shall not be entitled
to recognition by an employer by order of a labour court.
The bill also provided for recognition of trade unions where application for recognition
was made by more than one union. The trade union having the largest membership
gets preference over others. The recognized unions are given rights such as collecting
subscriptions, holding meetings on employer's premises and of collective bargaining. The
labour court is empowered under the bill to order for recognition of unions. The bill could
not, however, be brought in the form of the Act because of opposition by several quarters.
The bill lapsed on the dissolution of the legislature.

4. State Legislation
In some states, there are legislations on the recognition of trade unions. These legislations
may be briefly discussed:
(a) Maharashtra: The Maharashtra Recognition of Trade Unions and Prevention of
Unfair Labour Practice Act, 1972, provides for the recognition of trade unions for facilitating
collective bargaining for certain undertakings and confers certain rights and obligations
upon recognized trade unions and also confers certain powers on unrecognized trade
unions.11 The Act is applicable in every undertaking employing 50 or more employees on
any day of the preceding 12 months. 1 The application of the Act can be extended by the
state government even in undertakings employing less than 50 employees.13 In order to be
registered as recognized trade union (z) the trade union must have a total membership of
30 per cent in the said undertaking; (iz) it must be in existence for the last 6 months; and (iii)
it must make an application in the prescribed form to the industrial court. 14
When such an application is made and is found to be in order, a notice shall be
issued and after considering the objections and holding enquiries, if any, the union would
be recognized and a certificate would be issued. On the contrary, if a counter claim is put
forward by any other union and it is found that union has the largest number of employees
employed in the undertaking, and if that other union also fulfils the requirements which the
applicant-union also fulfils for being recognized, then the industrial court is empowered

11 See the Preamble of the Act.

12 Section 10(1).
13 Proviso to Section 10(1).
14 Section 11.
 Recognition of Trade Unions • 135

to grant recognition and issue a certificate not to the applicant union but to the other union
which has the largest number of employees employed in the undertaking. 15
(b) C P and Berar: The C P and Berar Act, 1947 lays down the following conditions for
recognition of unions:
(i) The membership of union is open to all employees irrespective of caste, creed
or colour;
(ii) The union has for the whole of the period of 6 months next preceding the date
of application, membership of not less than between 15 and 20 per cent as the
state government may prescribe for that local area of the employees employed
in the industry in that area;
(iii) The constitution of the union shall be such as may be provided under this Act.
(c) Madhya Pradesh: The Madhya Pradesh Industrial Relations Act, 1960, provides
that a union for the purpose of recognition shall have 'not less than 25 per cent of
the total number of employees employed in the industry in such local area'.

C. Tribunal's Response
The attempt of the union to bring the question of its recognition by management within
the purview of 'industrial dispute' proved futile. The industrial tribunal has consistently
rejected the union's claim for its recognition by the management on the grounds that:
(i) the refusal to recognize the union was not an 'industrial dispute' within the meaning
of the Industrial Disputes Act, 1947,16 (iz) the specific remedy was provided in the Trade
Unions (Amendment) Act, 1947, (unenforced); and (iii) the tribunal cannot take the task
which the labour courts are required to perform. 17

D. Non-statutory Code of Discipline in Industry

To fill the lacuna in the Central Law, the 16th Session of the Indian Labour Conference provides
for the recognition of trade unions. It lays down the following criteria for their recognition:
1. Where there is more than one union, a union claiming recognition should have been
functioning for at least one year after registration. Where there is only one union, this
condition would not apply;
2. The membership of the union should cover at least 15 per cent of the workers in the
establishment concerned. Membership would be counted only of those who had paid
their subscription for at least 3 months during the period of 6 months immediately
preceding the reckoning;
3. A union may claim to be recognized as a representative union for an industry in a
local area if it has a membership of at least 25 per cent of the workers of that industry
in that area;
4. When a union has been recognized, there should be no change in its position for a
period of 2 years;

15 Pfizer Employees' Union v. Mazdoor Congress, (1980} 1 LLJ 65 (Bombay).

16 Premier Automobiles Ltd. v. KS Wadke, (1975) 2 LLJ,445; TCC Thozhilali Union v. TCC Ltd, (1982) 1 LLJ
425; Premier Construction Co. Ltd v. Their Workmen, (1949) ICR 708, Beedi Factory v. Their Employees,
(1950) LIJ 207; Nellimarla Jute Mills Co. Ltd v. Their Staff, (1950) LLJ 394.
17 Ibid.
136 • Industrial Relations and Labour Laws

5. Where there are several unions in an industry or establishment, the one with the largest
membership should be recognized.
6. A representative union for an industry in an area should have the right to represent
the workers in all the establishments in the industry, but if a union of workers in a
particular establishment has membership of 50 per cent or more of the workers of that
establishment, it should have the right to deal with matters of purely local interest
such as, for instance, the handling of grievances pertaining to its own members. All
other workers who are not members of that union might either operate through the
representative union for industry or seek redress directly.
7. In the case of trade union federations which are not affiliated to any of the four central
organizations of labour, the question of recognition would have to be dealt with
separately.
8. Only unions which observed the Code of Discipline would be entitled to recognition.
The code, however, has not been effectively implemented and it is respected more
in its breach than in its observance. The failure of enforcement machinery of the code is
revealed by the fact that during 1960-70,10,402 cases of breach of Code of Discipline were
reported. In addition to this, there are numerous unreported cases as well. The Central
Implementation and Evaluation Division has done much work in this regard. The division
secured recognition to 24 unions during 1968-70.18 Faced with the problem of infringement
of the Code of Discipline, the committee took certain decisions:
(1) When a union is recommended for recognition by the implementation machinery
after proper verification of its membership, the employer should recognize it within a
month. If he fails to do so, he should be considered responsible for infringement of the
Code of Discipline and action should be taken against him by the central organization
concerned;
(2) A union which is not affiliated to any of the four central organizations of workers
should wait for a period of one year after it has accepted the Code of Discipline before
its claim for recognition can be considered;
(3) When the breach of the code by a union has been established by the appropriate
implementation machinery, it would be open to the employer concerned to de-
recognize the union.
However, the question of recognition of the union by the employer raises various
doubts: (z) whether the gap in law will be filled by the provisions of the code? (ii) whether
the provisions of the code particularly regarding the recognitions of the union can effectively
be implemented? (iii) whether the provisions of code have also been adopted by such
organizations and unions which are not affiliated to central federation?
The division bench of the Madras High Court in Tamil Nadu Electricity Board v. Tamil
Nadu Electricity Board Accounts and Executive Staff Union 19 gave a helping hand in strengthening
provisions for recognition of trade union under the voluntary Code of Discipline. In this
case, the name of the petitioner was changed from Tamil Nadu Electricity Subordinates
Union to Tamil Nadu Electricity Board Accounts and Executive Staff Union. Originally,
the membership was open to all workmen who were engaged in clerical, accounting and
other work. The coverage was extended to employees covered under Section 2 (i) of the

18 Government of India, Annual Report of the Ministry of Labour and Employment of Relevant Years.
19 1981 Lab. IC 1138.
 Recognition of Trade Unions • 1 3 7

Industrial Employment (Standing Orders) Act, 1946. This change was communicated to the
management with a request to accord recognition to the changed name of the trade union
but the management withdrew recognition without giving a notice on the ground that the
recognition granted to it was for clerical workmen and not to workmen covered by Section
2 (i).Aggrieved by this order, the union preferred a writ petition in the Madras High Court;
single judge of the High Court allowed the petition. It was submitted by the management
that the writ petition was not maintainable because recognition was not granted under any
statute. Rejecting the contention, Chief Justice Ismail, observed:
[T]he Code of Discipline in industry does contemplate recognition and that it
was only under that Code that recognition was applied for and granted. It is
not disputed that the grant of recognition confers a status on a body like the
respondent union to represent the workers in a particular category with reference
to their service conditions, with the management; in other words, it becomes a
bargaining agent on behalf of the group of workers with reference to which it was
recognized. Withdrawal of that status or recognition will certainly bring about
adverse consequences on a body like the respondent union, and with reference to
such adverse consequences, even an order of withdrawal like the one made by the
appellant if it is illegal or is in violation of principles of natural justice, certainly
a body like the respondent union can approach this court under Art. 226 of the
Constitution. Therefore we reject the contention of the learned counsel for the
appellant that the writ petition was not maintainable.
It is thus evident that courts may interfere under Article 226 of the Constitution even
where the recognition granted by the employer under the non-statutory Code of Discipline
is withdrawn on flimsy grounds or erroneous basis or in violation of the principles of
natural justice.
Do principles of natural justice apply in the de-recognition of a trade union recognized
under the Code of Discipline by the management? This issue was raised in Secretary, Meters
Staff Association v. Union Electrical Industries Ltd. 20 Here, the staff association was recognized
by a government company wholly owned and controlled by the government under the Code
of Discipline. After some time, the recognition enjoyed by the association was withdrawn.
Thereupon, the association filed a writ petition before the Kerala High Court. The questions
arose: (i) whether the discretion exercised by the management to derecognize the association
could be interfered with under Article 226? and (iz) whether the management is bound to
apply the principles of natural justice in derecognizing a union? While dealing with these
questions, the court observed:
Recognition certainly confers a status on the union to represent the workers and
as a bargaining agent, unions have come to enjoy various facilities by virtue of
such status. De-recognition involves deprivation of such status, right and facilities.
It certainly involves serious adverse consequences. No doubt the decision to de-
recognize a particular union can be regarded as an administrative decision or
order. Nevertheless, since it involves serious adverse consequences to the union
and the employees organized under the union, their right to hearing before the
decision is taken has certainly to be recognized, as part of the principle of fair play
in action. If the decision is taken without giving a hearing to the union, it has to be
regarded as violative of principles of natural justice and must be treated as void. 21

20 (1984) 2 LLJ 446.

21 Id. at 449.
1 3 8 • Industrial Relations and Labour Laws

In the absence of any statutory recognition of trade unions, the question has arisen
whether a civil suit is maintainable on an action by a trade union under the voluntary Code
of Discipline? This issue was answered in the negative in TC C Thozhilali Union v. TCC Ltd. 22
In this case, the management and workers represented by six unions arrived at a settlement
over the then existing differences and drew up a memorandum of settlement. The settlement
inter alia, provided that the management recognized all the six unions as the collective
bargaining agents of the workmen. The settlement was operative for 4 years and was to be
governed by the Code of Discipline. When the period of 4 years was about to expire, the
company refused to allow the plaintiffs union to enter into a 'Long Term Settlement'. The
union then filed a civil suit praying that the management be restrained from entering into
any settlement or agreement with other unions. The trial court dismissed the suit. The lower
appellate court, on appeal by the union upheld the findings of the court below. The union
thereupon filed a second appeal before the Kerala High Court which observed:
The position, therefore, is-(i) 'recognition dispute' is an industrial dispute; (ii)
recognition is a matter of volition on the part of the employer; (iii) a trade union
has neither common law right nor statutory right which enables and entitles it to
compel an employer to give recognition to it as the bargaining agent of its members;
and (iv) since it has no such common law right, a 'recognition disputed', cannot be
said to be one emanating from, and emerging out of, any right under the general
common law; and, therefore (v) principle No. 2, stated by the Supreme Court in
the Premier Automobiles case is not attracted to a 'recognition dispute', no matter
that a trade union has no such right under any statute either.
The court held that the lower courts rightly held that the suit brought by the union in
respect of the 'recognition dispute' could not be entertained by a civil court.

E. Claim of Trade Union for Recognition Based on Circulars-Not Maintainable

In KV Sridharan v. S Sundaramoorthy23, the division bench of the Madras High Court held
that the Trade Unions Act, 1926 does not make any provision for recognition of a union
based on circular. Any recognition of union, if it is a union relating to the employees of
the Central Government, is governed by some deparbnental circulars. These circulars are
administrative in nature and not statutory. Therefore, these circulars cannot be enforced
in a writ petition.
The aforesaid view was reiterated in Port and Dock Labour Union affiliated to Bharatiya
Mazdoor Sangh v. Union ofIndia 24 • In this case, the petitioner-trade union sought a declaration
by Chennai Port Trust that it was a recognized trade union entitled to statutory benefits under
a circular issued by the government. The Madras High Court rejected the claim and held
that in the absence of any law relating to trade union recognition in the state of Tamil Nadu,
the claims of the union can be based only upon the circulars and various communications
issued by the ministry. In fact, as per the communication issued by the registry, pending
finalization of policy by the ministry, the first seven unions alone have to be recognized and
as rightly held by the Port Trust, those seven unions even as per the check-off verification
conducted during 2010, are having more membership than the petitioner union.

22 TCC Thozhilali Union v. TCC Ltd, (1982) lLLJ 425 at 428-29.

23 (2009) 3 MLJ 1320.
24 (2012) 1 LLJ 650.
 Recognition of Trade Unions • 139

F. Secret Ballot Method for Determining the Representation

Character of Trade Union
In Food Corporation of India Staff Union v. Foods Corporation of India 25, the Food Corporation
of India (FCI) and the union representing the workmen agreed to follow the secret ballot
method for determining the representative character of the trade union. They approached
the Supreme Court to lay down as to how the method of secret ballot should be tailored
to yield the correct result. Keeping in view the importance of the matter, the Court issued
notice to all the major all India trade union organizations on this aspect. Pursuant to this
notice, some trade union organizations appeared and were heard by the Court. The Supreme
Court, after perusing various documents and records, directed that the following norms and
procedure shall be followed for assessing the representative character of the trade unions
by the secret ballot system:
(i) As agreed to by the parties, the relative strength of all the eligible unions by way
of secret ballot be determined under the overall supervision of the Chief Labour
Commissioner (Central) (CLC).
(iz) The CLC will notify the returning officer who shall conduct the election with the
assistance of the FCI. The returning officer shall be an officer of the Ministry of Labour,
Government of India.
(iii) The CLC shall fix the month of election while the actual date/dates of election shall
be fixed by the returning officer.
(iv) The returning officer shall require the FCI to furnish sufficient number of copies of the
lists of all the employees/workers (Categories III and IV) governed by the FCI (Staff)
Regulations, 1971 borne on the rolls of the FCI as on the date indicated by the CLC.
The list shall be prepared in the proforma prescribed by the CLC. The said list shall
constitute the voters list.
(v) The FCI shall display the voters list on the notice board and other conspicuous places
and shall also supply copies thereof to each of the unions for raising objections, if any.
The unions will file the objection to the returning officer within the stipulated period
and the decision of the returning officer shall be final.
(vz) The FCI shall make necessary arrangement to:
(a) give wide publicity to the date/dates of election by informing the unions and by
affixing notices on the notice boards and also at other conspicuous places for the
information of all the workers;
(b) print requisite number of ballot papers in the proforma prescribed by the CLC
incorporating therein the names of all the participating unions in an alphabetical
order after different symbols of respective unions;
(c) the ballot papers would be prepared in the proforma prescribed by the CLC in
Hindi/English and the regional language concerned;
(d) set up requisite number of polling stations and booths near the premises where
the workers normally work; and
(e) provide ballot boxes with requisite stationary, boards, sealing wax, etc.

25 1995 supp (1) sec 678 (SC).

140 • Industrial Relations and Labour Laws

(vii) The returning officer shall nominate a presiding officer for each of the polling stations/
booths with requisite number of polling assistants to conduct the election in an
impartial manner. The presiding officers and the polling assistants may be selected
by the returning officer from amongst the officers of the FCI.
(viii)The election schedule indicating the nominators, scrutiny of nomination papers,
withdrawal of nomination, polling, counting of votes and the declaration of results
shall be prepared and notified by the returning officer in consultation with the FCI.
The election schedule shall be notified by the returning officer well in advance and at
least one month's time shall be allowed to the contesting unions for canvassing before
the date of filing the nominations.
(ix) To be eligible for participating in the election, the unions must have valid registration
under the Trade Unions Act, 1926 for one year with an existing valid registration on
the first day of filing of nomination.
(x) The presiding officer shall allow only one representative to be present at each polling
station/booth as observer.
(xz) At the time of polling, the polling assistant will first score out the name of the employee/
workman who comes for voting, from the master copy of the voters list and advice
him thereafter to procure the secret ballot paper from the presiding officer.
(xii) The presiding officer will hand over the ballot paper to the workman/ employee
concerned after affixing his signatures thereon. The signatures of the workman/
employee casting the vote shall also be obtained on the counterfoil of the ballot
paper. He will ensure that the ballot paper is put inside the box in his presence after
the voter is allowed to mark on the symbol of the candidate with the inked rubber
stamp in camera. No employee/workman shall be allowed to cast his vote unless he
produces his valid identity card before the presiding officer concerned. In the event of
non-production of identity card due to any reason, the voter may bring in an
authorization letter from his controlling officer certifying that the voter is the bona
fide employee of the FCI.
(xiiz)After the close of the polling, the presiding officer shall furnish detailed ballot paper
account in the proform prescribed by the CLC indicating total ballot papers received,
ballot papers used, unused ballot papers available, etc., to the returning officer.
(xiv)After the close of the polling, the ballot boxes will be opened and counted by the
returning officer or his representative in the presence of the representatives of each of
the unions. All votes which are marked more than once, spoiled, cancelled or damaged,
etc., will not be taken into account.
(xv) The contesting unions through their representatives present at the counting place may
be allowed to file applications for re-counting of votes to the returning officer. The
request would be considered by the returning officer and in a given case, if he is satisfied
that there is reason to do so, he may permit re-counting. However, no application for
re-counting shall be entertained after the results of the poll are declared.
(xvz)The result of voting shall be compiled on the basis of valid votes polled in favour of
each union in the proforma prescribed by the CLC and signatures obtained thereon
from the representatives of all the unions concerned as a proof of counting having
been done in their presence.
(xvii) After declaring the result on the basis of the votes polled in favour of each union by
the returning officer, he will send a report of his findings to the CLC.
 Recognition of Trade Unions • 141

(xviiz) The union/unions obtaining the highest number of votes in the process of election
shall be given recognition by the FCI for a period of 5 years from the date of the
conferment of the recognition.
(xix)It would be open to the contesting unions to object to the result of the election or
any illegality or material irregularity which might have been committed during the
election. Before the returning officer such objection can only be raised after the election
is over. The objection shall be heard by the CLC and disposed of within 30 days of the
filing of the same. The decision of the CLC shall be final, subject to challenge before a
competent court, if permitted under law.
The Court also held that it would be open to the CLC to deal with any situation
not covered by the procedure detailed above. He may do so in consultation with the
returning officer and the FCI. The Court accordingly directed the CLC and the FCI to
hold election in accordance with the procedure prescribed by this order on the date
specified therein.

G. Method of Recognizing a Trade Union

In MR P Workers Union v. Govt of Tamil Nadu 26, it was held in the absence of specific statutory
provisions in the Trade Unions Act, 1926 for recognition of trade union as representative
body of workmen in the industry, the same would be determined by state government and
labour commissioner. On receipt of such an application, the concerned labour commissioner
will issue notice to the two unions, within 2 weeks from the date of receipt of the application,
calling upon them to submit their membership registers and the necessary supportive
documents under the Code of Discipline within 2 weeks from the date of receipt of the notice
by them. The notice will call upon them to produce their records as per the Code of Discipline
during the period of 6 months prior to the date of notice. The labour commissioner shall
thereafter proceed to decide as to which union is the representative union of the workmen:
The Court observed that we cannot permit the management to say that:
The union which shows larger membership at the end of the exercise will not be
recognized by the management. Recognition is for the purpose of representing
the causes of the workmen in various forum before the management and various
authorities under the labour law. It is not a determination available for the sole
satisfaction of the management. It is a factual determination and the determination
leads to a status. The union which establishes larger membership at the end of the
aforesaid exercise, shall be recognized as the representative union.
In Petrolium Employee's Union v. Chief Labour Commissioner27, the Court ruled that
once a trade union has given its consent for verification of membership by secret ballot, it
is estopped from challenging the same in a writ petition.

H. Rights of Unrecognized Unions

The management is obliged to hear a trade union registered though not recognized and
resolve its dispute as far as possible without resorting to conciliation or adjudication
processes. Though the management is not obliged to recognize a trade union but at the

26 (2009) 4 LLJ 685.

27 2010 LLR 214.
142 • Industrial Relations and Labour Laws

same time, it cannot refuse to hear grievances voiced by it in respect of service conditions
or its members. There is no provision in the Industrial Disputes Act or Trade Unions Act
prohibiting the management from negotiating, discussing or entering into settlement with an
unrecognized union. It is only in case where the demands of unrecognized union are already
seized of by the recognized union, such demand would not be maintainable. Direction can
be given to management falling under Article 12 of the Constitution.28
The Supreme Court, in Chairman, State Bank of India v. All Orissa State Bank Officers
Association29 delineated the rights of recognized and unrecognized trade unions, while
interpreting the provision of Rule 24 of the verification of membership and recognition of
Trade Union Rules, 1974 framed by the state of Orissa which is as follows:
22(a) Rights of Unrecognized Union-to meet and discuss with the employer
or any person appointed by him in that behalf the grievances of any individual
member relating to his service conditions.
22(b) To appear on behalf of its members employed in the establishment in any
domestic or deparbnental enquiry held by the employer and before the conciliation
officer/labour court/industrial tribunal or arbitrator.
While interpreting the aforesaid clause, the Court held that an unrecognized trade
union unlike 'recognized trade union' has (i) no right to participate in the discussions/
negotiations regarding general issues affecting all workmen/ employees; and (iz) settlement,
if any, arrived at as a result of such discussion/ negotiations is not binding on all workmen/
employees. But it has (i) the right to meet and discuss with the management/employer
about the grievances of any individual member relating to his service conditions; and
(ii) to represent an individual member in domestic inquiry or deparbnental inquiry and
proceedings before the conciliation officer and adjudicator.
The Court gave two reasons in support of its conclusion: (z) the right of the citizens
of this country to form an association or union is recognized under Article 19(1) (c) of the
Constitution; (ii) for the sake of industrial peace and proper administration of the industry,
it is necessary for the management to seek cooperation of the entire work force.
The Court added that the very fact that certain rights are vested in a non-recognized
union shows that the Trade Unions Act, 1926 and the rules framed thereunder acknowledge
the existence of a non-recognized union. Such a union is not a superfluous entity and it
has relevance in specific matters relating to administration of the establishment. Thus,
the management/ employer cannot outrightly refuse to have any discussion with a non-
recognized union in matters relating to service conditions of individual members and other
matters incidental thereto.

I. Response of the First National Commission on Labour

(a) Scheme for recognition: The First National Commission on Labour has recommended
compulsory recognition of trade unions by the employers under the central
legislation in industrial undertakings employing 100 or more workers or where the
capital invested is above the stipulated size. In order to claim recognition by the
individual employer, the union must have the total membership of 30 per cent of

28 See Indian Airlines Ltd case, 1997 FLR 489.

29 2000 Lab. I.C. 2153.
 Recognition of Trade Unions• 143

the plant or establishment. The industry-wise union in local area may, however,
be recognized if the minimum membership is 25 per cent. The commission has
recommended that where recognition is sought by more than one union, the larger
union should be recognized. But the commission was in favour of recognition of
industry-wise union over plant or unit union. The commission's recommendations
are open to several objections: First, recognition of either industry-wise union or
unit-wise union may lead to industrial unrest and rivalry. Second, the two alternative
choices given to Industrial Relations Commission may also lead to confusion and
thus, no uniform method may be followed. It may, in effect, affect industrial peace
and harmony.
(b) Mode of determination of representative character. The National Commission on Labour
has suggested alternative methods, namely, 'verification' and 'ballot'. It suggested
that the proposed Industrial Relations Commission should be empowered to decide
the representative character of union either by examination of membership or holding
an election through secret ballot of all employees. The alternative choice given by the
National Commission may also lead to confusion and thus no uniform method may
be followed. It may, in effect, also affect industrial peace and harmony. Out of the two
methods, the secret ballot method is a democratic method and is more acceptable for
a welfare society like ours.
(c) Machinery for determination of representative character: The National Commission
recommended that the Industrial Relations Commission at centre and states (as
proposed by the commission) should be empowered to issue certificates to unions as
representatives for collective bargaining.
(d) Right of recognized trade unions: The National Commission on Labour recommended
that the recognized trade unions should be given certain rights and privileges such
as: (i) right of sole representation; (ii) entering into collective agreement on terms of
employment and conditions of service; (iii) collection of membership subscription
within the premises of the undertaking, the right to check-off; (iv) holding discussion
with deparbnental representatives of its workers-members within factory premises;
(v) inspecting by prior agreement the place of work of any of its members; and (vz)
nominating its representatives on works/ grievance committees and other bipartite
committees. As regards the rights of unrecognized trade unions, the commission
suggested that they should enjoy the right to represent individual grievances relating
to termination of service and other conditions of service.
The proposed rights of recognized trade unions suggested by the National Commission
on Labour has been subject of criticism by AITUC and other organizations. According
to them, the proposed rights are inadequate. They suggested that more rights should be
conferred upon the recognized trade unions.

J. Trade Unions and Industrial Disputes (Amendment) Bill, 1988.

The bill seeks to provide for the constitution of a bargaining council to negotiate and
settle industrial disputes with the employer. Thus, under Chapter 11-D, every employer is
required to establish a bargaining council for the industrial establishment for which he is the
employer consisting of representatives of all the trade unions having membership among
the workmen employed in the establishment, not being trade unions fenced on the basis of
craft or occupation; each trade union being called a bargaining agent.
144 • Industrial Relations and Labour Laws

Where there are more than one trade unions having members among the workmen
employed in an industrial establishment, the representation of all such trade unions on the
bargaining council shall be in proportion to the number of the members in that establishment
as determined under the Trade Unions Act, 1926.
The trade union with the highest membership of workmen employed in that
establishment and having in no case, less than 40 per cent of the total membership among
the workmen shall be known as the principal bargaining agent.
Where there is only one trade union having members among the workmen employed
in an industrial establishment, that trade union shall be the bargaining council for that
establishment and such bargaining council shall also act as the sole bargaining agent.
The chairman of the bargaining council shall be a person chosen by the principal or
sole bargaining agent from amongst its representatives. However, if there is no trade union
having membership of at least 40 per cent of the total membership of the trade unions of
workmen in an industrial establishment, the one with the highest membership among
the workmen employed in the establishment shall have the right to nominate one of its
representatives as the chairman of the bargaining council.
If there is no trade union having members among the workmen employed in an
industrial establishment, a workmen's council shall be established by the employer in the
prescribed manner and such workmen's council shall be the bargaining council for that
establishment.
The state government is empowered to establish a bargaining council in a class of
industry in a local area in respect of which it is the appropriate government on the basis of
the relative strength of the trade unions of workmen concerned as determined under the
provisions of the Trade Unions Act, 1926, in such manner as may be prescribed.
Similarly the Central Government may establish a bargaining council in respect of
an industrial undertaking or a class of industry in respect of which it is the appropriate
government on the basis of the relative strength of the trade unions of workmen concerned
as determined under the provisions of the State Trade Unions Act in the prescribed manner.
The Central Government is also empowered to set up, in consultation with the state
government concerned, a council at the national level to be called the National Bargaining
Council in respect of a class of industry or a group of central public sector undertakings in
relations to which the appropriate government is the state government.
The National Bargaining Council shall comprise representatives of the Central
Government, the state government concerned, employers or trade unions of employers
and trade unions of workmen, being represented in proportion to their relative strength of
membership as determined under the provisions of the Trade Unions Act, 1926.
Every bargaining council establishment under Section 9, other than a national
bargaining council establishment shall be registered with the labour court in such manner
as may be prescribed.
The term of office of bargaining council registered under this chapter shall be 3 years.
A registered bargaining council shall, subject to the provisions of this Act be entitled:
(a) to raise industrial disputes with the employer or employers;
(b) to settle industrial disputes with the employer or employers;
(c) to sign on behalf of the workmen the documents settling industrial disputes;
 Recognition of Trade Unions • 145

(d) to represent the workmen in any industrial dispute; and

(e) to exercise such other powers as may be prescribed.
Where a labour court finds a bargaining agent guilty of indulging in all or any of the
unfair labour practices listed at item No. 1 (illegal strike), item No. 5 (in so far as it relates
to go slow) and item No. 8 (violence) of Part II of the Fifth Schedule, it may disqualify such
bargaining agent to function for such period as may be determined by it.

K. Response of the Second National Commission on Labour

The (Second) National Commission on Labour which submitted its report to the Government
of India on 29 June 2002 has recommend that the negotiating agent should be selected for
recognition on the basis of the check off system. A union with 66 per cent membership be
entitled to be accepted as the single negotiating agent, and if no union has 66 per cent support,
then unions that have the support of more than 25 per cent should be given proportionate
representation on the negotiating college. The commission also suggested that recognition
once granted, should be valid for a period of 4 years, to be coterminus with the period of
settlement. The individual workers' authorization for check off should also be coterminus
with the tenure of recognition of the negotiating agent or college.

L. An Appraisal
A central law on recognition of trade union is the need of the hour. It should provide for
the compulsory recognition of trade unions. It is necessary in the interest of both trade
unions and employers. It will also facilitate the settlement of disputes and will make such
settlements more enduring. It will also, in effect, prevent the number of disputes which arise
from inter-union rivalry. Indeed, it will impose a legal obligation upon the disinterested
and adamant employers to recognize a representative trade union for the purposes of
collective bargaining. This will also bring into application uniform standards for all trade
unions seeking recognition.
Collective Bargaining 11
In the era of laissez faire, employers enjoyed unfettered right to hire and fire. They had
vastly superior bargaining power and were in a position to dominate over workmen
in every conceivable way. They naturally preferred to settle terms and conditions of
employment of workmen and abhored statutory regulation thereof unless, of course, it
was to their advantage. However, this tendency brought to the surface the potentialities
of collective bargaining. The only way to improve the situation was to do away with the
domination of any one class over another. The emergence of legal recognition of united
power is based upon the strong bargaining power of management as against weak and
unorganized workmen. Collective bargaining 'is the foundation of this movement and it
is in the interest of labour that statutory recognition has been accorded to trade unions,
and their capacity to represent workmen, who are members of such bodies. But, of
course, there are limits to this doctrine, for otherwise, it may become tyranny, stifling the
freedom of an individual worker. It is not the law that every workmen must necessarily
be a member of the trade union, and that outside its fold, he cannot exercise any volition
or choice in matters affecting his welfare ... The representative powers of organization of
labour, with regard to enactments, such as the Industrial Disputes Act, will have to be
interpreted in the light of the individual freedoms guaranteed in the Constitution and
not as though such freedoms did not independently exist, as far as organized labour is
concerned. ' 1
The system of collective bargaining as a method of settlement of industrial disputes
has been adopted in industrially advanced countries like the United States of America and
United Kingdom and has also recently been adopted in some Asian and African countries.
India, which has adopted compulsory adjudication system, has also accepted in principle
the system of collective bargaining but has hardly taken any steps, legislative or otherwise,
to apply it in practice.

1 Tamil Nadu Electricity Workers Federation v. Madras Electricity Board, AIR 1965 Mad. 111.
148 • Industrial Relations and Labour Laws

The standards and principles emerging from the ILOs conventions, recommendations and
other instruments on the right to collective bargaining, and the principles set forth by the
Committee and the Freedom of Association may be summarized as follows :
a. The right to collective bargaining is a fundamental right endorsed by the members of
the ILO in joining the organization, under which they have an obligation to respect,
to promote and to realize, in good faith (ILO Declaration on Fundamental Principles
and Rights at Work and its Follow-up) the right to collective bargaining.
b. Collective bargaining is a right of employers and their organizations, on the one
hand, and organizations of workers, on the other hand (first-level trade unions,
federations and confederations); only in the absence of these latter organizations, may
representatives of the workers concerned conclude collective agreements.
c. The right to collective bargaining should be recognized throughout the private and
public sectors and it is only the armed forces, the police and public servants engaged
in the administration of the state who may be excluded from the exercise thereof
(Convention No. 98).

The expression' collective bargaining' was coined by Sydney and Beatrice.2 This was widely
accepted in the United States of America.
The meaning of the expression 'collective bargaining' has been the subject matter of
controversy and it is defined in a variety of ways. Harbison defines' collective bargaining' as:
a process of accommodation between two institutions which have both common and
conflicting interests. 3
In 1960, in the manual published by the International Labour Office, 'collective
bargaining' has been defined as:
negotiations about working conditions and terms of employment between an employer,
a group of employers or one or more employers' organization on the one hand, and
one or more representative workers organizations on the other, with a view to reaching
agreement. 4
Golden, however, treats collective bargaining:

as a measure to distribute equitably the benefits derived from industry among

all the participants including the employees, the unions, the management, the
customers, the suppliers and the public.5
The aforesaid definitions of collective bargaining indicate that there is no unanimity
among the authors regarding the meaning of collective bargaining. Be that as it may,

2 Sydney and Beatrice, Industrial Democracy, (1897).

3 F H Harbison, Goals and Strategy in Collective Bargaining, (Harper and Bros, 1951).
4 International Labour Office, Collective Bargaining (A Worker's Education Manual}, Geneva (1960), 3.
5 C S Golden, Causes of Industrial Peace under Collective Bargaining, USA, the National Planning
Association, 1949.
 Collective Bargaining • 149

collective bargaining is a process by which the terms of employment and conditions of

service are determined by agreement between management and the union. In effect, 'it is a
business deal (which) determines the price of labour services and the terms and conditions
of labour's employment.' 6
The Supreme Court in Karnal Leather Karmachari Sangathan v. Liberty Footwear Co. 7
defines collective bargaining as:

A technique by which disputes as to conditions of employment are resolved

amicably, by agreement, rather than by coercion. The dispute is settled
peacefully and voluntarily, although reluctantly, between labour and
management.
An analysis of 'collective bargaining' requires the description of: (i) parties to
collective bargaining; (ii) subject-matter of collective bargaining; and (iii) objects of collective
bargaining. Let us discuss them.

A. Parties to Collective Bargaining

Collective bargaining involves two parties, namely, management represented either alone
or through employers' association or federation of employers on the one hand and workers
represented either through a union or workers' federation, on the other hand. The latter,
where provisions exist under law are known as bargaining agents. These two parties are
directly involved in the process of collective bargaining. It has, however been debated
time and again that a representative of the public should also be included to represent the
interests of public at the bargaining table, but has not yet been used much. 8

B. Subject Matter of Collective Bargaining

The International Labour Organization has divided the subject matter of collective bargaining
into two categories:
(i) Those which set out standards of employment which are directly applicable to relations
between an individual employer and worker;
(ii) Those which regulate the relations between the parties to the agreement themselves
and have no bearing on individual relations between employers and workers.
The first category includes subjects like wages, working hours (including overtime),
holidays with pay and period of notice for termination of contract. The second category,
according to ILO, includes eight items viz., (i) provisions for enforcement of collective
bargaining; (ii) methods of settling individual dispute; (iii) collective disputes including
grievance procedure and reference to conciliation and arbitration; (iv) recognition of a union
as bargaining agent for the workers; (v) giving of preference in recruibnent to union members
seeking employment; (vi) duration of the agreement; (vii) undertaking not to resort to strike
or lockout during the period; and (viii) procedures for negotiation of new agreements. 9

6 James J Healy (Ed.}, Creative Collective Bargaining, Prentice Hall, 1965, 9.

7 1990 Lab IC 301 (SC}.
8 Bartram F Willlcox, 'A Sketch of the Federal Law of Labour in the United States' Aligarh Law Journal,
(1965) 39.
9 Id. at 46.
150 • Industrial Relations and Labour Laws

C. Objectives of Collective Bargaining

The International Confederation of Free Trade Union called collective bargaining
'A Workers's Bill of Rights'. It enumerated the following objects of the union in collective
bargaining:
1. to establish and build union recognition as an authority in the work place;
2. to raise workers' standard of living and win a better share in company's profits;
3. to express in practical terms the workers' desire to be treated with due respect and to
achieve democratic participation in decisions affecting their working conditions;
4. to establish orderly practices for sharing in these decisions and to settle disputes which
may arise in day-to-day life of the company;
5. to achieve broad general objectives such as defending and promoting the workers'
interests throughout the country. 10

The ILO also states that:

In collective bargaining, the object is to reach agreement on wages and other

conditions of employment about which the parties begin with divergent
viewpoints but try to reach a compromise. When a bargain is reached, the
terms of the agreement are put into effect. 11
Thus, it is evident that the prime object of collective bargaining is to resolve the
differences between the parties in respect of employment, non-employment, terms of
employment and conditions of service of the members of the union.

D. Duration of Collective Bargaining

The duration of collective bargaining agreements vary from agreement to agreement. There
is a general tendency on the part of the union to have the contract of short duration, but
management on the other hand prefers agreements of long duration:

In the United States, many of the contracts are for a period of one to three
or more years, with options to renew. In the United Kingdom, 'open end'
contracts which can be renegotiated on notice at any time, are the rule. In the
Scandinavian countries, one-year contracts with renewal clauses are usual. 12

A. Freedom of Association
In order to achieve collective bargaining, it is essential to ensure that the denial of such
freedom negates collective bargaining. In this respect, it is significant to note that the

10 Referred in Mary Sur, Collective Bargaining (1965), 4.

11 International Labour Office, Collective Bargaining (A Workers' Education Manual), Geneva (1960), 5.
12 Mary Sur, supra note 10, 34.
 Collective Bargaining • 151

International Labour Organization adopted the 'Convention No. 87 concerning freedom

of association and protection of the right to organize' which seeks to provide for freedom
of association. India has, however, not formally ratified this convention perhaps due to
administrative and constitutional problems. However, Article 19(1) (c) of the Constitution
of India guarantees 'the right to form associations or unions'. Earlier the Trade Unions Act,
1926 impliedly concedes the freedom of association by conferring certain rights, duties and
immunities upon members of registered trade unions. However, there is a need to ratify
the ILO Convention.

B. Strong and Stable Trade Unions

For the success of collective bargaining, it is also essential that there should be strong,
independent, democratic and well organized trade unions. Unorganized labour is the
hurdle in its success. In India, however, the unions are generally weak. Rivalry on the basis
of caste, creed, religion is another characteristic of Indian trade unions which comes in the
way of successful collective bargaining. Further, division on the basis of political ideologies
further retards the growth of trade unions. Moreover, most of the workers are illiterate.
Lastly, the financial position of trade unions is weak and some of them are even unable to
maintain a proper office.

C. Recognition of Trade Unions

Recognition of trade unions as bargaining agents is the backbone of collective bargaining.
We have already discussed the problems relating to recognition of trade unions in the
previous chapter.

D. Willingness to Give and Take

The mutual trust and appreciation of the viewpoints of the management and union is also
essential. Said the ILO:

The fact of entering into negotiations implies that the differences between
two parties can be adjusted by compromise and concession in the expectation
that agreement can be reached. Obviously, if one or both sides merelf make
demands when they meet, there can be no negotiation or agreement. 1

E. Absence of Unfair Labour Practices or Victimizations

Statutory provisions for unfair labour practice or victimization are another prerequisite
of collective bargaining. We will discuss in Chapter 12 unfair labour practices and
victimizations.

13 ILO Collective Bargaining, A Worker's Education Manual, Geneva, (1960) 128.

15 2 • Industrial Relations and Labour Laws

A. Advantages of Collective Bargaining

Collective bargaining has been preferred over compulsory adjudication system for several
reasons;
(i) it is a system based on bipartite agreements and as such is superior to any arrangement
involving third party intervention in matters which essentially concern employers and
workers;14
(ii) it is a quick and efficient method of settlement of industrial disputes and avoids delay
and unnecessary litigation;15
(iii) it is a democratic method of settlement of industrial disputes. 16

B. Disadvantages of Collective Bargaining

According to Willcox, it has two vital defects: One of these defects is that there are situations
in which a serious strike and a prolonged strike simply cannot be tolerated. 17 The second
great flaw in collective bargaining as a solver of labour disputes is the lack of representation
of the public interest at the bargaining table. Whether prices can be raised without affecting
the ability to sell goods or services, unions and companies are in a position to agree on wage
increase that will cause higher prices; then the consumer must shoulder the full burden of
their agreement. 18

Collective bargaining as a method of settlement of industrial disputes is comparatively

a recent development. However, it has been debated ever since the days of the Royal
Commission of Labour. The planners paid considerable attention to the adoption of the
system of collective bargaining to solve labour disputes in India.

A. Plans and Collective Bargaining

The First Five-Year Plan recognized the workers' right of association, organization and
collective bargaining as a fundamental basis of peaceful industrial relations. It added that,
'collective bargaining can derive reality only from the organized strength of workers and
a genuine desire on the part of the employer to cooperate with their representatives.' It
pointed out that the endeavour of the state had been to encourage collective bargaining and
mutual settlement of industrial disputes in order to minimize governmental intervention
in labour management relations.
The Second Five-Year Plan, 1956 recognized the need for mutual settlement for
resolution of industrial disputes:

14 Government of India, Report of the National Commission on Labour (1969), 325.

15 Bartram F Willcox and other (Ed.) Labour Law and Labour Relations: Cases and Materials (1967), 29.
16 Ibid.,
17 Bartram F Willcox : op. cit.
18 Ibid., Id at 37.
 Collective Bargaining • 153

For the development of an undertaking or an industry, industrial peace is

indispensable. Obviously, this can best be achieved by the parties themselves.
Labour legislation... can only provide a suitable frame-work in which employers
and workers can function. The best solution to the common problems, however,
can be found by mutual agreement. 19
Another step in building strong unions is to recognize them as representative unions
under certain conditions.
The Third Five-Year Plan encouraged voluntary arbitration and pleaded for its adoption
in place of compulsory adjudication:

Ways will be found for increasing the application of the principle of voluntary
arbitration ... The same protection should be extended to proceedings in this
case as is now applicable to compulsory adjudication... Employers should
show much greater readiness to submit disputes to arbitration than they have
done hitherto. This has to be the normal practice in preference to a recourse to
adjudication as an important obligation adopted by the parties under the Code.
The Fourth Five-Year Plan stressed that' greater emphasis should be placed on collective
bargaining and on strengthening the trade union movement for securing better labour-
management relations, supported by recourse in large measures to voluntary arbitration.'20

B. Response of the [First] National Commission on Labour

The National Commission on Labour which was appointed by the Government of India
in 1966 made comprehensive investigation of almost all the problems relating to labour. It
also made a series of recommendations to promote collective bargaining. Important among
them are:

We have to evolve satisfactory arrangements for union recognition by statute

as also to create conditions in which such arrangements have a chance to
succeed. Apart from this, we have to indicate the place which strike/lockout
will have in the scheme we propose. Collective bargaining cannot exist without
the right to strike/lockout.21

Earlier it observed:

Collective bargaining as it has developed in the West may not be quite suitable
for India, it cannot appropriately co-exist with the concept of a planned economy
where certain specified production targets have to be fulfilled. Though we are
not convinced that collective bargaining is antithetical to consumer interests
even in a sheltered market, we envisage that in a democratic system, pressure
on government to intervene or not to intervene in a dispute may be powerful.
It may hardly be able to resist such pressures and the best way to meet them
will be to evolve a regulatory procedure in which the State can be seen in the
public eye to absolve itself of possible charges of political intervention. The

19 Government oflndia, Second Five-Year Plan (1956), 574.

20 Government of India, Fourth Five-Year Plan: A Draft Outline (1966), 387.
21 Government of India, Report of the National Commission on Labour (1969), 327.
154 • Industrial Relations and Labour Laws

requirements of national policy make it imperative that state regulation will

have to co-exist with collective bargaining. At the same time, there are dangers
in maintaining status quo. There is a case for shift in emphasis and this shift
will have to be in the direction of an increasing greater scope for, and reliance
on, collective bargaining. But, any sudden change replacing adjudication by a
system of collective bargaining would neither be called for nor practicable. The
process has to be gradual. A beginning has to be made in the move towards
collective bargaining by declaring that it will acquire primacy in the procedure
for settling industrial disputes.

C. Factors Affecting Successful Collective Bargaining in India

Labour laws have effected the formation of trade unions in two ways. First, it has weakened
the protest movement. Second, it has failed to give adequate protection to the members of
a union for their trade union activities.
History of trade union movement in different countries of the world shows that
economic dependence on industrial employment, oppressive conditions of work in industrial
undertakings, economic exploitation of workers and impersonal handling of their personal
problems have generally built up the protest movement and the urge to form unions to
combat the management's superior powers. However, in India, minimum standard statutes
like Factories Act, 1948, Mines Act, 1952, Minimum Wages Act, 1948, Payment of Wages
Act, 1936, Payment of Bonus Act, 1965 and Social Security Statutes like Employees' State
Insurance Act, 1948, Workmen's Compensations Act, 1923, Employees' Provident Fund and
Miscellaneous Provisions Act, 1952, and Payment of Gratuity Act, 1972, which are not only
far in advance of the level dictated by the strength of workers but also of those dictated by
the significant protest movement. Moreover, institutions such as a works committees and
adjudication system, have in general, tended to minimize the value of trade unions. Further,
the institution of standing orders, the procedure for their certification and the provisions
regarding the adjudication, disputes relating to their interpretation and application mitigate
against the necessity of forming trade unions.
Members of trade unions need as much protection from the common law doctrines
of criminal conspiracy and restraint of trade as from employers' wrath. However, it has to
be noted that the Trade Unions (Amendment) Act, 1947, which prohibited certain forms of
unfair practices on the part of management, have not yet been enforced.
Even the protections granted against common law doctrine of criminal conspiracy,
civil conspiracy and restraint of trade under Sections 17, 18 and 19 of the Trade Unions Act
are hardly sufficient. If the expression 'unless the agreement is an agreement to commit
an offence' renders Section 17 almost meaningless. The expression 'on the ground only'
severely curtails the benevolent aspect of Section 18.
Further, law relating to labour managementrelations and adjudication system prevalent
in our country reveals that the labour law had not been to a great extent responsive to the
bargaining power of Indian workers. Thus, the Industrial Disputes Act, 1947, restricts the
striking power of Indian workers. It regulates the use of instruments of economic coercion.
Of course, Article 19 (1) (c) of the Constitution guarantees 'the right to form associations
or unions' but after the Supreme Court decision in All India Bank Employees case22 that the

22 (1962) SCR 17 1.
 Collective Bargaining • 155

Article merely guarantees the 'right to form associations or unions' and, in particular does
not guarantee the right to strike, the usefulness of the Article is extremely limited.
Moreover, Section 7 of the Criminal Law (Amendment) Act, 1932, renders it impossible
for the workers to indulge in several kinds of labour activities. It, adversely affects the
workmen's right to picket. It prohibits obstruction of access and intimidation of persons or
employees or loitering at places of residence or business with the intent of deterring others
from entering or approaching or dealing at such place. The Bombay High Court in Damodar
Ganesh v. State2 3 has, however, held that Section 7 prohibits even peaceful picketing. It has,
therefore, severely affected the bargaining power of trade unions.
Moreover, the surplus labour market (which exists in India) affects the bargaining
power of Indian labour. It will be observed that 'the backlog of unemployed which stood
at 3 million at the commencement of the First Five Year Plan, was estimated to be above
10 million in 1968. This is in spite of 31 million jobs created during the first three plans which
is almost equivalent to the size of the entire economically active ~opulation of a number of
countries like West Germany, United Kingdom, and Pakistan.' 4 In addition, about 18 to
19 million job opportunities were created during the Fourth Five-Year Plan. 25 They further
estimated that even if the entire plan projects were successfully implemented, over 4 million
would represent the backlog at the end of the Fourth Five-Year Plan.26
Further, the absence of any statutory provisions at central level for the recognition
of a representative trade union by an employer also affects the bargaining power of trade
unions. Again, the right of unions has jeopardized the striking power of unions. Moreover,
the government's unfettered discretion in referring a dispute for adjudication and for issuing
of prohibitory order under Section 10 of Industrial Disputes Act has adversely affected the
labour's interests.
Labour laws have also not given any special status to a trade union. Section 36 of
the Industrial Disputes Act, 1947, enables a worker, if he so desires, to be represented by
a union, but it does not enable a union to represent its members. Indeed, apart from the
general law of agency, a union cannot bind by its decision, its own member, far less the
non-union member in the establishment.

23 Damodar Ganesh v. State, (1961} 2 LLJ 385.

24 The statement was made by Shri Jaisukh Lal Hathi, Union Minister of Labour and Employment and
Rehabilitation in a broadcast on 'employment' dated 17 January, 1968. See Northern India Patrikla,
dated 19 January, 1968.
25 Government of India, Fourth Five-Year Plan: A Draft Outline, 108.
26 Ibid.
Unfair Labour
Practices and
Victimizations 12
The expression 'unfair labour practices' has not been exhaustively defined in any of the
enforced legislative enactments in India. However, Section 28 (k) of the Trade Unions
(Amendment) Act, 1947 enumerated the following to be an unfair labour practice on the
part of the employer:
(a) to interfere with, restrain, or coerce his workmen in the exercise of their rights to
organize, form, join or assist a trade union and to engage in concerted activities for
the purpose of mutual aid or protection;
(b) to interfere with the formation or administration of any trade union or to contribute
financial or other support to it;
(c) to discharge, or otherwise discriminate against any officer of a recognized trade union
because of his being such officer;
(d) to discharge, or otherwise discriminate against any workman because he has made
allegations or given evidence in any inquiry or proceeding relating to any matter such
as is referred to in sub-section (i) of Section 28 F;
(e) to fail to comply with the provisions of Section 28 F.

Section 28 J of the Trade Unions (Amendment) Act, 1947, (which is unenforced) dealt with
unfair labour practices by trade unions:
(a) for a majority of the members of the trade union to take part in an irregular strike;
(b) for the executive of the trade union to advise or actively support or instigate an irregular
strike;
(c) for an officer of the trade union not to submit any return required by or under this
Act containing false statements.
15 8 • Industrial Relations and Labour Laws

In the absence of any enforced statutory definition, the courts have tried to fill this gap. The
judicial interpretation of the expression 'unfair labour practice' has given rise to two main
views, viz., the narrow and the extensive.

A. Narrow View
Some of the early adjudicators confined the expression 'unfair labour practice' to trade union
activity. In other words, 'no trade union activity, no unfair labour practice.' This view was
evidently supported by the provisions of Section 28 K of the Trade Unions (Amendment)
Act, 1947. However, later decision makers refused to accept the narrow interpretation on at
least two grounds. First, if unfair labour practice is confined merely to trade union activities,
then the worker who is not the member of any union and as such, having no trade union
activities will not be entitled to any relief under the Industrial Disputes Act, 1947 when he is
discharged. The result will be that either the employer would try to engage non-union men
or that non-union men will be forced indirectly to join a union. This will be in the words
of the tribunal, an interference with the natural rights of workmen. Second, the narrow
interpretation limits the scope of tribunal's jurisdiction to intervene only in cases where the
management has dismissed or discharged workmen for trade union activities.

B. Extensive View
A few of the earlier decisions and later decisions generally emphasize extensive view. For
instance, Shri AG Gupta in Alexandra Jute Mills Ltd v. Their Workmen 1 illustrated unfair
labour practice:

any order made in bad faith with an ulterior motive arbitrarily or with
harshness is an instance of unfair labour practice.
There are other illustrations, e.g., hasty action of company without giving the employee
any notice or holding an inquiry provided that the refusal by an employer to permit his
workmen to engage in trade union activities during their hours of work shall not be deemed
to be unfair practice on his part. And Section 32A of the Trade Unions (Amendment) Act,
1947 prescribed the penalty for committing unfair labour practices. Thus it provides that '(1)
any employer who commits any unfair practice set out in Section 28 K shall be punishable
with fine which may extend to fl,000. (2) Where a criminal court imposes a fine, or confirms
in appeal, revision or otherwise a sentence of fine imposed on an employer for committing
an unfair labour practice set out in clause (c) or clause (d) of Section 28 K, it may when
passing judgement, order the whole or any part of the fine to be applied in the payment to
any person as compensation for lessor injury caused by the unfair practice.'

The Code of Discipline, 1958 contains a list of unfair labour practices to be avoided by
unions and management:
(1) Management agrees... not to support or encourage any unfair labour practice such as:

1 Alexandra Jute Mills Ltd v. Their Workmen, (1950) I LLJ 1261.

 Un(air Labour Practices and Victimizations • I 5 9

(a) interference with the rights of employees to enrol or continue as union members;
(b) discrimination, restraint or coercion against any employee because of recognized
activity of trade unions; and
(c) victimization of any employee and abuse of authority in any form.
(2) Unions agree to discourage unfair labour practices such as:
(a) negligence of duty;
(b) careless operation;
(c) damages to property;
(d) interference with or disturbance to normal work; and
(e) insubordination.

The [First] National Commission on Labour has also recommended that the law should
enumerate various unfair labour practices on the part of employers and on the part of
workers' unions; and provide for suitable penalties for committing such practices. Complaints
relating to unfair labour practices will be dealt with by the labour courts. They shall have
the power to impose suitable punishments/penalties which may extend to de-recognition
in case of unions and heavy fine in case of an employer found guilty of such practices. 2

VI. UNFAIR LABOUR PRACTICES ON THE PART OF EMPLOYERS

AND TRADE UNIONS OF EMPLOYERS UNDER THE
INDUSTRIAL DISPUTES (AMENDMENT) ACT, 1982
Section 2 (ra) read with the Fifth Schedule of Industrial Disputes (Amendment) Act, 1982
defines and enumerates unfair labour practices on the part of employers to mean:
1. To interfere with, restrain from, or coerce, workmen in the exercise of their right to
organize, form, join or assist a trade union or to engage in concerted activities for the
purposes of collective bargaining or mutual aid or protection, that is to say:
(a) threatening workmen with discharge or dismissal, if they join a trade union;
(b) threatening a lockout or closure, if a union is organized;
(c) granting wage increase to workmen at crucial periods of trade union organization,
with a view to undermining the efforts of the trade union organization.
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 organizing a trade union of his workmen;
and
(b) an employer showing partiality or granting favour to one of several trade unions
attempting to organize his workmen or to its members, where such a trade union
is not a recognized trade union.
3. To establish employer-sponsored trade unions of workmen.

2 Government of India, Report of the National Commission on Labour (1969} 336.

160 • Industrial Relations and Labour Laws

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
organize 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 victimization;
(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
inquiry 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 for breaking a strike.
7. To transfer a workman mala fide from the 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 inquiry or proceeding relating to any industrial dispute.
12. To recruit workmen during a strike which is not an illegal strike.
13. Failure to implement award, settlement or agreement.
14. To indulge in acts of force or violence.
15. To refuse to bargain collectively, in good faith with the recognized trade unions.
16. Proposing or continuing a lockout deemed to be illegal under this Act.
 Unfair Labour Practices and Victimizations • 16 1

And Section 25 T of the Act prohibits employers (whether registered under the Trade
Unions Act, 1926 or not) to commit any of the aforesaid unfair labour practices. Violation
of the provision is punishable with imprisonment for a term which may extend to 6 months
or with fine which may extend to ~1,000 or with both.
A perusal of item 7 of the Fifth Schedule read with Section 25 T of the Act reveals
that there is a statutory prohibition engrafted in the Industrial Disputes Act prohibiting
transfer of a workman mala fide from one place to another under the guise of management
policy. Thus, a valued right has been created by the statute in favour of the workman from
being subjected to by his employer to transfers mala fide under the guise of following the
management policy. This is a right which has been created by the Industrial Disputes Act
in favour of the workmen restricting the unfettered right of the management in the matter
of effecting transfers of his employees. The obligation not to transfer a workman mala fide
from one place to another under the guise of management policy was not recognized under
common law. That right it now created by the statute. 3 The remedy has been provided in
Section 10 of the Act. There are several conditions which are to be satisfied for invoking the
remedy provided under Section 10 of the Act. When the statute prescribes a remedy and
also prescribes the conditions for availing of that remedy, if the conditions for invoking
the remedy cannot be complied with, it does not mean that the statute has not provided
the remedy.4 Thus, the right as well as the remedy have been provided by the Industrial
Disputes Act in the matter of transfer by the management. In such a case, the jurisdiction
of the civil court is by necessary implication barred.5
From the above, it is clear that (i) management is not expected to interfere with the
rights of the workmen to organize themselves into a trade union. (ii) The management is
also not supposed to dominate, interfere with or support, financial or otherwise, to any
trade union. (iii) The management is not expected to establish employer-sponsored trade
unions of workmen, and it is also not supposed to encourage or discourage membership
to any union by taking the various steps which are mentioned above, clearly speaks of a
recognized trade union. (iv) To refuse to bargain collectively even in good faith with a
recognized trade union is an unfair labour practice.6
Discouragement of Badli workmen to join a trade union-an unfair labour practice.
In Panyam Cement Employees Union affiliated to INTUC, Kurnool District v. Commissioner of
Labour, Hyderabad7, the High Court of Andhra Pradesh held that a reading of clause 4 of
Part 1 of the Fifth Schedule reveals that any action on the part of the employer /workmen to
discourage a workman from participating in a trade union activity is unfair labour practice.
Badli workmen are workmen and, therefore, if any employer disapproves of a 'trade union
of badli workers' or discourages badli workers to join a trade union or denies voting right
to badli workers, the same would amount to unfair labour practice.
Temporary appointment for successive fixed tenure with artificial breaks-an unfair
labour practice. The Supreme Court in Regional Manager, SBI v. Raja Ram 8 ruled that when

3 Kerala Rubber and Reclaims Ltd v. PA Sunny, (1989} Lab. IC 964 at 967 (Kerala).
4 Id. at 968.
5 Id. at 969.
6 MRF United Workers Union Rep. by its General Secretary v. Government of Tamil Nadu, 2010 LLR 165
(HC Madras).
7 (2004} I LLJ 915.
8 (2005) I LLJ 12 at 14-15.
16 2 • Industrial Relations and Labour Laws

an employee is appointed temporarily for successive fixed tenures with artificial breaks in
between so as to deny the employee the right to claim permanent appointment, such action
would be an unfair labour practice within the meaning of the phrase in Section 2(ra) of the
Act. Section 2(ra) says that unfair labour practice means any of the practices specified in the
Fifth Schedule the Act. The Fifth Schedule to the Act contains a list of unfair labour practices
which have been classified under two heads, namely:
(I) on the part of the employer and trade unions of employers; and
(11) on the part of the workmen and trade unions of workmen. The principle that we have
referred to earlier finds place in Item 10 of Part I under which:
'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,' is an unfair labour practice.
In other words, before an action can be termed as an unfair labour practice, it
would be necessary for the labour court to come to the conclusion that the badlis, casuals
and temporary workmen had been continued for years as badlis, casuals or temporary
workmen, with the object of depriving them of the status and privileges of permanent
workmen. To this has been added the judicial gloss that artificial breaks in the service
of such workmen would not allow the employer to avoid a charge of unfair labour
practice. However, it is the continuity of service of workmen over a period of years which
is frowned upon. Besides, it needs to be emphasized that for the practice to amount to
unfair labour practice, it must be found that the workmen had been retained on a casual
or temporary basis with the object of depriving the workmen of the status and privileges
of a permanent workman.
The aforesaid view was reiterated in Krishna Lal v. General Manager, Haryana Roadways,
Rohtak9• The Punjab and Haryana High Court held that where the services of a workman
are terminated before the expiry of 240 days in order to give artificial break for a few days
and after some time, he is again re-employed, it amounts to unfair labour practice under
Section 2(ra) of the Industrial Disputes Act, 1947.
Contravention of Model Standing Orders- an unfair labour practice. In RP Sawant
v. Bajaj Auto Ltd.10, the Bombay High Court held that the contravention of the Model Standing
Order is an unfair labour practice within meaning of item 9 of Schedule IV in respect of
which industrial court was competent to grant relief to the complainants.

VII. UNFAIR LABOUR PRACTICES ON THE PART OF WORKMEN

AND TRADE UNIONS OF WORKMEN UNDER THE
INDUSTRIAL DISPUTES (AMENDMENT) ACT, 1982
Section 2 (va) read with the Fifth Schedule of the Amendment Act also enumerates the
following unfair labour practices on the part of workmen and their trade unions:
1. To advice or actively support or instigate any strike deemed to be illegal under this Act.
2. To advice workmen in the exercise of their right to self-organization or to join a trade
union or refrain from joining any trade union, that is to say:

9 2011 LLR 359.

10 2001 LLR 935.
 Unfair Labour Practices and Victimizations • 16 3

(a) for a trade union or its members to picket in such a manner that non-striking
workmen are physically debarred from entering the work places;
(b) to indulge in acts of force or violence or to hold out threats of intimidation in
connection with a strike against non-striking workmen or against managerial
staff.
3. For a recognized union to refuse to bargain collectively in good faith with the employer.
4. To indulge in coercive activities against certification of 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 management 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.
The commission of aforesaid unfair labour practices are prohibited under Section 25 T
and whosoever commits any such unfair labour practice is punishable under Section 25 U
of the Industrial Disputes (Amendment) Act, 1982 with imprisonment which may extend to
6 months or with fine which may extend to fl,000 or with both.

Proof of Unfair Labour Practice

The charge of unfair labour practice should be specifically levelled so that the employer is
able to meet it. It should also be proven by clear evidence. It is undoubtedly correct that
sometimes, the facts may speak for themselves and it may be possible to infer that the
employer was acting unfairly but there should be some evidence which should indicate an
improper motive so as to enable the court to arrive at a finding of unfair labour practice.11

Victimization and unfair labour practice are 'like twins who cling together'. According
to some, unfair labour practice can stand by itself, but victimization must always keep
company with unfair labour practice. For instance, where the employer interferes with
employees' right to self organization or with the formation of any labour organization, or
where the employer bangs the door on any settlement by negotiation, there may be unfair
labour practice. In such cases, no punishment need be inflicted on any employee. It cannot
be said that there is any victimization. Thus, separate existence of unfair labour practice
is conceivable. 'In other words, the dividing line between victimization and unfair labour
practice is very thin and what is unfair labour practice may also be a victimization and
vice versa.' 12
Like unfair labour practice, the word 'victimization' has not been defined either in the
Trade Unions Act, 1926 or in the Industrial Disputes Act, 1947. The Supreme Court in Bharat

11 Gurdaspur Central Co-operative Bank Ltd v. Labour Court, (1999) Lab. IC 192.
12 Everyday Flash Light Co. v. Labour Court, (1962) 2 LLJ 204 (Allahabad).
164 • Industrial Relations and Labour Laws

Bank Ltd v. Employees of Bharat Bank Ltd13, has, however, defined the word 'victimization'
to mean:

a certain person has become a victim, in other words, that he has been unjustly
dealt with.
The aforesaid meaning was followed in Bharat Iron Works v. Bhagubhai Balubhai Patel 14,
wherein the Supreme Court observed that a person is victimized, if he is subjected to
persecution, prosecution or punishment for no real fault or guilt of his own, in the manner,
as it were a sacrificial victim. The Supreme Court said that victimization may partake various
types. For example, pressurizing an employee to leave the union or union activities, treating
an employee unequally or in an obviously discriminatory manner for the sole reason of
his connection with union or his particular union activity; inflicting a grossly monstrous
punishment which no rational person would impose upon an employee and the like.
The Supreme Court in Workmen ofMis Williamson Magor and Co. Ltd v. Mis Williamson
Magor and Co. Ltd, 15 accepted the normal meaning of 'victimization', namely, being the victim
of unfair and arbitrary action, and held that there was 'victimization of the superseded
workmen. The tendency of the Court to safeguard the interest of workmen, is also evident
from the observation of the Court, that whenever, the word 'victimization' can be interpreted
in two different ways, the interpretation which is in favour of the labour should be accepted
as they are the poorer section of the people compared to that of management. 16
Justice Dhawan in L H Sugar Factories & Oil Mills (P) Ltd, 17 expressed the view that
what are unfair labour practices or victimizations is a question of fact to be decided by the
tribunal upon the circwnstance of each case. However, from the mere fact that the concerned
workmen were office-bearers of the union, it cannot be inferred that the company was
actuated by any improper motive to victimize them when the charge of misconduct was
proved against them. 18
Ludig Teller has enumerated and given seven instances where the employees may
be held guilty of unfair labour practice. These are, for instance, sit down strikes, to compel
members to join the union, strikes in violation of collective bargaining agreement, strike
during 'cooling-off', obstruction of lawful works, the commission of misdemeanours in
connection with labour disputes, unlawful picketing, etc.
In RBS Jain Rubber Mills 19, the tribunal listed the following as outward manifestation
to be taken into account for victimization or unfair labour practice:
1. Discrimination between workers
2. Singling out union leaders or members
3. Anti-union statement made at the time of discharge or shortly prior thereto
4. Relative significance of the alleged infraction

13 Bharat Bank Ltd v. Employees of Bharat Bank Ltd (1950) LLJ 921.
14 Bharat Iron Works v. Bhagubhai Balubhai Patel AIR 1976 SC 98.
15 Workmen ofMis Williamson Magor and Co. Ltd, v. M/s Williamson, Magor and Co., Ltd, (1982} 1 LLJ 33
(SC).
16 Id. at 38.
17 LH Sugar Factories & Oil Mills (P) Ltd v. State of UP, (1961} 1 LLJ 686.
18 Brown Co. Ltd v. Their Workmen, (1959) 1 LLJ 450.
19 RBS Jain Rubber Mills' (1968} 1 LLJ vii (Journal Section).
 Unfair Labour Practices and Victimizations • 165

5. Whether others ever committed the same infraction without similarly being punished
to the extent of discharge
6. Failure without explanation to introduce specific evidence in support of a general
accusation or reason for discharge or to call witnesses who have personal knowledge
of the basis of denial
7. Failure of the employer to hold an investigation
8. Failure to afford an employee the opportunity to defend himself
9. Uneven application of the company's rule

A. Proof of Victimization
Victimization 'is a serious charge by an employee against an employer, and, therefore, it must
be properly and adequately pleaded, giving all particulars upon which the charge is based,
to enable the employer to fully meet them. The charge must not be vague or indefinite, being
as it is an amalgamation of facts as inferences and attitudes. The fact that there is a union
espousing the cause of the employees in legitimate trade union activity and an employee
is a member or active office-bearer thereof, is per se no crucial instance.'20

B. Burden of Proof
The onus of establishing a plea of victimization will be upon the person pleading it. Since a
charge of victimization is a serious matter reflecting to a degree, upon the subjective attitude
of the employer evidenced by acts and conduct, these have to be established by safe and
sure evidence. Mere allegations, vague suggestions and insinuations are not enough. All
particulars of the charge brought out, if believed, must be weighed br the tribunal and a
conclusion should be reached on a totality of the evidence produced.2
Again, victimization must be directly connected with the activities of the concerned
employee inevitably leading to the penal action without the necessary proof of a valid
charge against him ... A proved misconduct is antithesis of victimization as understood in
industrial relations. 22

It was established in Indian Iron and Steel Co. v. Their Workmen 23 that industrial tribunal can
interfere, inter alia, in management's order when there is victimization or unfair labour
practice.
Again, in Ananda Bazar Patrika v. Their Employees24, the Supreme Court dealt with the
extent of jurisdiction of a labour court or an industrial tribunal and observed as follows: If
on the one hand, in terminating the services of the employee, the management has acted
maliciously or vindictively or has been actuated by a desire to punish the employee for

20 Bharat Iron Works v. Bhagubhai, AIR 1976 SC 98.

21 Id. at 102.
22 Ibid.
23 Indian Iron and Steel Co. v. Their Workmen, AIR 1958 SC 130.
24 Ananda Bazar Patrika v. Their Employees, 1963 2 LLJ 429.
166 • Industrial Relations and Labour Laws

his trade union activities, the tribunal would be entitled to give adequate protection to
the employees by ordering his reinstatement, or directing in his favour the payment of
compensation. But if the inquiry has been proper and the conduct of the management
in dismissing the employee is not mala fade, then the tribunal cannot interfere with the
conclusions of the inquiry officer, or with the orders passed by the management after
accepting the said conclusions.
In Bengal Bhatdee Coal Co. v. Singh 25, the Supreme Court ruled:

[T]here is no doubt that though in a case of proved misconduct, normally the

imposition of a penalty may be within the discretion of management, there may
be cases where the punishment of dismissal for the misconduct proved may
be so unconscionable or so grossly out of proportion to the nature of offence
that the tribunal may be able to draw an inference of victimization merely
from the punishment inflicted.
The Supreme Court in Hind Construction and Engineering Co. Ltd v. Their Workmen 26
has put the position of law as follows:

It is now settled law that the tribunal is not to examine the finding or the
quantum of punishment because the whole of the dispute is not really open
before the tribunal as it is ordinarily before a court of appeal. The tribunal's
powers have been stated by this court in a large number of cases and it has
been ruled that the tribunal can only interfere if the conduct of the employer
shows lack of bona fides or victimization of employee or employees or unfair
labour practices. The tribunal may, in a strong case, interfere with a basic
error on a point of fact or a perverse finding, but it cannot substitute its own
appraisal of the evidence for that of the officer conducting the domestic inquiry
though it may interfere where the principles of natural justice or fair play have
not been followed or where the inquiry is so perverted in its procedure as to
amount to no inquiry at all. In respect of punishment it has been ruled that
the award of punishment for misconduct under the Standing Orders, if any,
is a matter for the management to decide and if there is any justification for
the punishment imposed, the tribunal should not interfere. The tribunal is not
required to consider the propriety or adequacy of the punishment or whether
it is excessive or too severe. But where the punishment and the past record
are such, as no reasonable employer would ever impose in like circumstances,
the tribunal may treat the imposition of such punishment as itself showing
victimization or unfair labour practice.

25 Bengal Bhatdee Coal Co. v. Singh, (1962--63) 24 FJR 406.

26 Hind Construction and Engineering Co. Ltd v. Their Workmen, AIR 1965 SC 917: (1965) 1 LLJ 462.
 PART Ill

INDUSTRIAL DISPUTES ACT, 1947

Industrial Disputes
Act: A Contextual
Framework 13
One of the most striking trends is the progressively increasing government intervention
in labour management relations. The Employers' and Workmen's Disputes Act, 1860,
provided for speedy and summary disposal by magistrates of disputes concerning wages
of workmen employed in railways, canals and other public works. Like some of the earlier
regulations of the East India Company, it was concerned with specific industries and with
only those disputes that gave rise to a cause of action in civil courts. The government had
no active role to play. Provisions making breach of contract a criminal offence undoubtedly
affected the workers' right to strike but the statute did not directly seek to regulate the
use of instruments of economic coercion. The Trade Disputes Act, 1929, provided for the
constitution of two ad hoe bodies, viz., the Court of Inquiry and the Board of Conciliation to
inquire into and promote the resolution of 'trade disputes'. The expression 'trade dispute'
meant 'any dispute or difference between employers and workmen or between workmen
and workmen, which is connected with the employment or with the conditions of labour
of any person' and was neither confined to disputes in any particular trade or industry, nor
to justifiable causes. Further, the statute regulated strikes and lockouts by declaring them
illegal if their object was 'other than the furtherance of a trade dispute within the trade or
industry in which the participants were engaged; or if they were designed or calculated to
inflict severe, general or prolonged hardship upon the community and thereby to compel
the government to take or abstain from taking any particular course of action' or if they
were undertaken in the public utility services without giving prescribed notices. Under the
Act, the government could, therefore, intervene in labour management relations for the first
time and use persuasive processes for the settlement of 'trade disputes.' The restrictions on
the right to strike and lockout, particularly, the uncertainty inherent in the phrase 'severe,
general or prolonged hardship upon the community,' were, of course, detrimental to the
free use of instruments of economic coercion. Rule 81 A of the Defence of India Rules, 1942,
empowered the government to (1) require employers to observe such terms and conditions of
employment in their establishments as may be specified (2) refer any dispute for conciliation
or adjudication (3) enforce the decisions of the adjudicators and (4) make general or special
order to prohibit strikes or lockouts in connection with any trade dispute unless reasonable
notice had been given. These provisions, thus, permitted the government to use coercive
processes for the settlement of 'trade disputes' and to place further restrictions on the right
170 • Industrial Relations and Labour Laws

to use instruments of economic coercion. The Industrial Disputes Act, 1947, put the wartime
emergency provisions in a permanent peacetime legislation.

The object of the Industrial Disputes Act, 1947 was contained in the statement of Objects
and Reasons:

Experience of the working of Trade Disputes Act, 1929, has revealed that its main
defect is that while restraints have been imposed on the rights of strikes and
lockouts in public utility services, no provisions have been made to render the
settlement of an industrial dispute, either by reference to a board of conciliation
or to a court conclusive and binding on the parties to the dispute. This defect
was overcome during the war by empowering under Rule 81A of the Defence of
India Rules, the Central Government to refer industrial disputes to adjudicators
and to enforce their awards. Rule 81A which was to lapse on the 1st of October,
1946 is being kept in force by the Emergency Powers (Continuance) Ordinance,
1946, for a further period of six months and as industrial unrest, in checking
which this Rule has proved useful, is gaining momentum due to stress of post-
war industrial readjusbnent, the need of permanent legislation in replacement
of this rule is self-evident. This bill embodies the essential principles of Rule
81A, which have proved generally acceptable to both employers and workmen
retaining in tact for the most part, the provisions of the Trade Disputes Act, 1929.
However, adjudication proceedings under the Industrial Disputes Act, 1947, (hereinafter
referred to IDA) are not confined to 'public utility services' or to such employment as 'is
essential for securing the defence of British India, the public safety, the maintenance of public
order, the efficient prosecution of war, or for maintaining supplies or services necessary to
the life of the community' but may be invoked in any 'industrial dispute.' Further, though
the obnoxious provisions of Section 16 of the Trade Disputes Act, 1929, has been omitted,
Section 23 of the IDA prohibits strikes and lockout '(a) during the pendency of conciliation
proceedings before a board and 7 days after the conclusion of such proceedings (b) during the
pendency of any adjudication proceedings and (c) during any period in which a settlement or
award is in operation, in respect of any matter covered by the settlement or award.' Where a
strike or lockout has commenced before reference of the dispute to a board of conciliation or
adjudicating body, the government may prohibit the continuance of such strike or lockout.
The amendments further widened the scope of governmental intervention.
The Supreme Court in Dimakuchi Tea Estate Karmchari Sangh v. Dimakuchi Tea Estate, 1
summed up the principal objects of the Act as follows:
(i) promotion of measures for securing and preserving amity and good relations between
the employers and workmen;
(iz) investigation and settlement of industrial disputes, between employers and employers,
employers and workmen or workmen and workmen, with a right of representation by
registered trade union or a federation of trade unions or an association of employers
or a federation of association of employers;

1 AIR 1958 SC 358.

 Industrial Disputes Act: A Contextual Framework • 171

(iii) prevention of illegal strikes and lockouts;

(iv) relief to workmen in the matter of layoff and retrenchment; and
(v) collective bargaining.
In Life Insurance Corporation of India v. DJ Bahadur2,Justice V R Krishna Iyer speaking
for the Supreme Court has observed that 'the Industrial Disputes Act is a benign measure
which seeks to pre-empt industrial tensions, provide the mechanics of dispute resolution
and set up the necessary infrastructure so that the energies of partners in production may
not be dissipated in counter-productive battles and assurance of industrial justice may
create a climate of goodwill.'
The Supreme Court in Rajasthan State Road Transport Corporation 3 observed that the
object of the Industrial Disputes Act, as its preamble indicates, is to make provision for
the investigation and settlement of industrial disputes which means adjudication of such
disputes also. The Act envisages collective bargaining, contracts between union representing
the workmen and the management, a matter which is outside the realm of the common law
or the Indian law of contact. The Act also provided for the constitution of various committees
and conferred extensive powers on different kinds of authorities in the matter of settlement
of adjudication of industrial disputes. It also provide remedies under Sections 10, 12, 18, 19
and 31(2), 33(1)(a), 33C(l) and 33C(2).

The long title shows that the object of the Act is 'to make provision for investigation and
settlement of industrial disputes and for certain other purposes.' The preamble states
the same object and Section 2 of the Act which contains the definitions states that unless
there is anything repugnant in the subject or context, certain expressions will have certain
meanings. Chapter II refers to the authorities set up under the Act, such as, works committees,
conciliation officers, boards of conciliation, courts of enquiry and industrial tribunals. The
primary duty of a works committee is to promote measures for securing and preserving
amity and good relations between employers and workmen and to that end, to comment
upon their common interest or concern and endeavour to compose any material difference
of opinion in respect of such matters. Conciliation officers are charged with the duties of
mediating in, and promoting the settlement of industrial disputes. A board of conciliation
may also be constituted for the same purpose, namely, for promoting the settlement of an
industrial dispute. A court of enquiry may be appointed for inquiring into any matter which
appears to be connected with or relevant to an industrial dispute. Section 7 empowers the
appropriate government to constitute one or more tribunals for the adjudication of industrial
disputes in accordance with the provisions of the Act. Chapter III contains provisions
relating to the reference of industrial disputes to the board of conciliation, court of inquiry
or labour court, tribunal or national tribunal. Under Section 10 (1) (c), where an appropriate
government is of the opinion that any industrial dispute exists or is apprehended, it may,
at any time, by order in writing, refer the dispute or any matter appearing to be connected
with or relevant to the dispute to a tribunal for adjudication. Chapter IV of the Act deals with
procedure, powers and duties of the authorities set up under the Act. Where an industrial
dispute has been referred to a tribunal for adjudication, Section 15 requires that the tribunal

2 AIR 1980 SC 2181.

3 2005 LLR 1044.
172 • Industrial Relations and Labour Laws

shall hold its proceedings expeditiously and shall, as soon as practicable on the conclusion
thereof, submit its award to the appropriate government. Section 17 lays down, inter alia,
that the award of a tribunal shall, within a period of one month from the date of its receipt
by the appropriate government, be published in such manner as it thinks fit. Section 17A
lays down that the award of a tribunal shall become enforceable on the expiry of 30 days
from the date of its publication. Section 17 also contains certain other provisions which
empower the appropriate government to modify or reject the award. Section 18 relates to
awards. Section 19 lays down the period of operation of settlements and awards and states,
inter alia, that an award shall, subject to the provisions of the section, remain in operation
for a period of one year.
Chapter V of the Act deals with strikes and lockouts. Chapter VA and VB deal with
layoff, retrenchment, closure and transfer. Chapter VI prescribes penalties and Chapter
VII deals with miscellaneous matters. It is important to note that though in the definition
of 'lockout' under Section 2(1) and 'strike' under Section 2(q) and further in Section 22, the
expression' any person' has been used; in Section 22 (2) and Section 23 which also deal with
'lockout' and 'strike', the word 'workman' has been used.
Section 33 provides that during the pendency of any conciliation proceedings or any
proceedings before a tribunal, the conditions of service, etc., shall not be changed. Section
33A, however, uses the word 'employee' but read with Section 33, the word 'employee'
must mean a workman. Section 36 deals with representation of parties. Sub-section (3) of
Section 36 states that no party to a dispute shall be entitled to be represented by a legal
practitioner in any conciliation proceedings under the Act or in any proceedings before a
court. Sub-section (4) states that in any proceedings before a tribunal, a party to a dispute
may be represented by a legal practitioner with the consent of the parties to the proceeding
and with the leave of the tribunal.
The analysis of the aforesaid provisions shows that the Industrial Disputes Act enables
the State to compel the parties to resort to industrial arbitration and for that purpose, different
forums have been set up for the resolution of such disputes. The Act is intended to be a self-
contained one and it seeks to achieve social justice on the basis of collective bargaining. The
scheme of the Act shows that it attains a settlement of all industrial disputes arising between
labour and management by peaceful methods through the machinery of conciliation and
arbitration and if necessary, by approaching the tribunal constituted under the Act.

The Industrial Disputes Act, 1947 has undergone several amendments since 1947. Thus, the
Industrial Disputes (Amendment) Act, 1982 made the following amendments:
(i) Amended the definition of 'appropriate government'
(iz) Amended the definition of industry and thereby curtailed the scope of 'industry' as laid
down by the Supreme Court in Bangalore Water Supply & Sewerage Board v. A Rajappa
(iii) Inserted new clause (cc) defining 'closure'
(iv) Inserted new clauses, namely, Section 2 (ka) and 2(kka) (defining 'industrial
establishment or undertaking' and 'Khadi' respectively
(v) Inserted new Sections 2 (qq), 2 (ra) and 2 (rb) defining 'trade union', 'unfair labour
practice' and 'village industries'. Further, Fifth Schedule was added enumerating
unfair labour practice
 Industrial Disputes Act: A Contextual Framework • 173

(vz) Inserted Chapter VC dealing with prohibition of unfair labour practice and penalty
thereof
(vii) Inserted Chapter II B which provides for grievance settlement authorities and reference
of certain individual disputes to such authorities
(viii)Extended the special provisions relating to layoff, retrenchment and closure in
establishments employing not less than 100 workmen. It also inserted procedure for
closing an undertaking and penalty for violation therefor.
Two years later, the Industrial Disputes (Amendment) Act, 1984, was introduced
which inter alia, seeks to make the following amendments in the Act.
(i) It excludes from the definition of 'retrenchment' as contained in the Act 'termination of
the service of a workman as a result of the non-renewal of the contract of employment
on its expiry and on the termination of such contract in accordance with the provisions
thereof'.
(iz) Following the decision of the Supreme Court in the Excel Wear case (AIR 1979 SC
25), some high courts declared invalid the special provisions relating to layoff and
retrenchment contained in the Act which applied to establishments employing
300 or more workmen. It redrafted these provisions on the same lines as in the
amended provision relating to closure, which was inserted by the Industrial Disputes
(Amendment) Act, 1982, (46 of 1982), after taking into consideration the observations
of the Supreme Court in the said case.

Four years later, the aforesaid Bill sought to undertake comprehensive amendments to
the Trade Unions Act, 1926 and the Industrial Disputes Act, 1947 with the intention of
promoting healthy industrial relations, effective bargaining councils at unit, industry or
national levels and, finally, expeditious settlement of industrial disputes through a system
of industrial relations commissions (with labour courts working under them) from whose
decisions appeals would lie only to the Supreme Court. The Bill proposed to set up IRCs both
at the Centre and in the states. These will comprise both judicial and non-judicial members,
the latter being drawn from among persons having eminence in the fields of industry,
labour or management. The IRCs will be high-powered tribunals under Article 323B of the
Constitution and appeals against their orders or awards will be only to the Supreme Court.
These commissions will have jurisdiction in respect of adjudication and will hear appeals
against the order of the labour courts including those relating to registration of bargaining
councils. It is not, however, proposed to entrust them with conciliation functions which
have been traditionally performed by the appropriate government.
The Bill makes a specific provision for bipartite negotiations. The Bill also lays stress on
the need to exhaust all modes of settlement like bipartite discussions, conciliation, voluntary
arbitration, etc., before resort to direct action. Even for the last resort, i.e., strike or lockout,
the conditions prescribed must be met, by either party contemplating it, with corresponding
penalties for resorting to such extreme steps in contravention of the law.
In order to provide quick relief and cut down delays, it is proposed to provide that a
workman or a trade union of which he is a member, can refer an individual dispute directly
to a labour court.
174 • Industrial Relations and Labour Laws

The statement of Objects and Reasons appended to the Bill seeks to lay down the following
objectives and salient features of the amendment:
1. The Industrial Disputes Act, 1947 had been amended from time to time in the light of
experience gained in its actual working, case laws and industrial relations policy of
the government.
2. At present the workman, whose services have been discharged, dismissed, retrenched,
or otherwise terminated under Section 2A of the Act, is unable to approach the labour
court or tribunal in the absence of a reference of industrial dispute by the appropriate
government to the labour court or tribunal. This causes delay and untold suffering to
the workmen. The Industrial Disputes (Amendment) Act, 1982 provided for an in-house
Grievance Settlement Authority for the settlement of industrial disputes connected
with an individual workman employed in the industrial establishment, but it does
not permit the workman to approach labour court or tribunal until such dispute has
been decided by the grievance settlement authority. The labour courts and tribunals
have no power under the Act to enforce the awards published by the appropriate
government.
3. In view of the above, it is considered necessary to provide for workman a direct
access to labour court or tribunal in case disputes arising due to discharge, dismissal,
retrenchment or termination of service of workman. It is also proposed to establish a
grievance redressal machinery as an in-house mechanism in an industrial establishment
with 20 or more workmen without affecting the right of workman to raise an industrial
dispute on the same matter under the provisions of the Act.
4. Accordingly, the Industrial Disputes (Amendment) Bill, 2009, inter alia, seeks to provide
for:
(i) amendment of the term 'appropriate government' defined under section 2(a) of
the Act to amplify the existing definition;
(ii) enhancement of wage ceiling of a workman from ~1,600 per month to ~10,000
per month under Section 2(s) of the Act;
(iiz)direct access for the workman to the labour court or tribunal in case of disputes
arising out of Section 2A of the Act;
(iv) expanding the scope of qualifications of presiding officers of labour court or
tribunals under Sections 7 and 7A of the Act;
(v) establishment of grievance redressal machinery in every industrial establishment
employing 20 or more workmen for the resolution of disputes arising out of
individual grievances;
(vi) empowering the labour court or tribunal to execute the awards, orders or
settlements arrived at by labour court or tribunal.

The Act extends to the whole of India, the original Act came into force on the first day of
April, 1947.
 Industrial Disputes Act: A Contextual Framework • 175

The Supreme Court in Bharat Singh v. Management of New Delhi Tuberculosis Centre, New
Delhi4 held that in interpretation of the welfare statutes: 'the courts have steered clear of the
rigid stand of looking into the words of the section alone but have attempted to make the
object of the enacbnent effective and to render its benefits to the persons in whose favour
it is made'. Again, in Smt. Dhanalakshmi v. Reserve Bank of India 5, the division bench of the
Karnataka High Court observed:

Liberal and not strict rule of construction is required to be followed while

dealing with welfare statutes. Semantic luxuries should not be permitted to
be misplaced in the interpretation of bread and butter statutes. As consistently
held by the courts, welfare statutes must, of necessity, receive a broad
interpretation. It should not be lost sight of so that the welfare statutes in a
welfare state are enacted with the object of promoting general welfare, which
should not be dipped in the ocean of wrangles of technicalities.

Premier Automobiles Limited v. Kamalakar Shantaram Wadke 6 is a leading authority on

jurisdiction of civil courts in industrial disputes. The three-judge bench of the Supreme Court
held that (i) If the dispute is not an industrial dispute, nor does it relate to enforcement of
any other right under the Act, the remedy lies only in the civil court. (ii) If the dispute is an
industrial dispute arising out of a right or liability under the general or common law and
not under the IDA, 1947, the jurisdiction of the civil court is alternative, leaving it to the
election of the suitor concerned to choose his remedy for the relief which is competent to
be granted in a particular remedy. (iii) If the industrial dispute relates to the enforcement
of a right or an obligation created under the industrial Disputes Act, then the only remedy
available to the suitor tis to get an adjudication under the Industrial Disputes act. (iv) If the
right which is sought to be enforced is a right created under the Industrial Disputes Act,
such as Chapter VA, then the remedy for its enforcement is either Section 33C or raising
of an industrial dispute as the case may be. Cases of industrial disputes, by and large, are
invariably bound to be covered by principle (iii) stated above.
Again a three-judge bench of the Supreme Court in Rajasthan State Road Transport
Corporation v. Krishna Kant7 held that:
(i) 'Where the dispute arises from general law of contract, i.e., where reliefs are claimed
on the basis of the general law of contract, a suit filed in civil court cannot be said to
be not maintainable, even though such a dispute may also constitute an 'industrial
dispute' within the meaning of Section 2(k) or Section 2A of the Industrial Disputes
Act, 1947. (ii) Where, however, the dispute involves recognition, observance or
enforcement of any of the rights or obligations created by the Industrial Disputes
Act, the only remedy is to approach the forums created by the said Act. (iii) Similarly,

4 1986 Lab. IC 850: AIR 1986 SC 842.

5 1999 Lab. IC 286 (Kamataka).
6 (1976) 1 sec 496.
7 (1995) 5 sec 75: 1995 LLR 481 (SC).
176 • Industrial Relations and Labour Laws

where the dispute involves the recognition, observance or enforcement of rights and
obligations created by enacbnent, like Industrial Employment (Standing Orders)
Act, 1946-which can be called "sister enacbnents" to Industrial Disputes Act and
which do not provide a forum for resolution of such disputes, the only remedy
shall be to approach the forums created by the Industrial Disputes Act provided
they constitute industrial disputes within the meaning of Section 2(k) and Section
2A of Industrial Disputes Act or where such enacbnent says that such dispute shall
be either treated as an industrial dispute or says that it shall be adjudicated by any
of the forums created by the Industrial Disputes Act. Otherwise, recourse to civil
court is open.
In Rajasthan State Road Transport Corporation v. Zakir Hussain 8, the Supreme Court held
that the employees of the corporation were not civil servants and they were not entitled
to protection of Article 311(2) of the Constitution. While dealing with the question of
jurisdiction of civil courts in matters of industrial disputes, the Court applied the principles
enunciated in Rajasthan State Road Transport Corporation v. Krishna Kant (supra) and held that
the respondent ought to have approached the remedies provided under the IDA and civil
court has no jurisdiction to entertain and try the suit.
A three-judge bench of the Supreme Court in Rajasthan SRTC v. Khadarmal9 again
considered the question regarding jurisdiction of the civil court in the matter of termination
of service of a probationer following its earlier judgements in Rajasthan SRTC v. Zakir
Hussain (supra) and Rajasthan SRTC v. Krishna Kant (supra), held that as the civil court had
no jurisdiction, the decrees which were passed have no force of law.
It appears that in Rajasthan SRTC v. Bal Mukund Bairwa10, a two-judge bench of the
Supreme Court noticed some conflict in the decisions in Krishna Kant and Khadarmal and
accordingly, referred the matter to a larger bench.
A three-judge bench of the Supreme Court in Rajasthan State Road Transport Corporation
v. Bal Mukund Bairwa 11 revisited the issue with regard to jurisdiction of the civil court to
entertain suits questioning the orders of termination and held that if an employee intends
to enforce his constitutional rights or a right under a statutory regulation, the civil court will
have necessary jurisdiction to try a suit. If however, he claims his right and corresponding
obligations only in terms of the provisions of the Industrial Disputes Act or the sister laws
so called, the civil court will have none. The Court also held that it would not be correct to
contend that only because the employee concerned is also a workman under the Industrial
Disputes Act, 1947, or the conditions of his service are otherwise governed by the standing
orders certified under the Industrial Employment (Standing Orders) Act, 1946, ipso facto the
civil court will have no jurisdiction.
The aforesaid matter was again considered by the Supreme Court in Rajasthan SRTC
v. Mohar Singh 12 • The Court held that if the infringement of the standing orders or other
provisions of the Industrial Disputes Act are alleged, the civil court's jurisdiction may be
held to be barred but if the suit is based on the violation of principles of common law or
constitutional provisions or on other grounds, the civil court's jurisdiction may not be held

s (2005) 7 sec 447.

9 (2006) 1 sec 59.
10 (2007) 14 sec 41.
11 (2009) 4 sec 299_
12 (200s) 5 sec 542_
 Industrial Disputes Act: A Contextual Framework • 177

to be barred. If no right is claimed under a special statute in terms whereof the jurisdiction
of the civil court is barred, the civil court will have jurisdiction.
In RSRTC v Deen Dayal Sharma 13, the respondent who had hardly served for 3 months as
a conductor was dismissed by the Rajasthan State Road Transport Corporation for not issuing
tickets to six passengers. He then filed a civil suit. The trial judge dismissed the petition. The
first and second appeals filed against the said order were also dismissed. The respondent
then filed an appeal before the Supreme Court. He asserted that the deparbnental inquiry as
contemplated under the standing orders ought to have been held before issuing the order of
dismissal and in absence thereof such order was liable to be quashed. However, the Supreme
Court held that such right, if available, could have been enforced by the respondent only by
raising an industrial dispute and not in a civil suit. In such circumstances, it held that civil
court had no jurisdiction to entertain and try the suit filed by the respondent.

13 (2010) 5 SCALE 1.
Concept and Scope
of Individual and
Industrial Disputes 14
Section 2 (k) of the Industrial Disputes Act, 1947, defines 'industrial dispute,1 to mean:

Any dispute or difference 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 labour, of any person.

1 The definition of 'industrial dispute' is taken from an (English) Act 1906 (6 Edw VII C47) and slightly
modified. The definition ran:
any dispute between employers and workmen which is connected with the employment or
non-employment or the terms of employment or with the conditions of labour of any person.
The definition only adds to the list of disputes 'one between employers'. [See Madras Gymkhana
Club Employees' Union v. Gymkhana Club, (1967) 2 LLJ 720, 729 (SC)].
Prior to 1947 the Trade Dispute Act, 1929, used the expression 'trade dispute'. Section 20) of
the Trade Dispute Act, 1929 defined 'trade dispute' to mean:
any dispute or difference between employers and workmen and workmen and workmen,
which is connected with the employment or non-employment or the terms of employment
or with the conditions of labour of any person,
which was borrowed from Section 8 of the (English) Industrial Courts Act, 1919.
The scope of Section 2 0) attracted the attention of the Royal Commission of Labour. The
Commission suggested widening the coverage of the definition. The Trade Disputes (Amendment)
Act, 1938, accordingly amended the definition of 'trade dispute' under the Trade Disputes Act,
1929 to include disputes between employers and employees, and at the same time provided for the
omission of the following words 'occurring between an employer and any of his workmen' from
Section 3 of the Trade Disputes Act, 1929.
The amended definition of 'trade dispute' was incorporated in the Industrial Disputes Act,
1947.
180 • Industrial Relations and Labour Laws

The dimensions of the aforesaid definition determine the permissible area of both
community intervention in industrial relations as well as labour activity.
Stated broadly, the definition of 'industrial dispute' contains two limitations. (i) The
adjective 'industrial' relates to the disputes of an industry as defined in the Act, and (ii) it
expressly states that not all sorts of dispute and differences but only those which bear upon
the relationship of employers and workmen regarding employment, non-employment,
terms of employment and conditions of labour are contemplated.2
Broadly speaking, the definition of 'industrial dispute' may be analysed under four heads:
(i) Factum of industrial dispute;
(iz) Parties to the dispute;
(iii) Subject matter of the dispute;3 and
(iv) Origin of the dispute.

A. Factum of Industrial Dispute

The existence of a dispute or difference is the key to the expression 'industrial dispute'. The
expression 'dispute or difference' connotes a real and substantial difference having some
element of persistency and continuity till resolved, and likely, if not adjusted, to endanger
the industrial peace of the undertaking or the community .4 When the parties are at variance,
and the dispute or difference is connected with the employment, or non-employment or
the terms of employment or with the conditions of labour, there comes into existence an
industrial dispute. 5 But there is divergence of opinion among the courts on the issue whether
a mere demand to the appropriate government or to the conciliation officer without a dispute
being raised by the workmen with the employer regarding such demand can become an
industrial dispute. The Supreme Court in Sindhu Resettlement Corporation Ltd v. Industrial
Tribunal 6 answered it in negative. Observed Justice Bhagwati:

If no dispute at all was raised by the (workmen) with the management, any
request sent by them to the government would only be a demand by them
and not an industrial dispute between them and their employer. An industrial
dispute, as defined, must be a dispute between employers and employers,
employers and workmen and workmen and workmen. A mere demand to
a government, without a dispute being raised by the workmen with their
employer, cannot become an industrial dispute.7

2 Madras Gymkhana Club Employees' Union v. Gymkhana Club, op. cit. 720-28.
3 Workmen of Dikmakuchi Tea Estate v. Management of Dimakuchi Tea Estate, (1959) 1 LLJ 500 (SC).
4 Sambhu Nath Goyal v. Bank of Baroda, (1978) 2 SCC. 353.
5 (1978) 2 sec. 353_
6 Sindhu Resettlement Corporation Ltd v. Industrial Tribunal, (1968) LLJ 834.
7 Id. at 839. The aforesaid view was followed in Fedders Lloyd Corporation (Pvt.) Ltd v. Lieutenant
Governor, (1970) Lab. IC 421. In this case, Justice Deshpande speaking for the division bench of the
Delhi High Court observed:
a demand by the workmen must be raised first on the management and rejected by them
before industrial dispute can be said to arise and exist and that the making of such a demand
to the conciliation officer and its communication by him to the management, who rejected
the demand is not sufficient to constitute an industrial dispute.
 Concept and Scope of Individual and Industrial Disputes • 181

The aforesaid view does not appear to be in conformity with the earlier decision of
the Supreme Court in Bombay Union of Journalists v. The Hindu 8 wherein it was held that
industrial dispute must be in existence or apprehended on the date of reference. The net effect
of the principle is that even if the demand was not made earlier before the management and
rejected by them and is raised at the time of reference or during conciliation proceedings,
the dispute may be an 'industrial dispute'.
The aforesaid view in the Hindu (Supra) appears to have been followed in Shambhu
Nath Goel v. Bank of Baroda. 9 An employee of the Bank of Baroda was dismissed from service
after an inquiry in which the employee appeared and claimed reinstatement. Further,
when the union approached the conciliation officer, the management resisted the claim for
reinstatement. Thereafter, the employee preferred an appeal to the competent authority.
Before the tribunal, the management raised the preliminary objection that the employee
had not made a demand. The tribunal accepted the claim of the management and held that
the reference was incompetent. Thereafter, the employee preferred an appeal before the
Supreme Court. The question arose whether the government's reference was proper and
in accordance with the provisions of the Act. The Court observed:

... to read into the definition the requirement of written demand for bringing
into existence an industrial dispute would be tantamount to rewriting the
section.
The Court added:

Undoubtedly, it is for the government to be satisfied about the existence of the

dispute and the government does appear to be satisfied. However, it would be
open to the party impugning the reference that there was no material before the
government, and it would be open to the tribunal to examine the question, but
that does not mean that it can sit in appeal over the decision of the government.
In Workmen of Hindustan Lever Ltd v. Hindustan Lever Ltd, 10 the Government of
Maharashtra referred a dispute between Hindustan Lever Ltd and its workmen for adjudication
to the industrial tribunal, Maharashtra. A preliminary objection was raised by the employers
that reference was incompetent because the dispute raised by workmen and referred by the
government to the industrial tribunal was not an 'industrial dispute' because if the demand as
raised is conceded, it would be tantamount to allowing the workmen to decide the strength of
the work force required in various grades and it is well-settled that determining and deciding
the strength of work force required in an industry is a management function. The industrial
tribunal held that the dispute was not an 'industrial dispute'. On appeal, the Supreme Court set
aside the award and remitted the matter for disposing of the reference on merits and observed:

The expression 'industrial dispute' has been so widely defined as not to leave
anything out of its comprehension and purview involving the area of conflict
that may develop between the employer and the workmen and in respect of

8 Bombay Union of Journalists v. The Hindu. AIR 1963 SC 318: In T K Padamanabha Menon v. P V Kara,
(1968) Lab. IC, 1134, the Kerala High Court held that no specific demand by the workmen was
necessary to bring into existence an 'industrial dispute'.
9 Shambhu Nath Goyal v. Bank of Baroda, (1978) 2 sec 353.
10 (1984) 4 sec 392 (SC).
1 8 2 • Industrial Relations and Labour Laws

which a compulsory adjudication may not be available. This is recognized to

be the width and comprehension of the expression.
Be that as it may, the full bench of the Himachal Pradesh High Court in M/s Village
Papers Pvt. Ltd v. State of Himachal Pradesh 11 has summarized the views expressed by the
Supreme Court and high courts on the aforesaid subject as follows:
1. A mere demand made to the government cannot become an industrial dispute without
it being raised by the workmen with their employer.
2. If such a demand is made to the government, it can be forwarded to the management
and if rejected, becomes an industrial dispute.
3. Though it is apparent that for a dispute to exist, there must be a demand by the
workmen or the employer. This demand need not be in writing, unless the matter
pertains to a public utility service, in view of the provisions of Section 22 of the
Industrial Disputes Act, 1947.
4. The demand need not be sent directly to the employer nor it is essential for it to be
made expressly. It can be even implied or constructive, e.g., by way of filing an appeal
or refusal of an opportunity to work when demanded by the workmen. A demand
can be made through the conciliation officer, who can forward it to the management
and seek its reaction. If the reaction is in negative and not forthcoming and the parties
remain at loggerheads, a dispute exists and a reference can be made.
5. Whether a dispute exists has to be decided in each case and is dependent on the facts
and circumstances of that case. The crucial time for this examination is the date of
making the reference; material which comes into existence after the reference has been
made is not relevant.
6. Only that dispute which exists or is apprehended can be referred. If there is a different
kind of demand made before the management and the reference pertains to some other
demand, then the reference is incompetent, e.g., reference pertains to reinstatement
whereas the demand pertains to retrenchment compensation.
7. The jurisdiction of the labour court/industrial tribunal is limited to the points
specifically referred and matters incidental thereto. Since the scope of its jurisdiction
and power is circumscribed by the order of reference, it is not permissible for it to go
beyond the terms of reference.
8. Thus, if a reference is made without any demand having been made on the employer
either expressly or impliedly, there is no occasion for the employer to point out the
nature of the dispute so as to facilitate the government for making an appropriate
reference of the dispute.

B. Parties to the Industrial Dispute

In order to fall within the definition of an 'industrial dispute', the dispute must be between:
(i) employers, or (ii) employers and workmen, or (iii) workmen and workmen.
Besides interpreting the key words, namely 'employer' and 'workman', which are
statutorily defined and will be discussed in another section, tribunals and courts have
indulged in judicial legislation.

11 (1993) Lab. IC 99 at 102-03.

 Concept and Scope of Individual and Industrial Disputes • 183

Trade unions as such are not mentioned in the definition of 'industrial dispute' because
they act on behalf of the workmen and, therefore, when a trade union raises a dispute, the
workmen are deemed to be parties to the dispute. 12 However, the parties to the industrial
dispute do not include disputes (z) between government and an industrial establishment
or (iz) between workmen and non-workmen. 13
The words 'employers and employers' which did not occur in the Trade Disputes Act,
1929, were inserted in the Industrial Disputes Act, 1947, in order to give the definition of
'industrial dispute' a wide coverage. The disputes between employers and employers may arise
in respect of wage matters in an area where labour is scarce or disputes of similar character.
The words 'workmen and workmen' occur in Section 2 (k) to include the disputes
between them either directly or through their trade unions. Such a dispute may be
demarcation dispute, inter-union dispute, etc. Inter-union dispute has, however, not been
held to be an 'industrial dispute'. 14
The aforesaid three expressions, namely, between employers and employers or between
employers and workmen, or between workmen and workmen read with Section 13 (2) of
the General Clauses Act, 1897 lead us to make the following categorizations:
(i) Where both parties include more than one person: employers and employers, employers
and workmen, workmen and workmen.
(iz) Where only one of the parties includes more than one person: employer and employers,
employer and workman, employers and workman, workmen and workman.
(iii) Where both the parties are in singular: employer and employer, employer and
workman, workman and workman.
(iv) Where both the parties as in category (z) include more than one person, the dispute
would be a collective dispute. Further, where one of the parties include more than
one person, it may be categorized as 'collective dispute'. However, doubts have
been expressed whether the dispute between 'employers and workman' would be
a 'collective dispute'. Moreover, where both the parties as in category (ii) above are
composed of single individuals, the case falls into the category of 'individual dispute'.

C. Subject Matter of Industrial Dispute

In order to be an 'industrial dispute', the dispute must be:
... connected with the employment or non-employment or the terms of employment
or with the conditions of labour, of any person.
In practice, however, it is exceedingly difficult to draw a line between various
expressions used to indicate the subject-matter of industrial dispute. Generally speaking, the
expressions used in Section 2(k) are of wide amplitude and have been put in juxtaposition
to make the definition thoroughly comprehensive. 15 Thus, the phrase 'conditions of labour'
is wide enough to include 'terms of employment' as well as matters connected with
unemployment. Similarly, the expression 'terms of employment' includes certain matters
relating to 'employment or non-employment'.

12 Bangalore W C and Mills Co. v. Their Workmen, (1968} 1 LLJ 514 at 518.
13 Madras Gymkhana Club Employees Union v. Madras Gymkhana Club, (1967) 2 LLJ 720.
14 Conway v. Wade, (1909} AC 506,517. There is no decided case in India on this subject.
15 Western India Automobiles Association v. Industrial Tribunal, (1949) LLJ 245 (FC}.
184 • Industrial Relations and Labour Laws

It is however, doubtful if the legislature intended any water-tight comparbnentalization.

The words 'in connection with' widen the scope of 'industrial disputes' and do not restrict
it by any means.
The legislature used these phrases in the definition of 'industrial dispute' so that all aspects
of labour problems may be resolved through the industrial relations machinery provided under
the Industrial Disputes Act, 1947. Any attemptto draw a rigid line would limit, or at least create
an impression of limiting the scope of 'industrial dispute' which, it must be emphasized, deals
not only with the disputes between employers and workmen but also between'employers and
employers' and between 'workmen and workmen'. However, since every expression used by
the legislature indicates certain meaning and idea, it is necessary to examine them.
'Employment' brings in the contract of service between the employer and the
employed. 16 The concept of employment involves three ingredients: (i) employer, (ii)
employee and (iii) the contract of employment. The employer is one who employs, i.e., one
who engages the services of other persons. The employee is one who works on hire basis.
The employment is the contract of service between the employer whereunder the employee
agrees to serve the employer, subject to his control or supervisions.
'Unemployment' is the opposite of 'employment' and would mean that disputes
of workmen which arise out of service with their employers are within the ambit of the
definition. It is the positive or negative act of the employer that leads to employment or
unemployment. It may relate to an existing fact of unemployment or a contemplated
unemployment. Four illustrations were cited by the Federal Court in Western Indian
Automobiles Association v. Industrial Tribunal 17 in support of the aforesaid explanations. Of
them, two are in respect of' employment and two are in respect of unemployment.' A dispute
is as to 'employment' or connected with or arising out of employment if:
(i) An employer has already employed a person and a trade union says 'please do not
employ him'.
(iz) An employer gives notice to a union saying that he wishes to employ two particular
persons. The union says 'no'.
A matter raises a dispute as to unemployment or contemplated unemployment if:
(i) An employer may dismiss a man, or decline to employ him.
(iz) An employer contemplates turning out those who are already in his employment.
The failure to employ or the refusal to employ are actions on the part of employer which
would be covered by the expression 'employment or unemployment'. Accordingly, the
expression 'unemployment' is sufficiently elastic to include all cases of (z) tennination of service
either voluntary or by act of parties (as employer or workmen). The instances of this kind are
dismissal,18 discharge, retrenchment1 9, compulsory retirement,2° etc. It also includes temporary
unemployment, e.g., suspension, layoff, compulsory leave, lockout, strike, etc. Further, it
would include within its scope the words arising out of unemployment, e.g., reinstatement,21
re-employment, compensation and back wages for wrongful termination of service.

16 Shankar Balaji Waje v. State of Maharashtra, (1961) 1 LLJ 119 (SC).

17 Western Indian Automobiles Association v. Industrial Tribunal, (1949) LLJ 245.
18 Ibid. See also Sindhu Resettlement Corporation Ltd v. LT., (1965) 2 LLJ 270 (Gujarat).
19 M/s Altherton West and Co. Ltd v. Jute Mill Mazdoor Union, AIR 1953 SC 24.
2° F L Corporation (P) Ltd v. Union of India, AIR 1970 Delhi, 60, 66.
21 Bilash Chander v. Balmer Lawrie and Co. Ltd, AIR 1953 Calcutta 613.
 Concept and Scope of Individual and Industrial Disputes • 185

The expression 'terms of employment' and 'conditions of labour' indicate the kind of
conflict between those engaged in industry on the opposite but cooperative sides.22 These words
connote dispute to be the share in which the receipts in a commercial venture shall be divided.
The expression 'terms of employment' generally covers basic wages, dearness allowance
and other allowances, wages on promotion, wages on demotion, wages on transfer out of
town, wages for over-time work, wages for work on holiday, payment of wages, recovery
of wages, bonus, retiral benefits, e.g., pension, provident fund, gratuity, pension, etc.
The expression 'conditions of labour' is much wider in scope and refers to the
conditions of service under which they work and the amenities provided or to be provided
to them. This expression may include hours of work, holidays, leave, health, safety and
welfare of labour.
Quite apart from those matters which have been said to be covered in the subject-
matter of industrial dispute, an analysis of decided cases reveals that following matters have
also been included in the definitions: (i) alteration of conditions of service of employees23
(ii) demand for modification of standing orders24 (iii) disputes regarding contract labour25
(iv) dispute on lockout in disguise of closure26 (v) dispute of workmen whose cases are left
unsettled 27 (vi) transfer of workman from one place to another28•
In Workmen of Hindustan Levers Ltd v. Hindustan Levers Ltd29, a question arose whether
a demand for confirmation in the promoted post would be a dispute connected with the
terms of employment or the conditions of labour within the meaning of Section 2 (k). The
Supreme Court answered the question in the affirmative and observed:

In respect of the classification, a dispute can conceivably arise between the

employer and the workman because failure of the employer to carry out the
statutory obligation would enable the workman to question his action which
will bring into existence a dispute. It would become an industrial dispute
because it would be connected with the conditions of employment. It becomes
a condition of employment because necessary conditions of service have to
be statutorily prescribed, one such being classification of the workmen was
to confirm employees employed in an acting capacity in a grade, it would
unquestionably be an industrial dispute.
However, dispute between two unions regarding membership of the union is not an
'industrial dispute. 130
In Cipla Limited v. Maharashtra General Kamgar Union, 31 the Supreme Court held that,
if the employees are working under a contract covered by the Contract Labour (Regulation

22 Indian Paper Pulb Co. Ltd v. Their Workmen, AIR 1949 FC 148; See also Madras Gymkhana Club, (1967}
2LLJ720.
23 Cooperative Central Bank Ltd v. Addl LT, AIR 1970 SC 245.
24 Shahadara (Delhi) Saharanpur Light Rly. Co. v. SS Railway Workers, AIR 1960 SC 945.
25 Standard Vacuum Refining Co. of India Ltd v. Workmen, AIR 1960 SC 945.
26 Express Newspapers (P) Ltd v. Workmen, AIR 1963 SC 569.
27 Bata Shoe Co. v. D N Ganguly, AIR 1961 SC 1158.
28 Kerala Rubber and Reclaims Ltd v. PA Sunny, (1989} Lab. IC 964 (Kerala}.
29 1984 Lab. IC 1573 (SC}.
30 Tamil Nadu National Engineering Employees Union v: TI Cycles of India Ltd, (1994) Lab. IC NOC 21.
31 (2001) 3 sec 101.
186 • Industrial Relations and Labour Laws

and Abolition) Act, then the labour court or the industrial tribunals have no jurisdiction
to decide the question of abolition of contract labour as it falls within the province of an
appropriate government to abolish the same. But if the workmen claim that they have been
directly employed by the company but the contract itself is a camouflage and, therefore,
needs to be adjudicated, is a matter which can be adjudicated by the appropriate industrial
tribunal or labour court under the Industrial Disputes Act, 1947.

D. Origin of Industrial Dispute

The scope of the expression 'any person' occurring in the last part of the definition of
'industrial dispute' has been a subject matter of controversy. The question has arisen in
several cases before the high courts and also before the Supreme Court as to what exactly
is the scope of the expression 'any person' as contemplated in Section 2 (k). If construed
literally, it may mean and include both natural as well as artificial persons. On the contrary,
if interpreted narrowly, the expression 'of any person' may be equated with 'workman'.
How and where to draw a line is not easy to answer.
An analysis of the decided cases of tribunals and courts reveals that prior to the
Supreme Court decision in Dimakuchi Tea Estate (supra), there was no unanimity of opinion
with regards to the scope of the expression 'any person'. Three views were discernible.
(i) The first view emphasized the literal meaning and held that employment or non-
employment or terms of employment or conditions of labour of any person whether that
person is a workman or not and whether that person was a sweeper in a director's bungalow
could form the subject matter of industrial dispute. 32 According to them, if 'the intention of
the Legislature was to restrict the scope of the expression of industrial dispute as a dispute
between employers and workmen relating to the terms of employment of workmen alone,
there was no need to use the wider expression of 'any person'. 33
(ii) The second view equated the word 'person' with that of 'workman'. According to
the supporters of this line of view, unless the 'person' was a 'workman' within the meaning
of Section 2(s) of the Industrial Disputes Act, 1947, a dispute concerning him could not be
an 'industrial dispute' under Section 2(k).34
(iii) The third view adopted a middle course, namely that 'concerned person' need
not necessarily be a 'workman' within the meaning of the Act; it was enough if the present
workmen of the employer were interested in such a person and the employer had the
capacity to grant the requested demand. The supporters of this view emphasized that
merely because such a dispute would become an 'industrial dispute', it did not follow that
the demand would be accepted.
The construction of the word 'any person' came up for consideration before the
Supreme Court in Assam Chah Karamchari Sangha v. Dimakuchi Tea Estate. 35 There, Mr Banerjee
was appointed by the tea estate as an assistant medical officer, on three months' probation.

32 Kanpur Woolen Mills v. Kanpur Mazdoor Congress, (1950) LLJ 61. 1. (IC}; Alexandra Jute Mills Ltd v.
Their Workmen, (1950) LLJ 1262; (IT}, Lister Antiseptic and Dressing Co. Ltd v. Their Employees, (1951)
2 LLJ 791 (IT); Delhi Administration v. Edward Keventer Ltd, (1978) 2 LLJ 209.
33 Kanpur Woolen Mills, v. Kanpur Mazdoor Congress, (1950) LLJ 611.
34 United Commercial Bank Ltd v. Kedar Nath Gupta, (1952) 1 LLJ 782; Mahahoob Sahi Kalbarga Mills Co.
Ltd v. Their Employees, (1959) 2 LLJ 196.
35 Assam Chah Karmachari Sanagha v. Dimakuchi Tea Estate, AIR (1958) SC 353.
 Concept and Scope of Individual and Industrial Disputes • 187

After 3 months, his services were terminated by the management after paying him one
month's salary in lieu of notice. The legality of the termination of service was questioned
and the cause of the assistant medical officer was espoused by the workers' union of tea
estate. The government of Assam referred the dispute to the industrial tribunal about his
reinstatement. The management raised a preliminary objection that the assistant medical
officer was not a 'workman' and hence the industrial tribunal had no jurisdiction to adjudicate
the question of reinstatement. The tribunal upheld the management's plea. On appeal before
the Supreme Court, a question arose whether the workmen of the tea estate can raise an
industrial dispute regarding the termination of service of an assistant medical officer (who
was not a workman of the Tea Estate. Justice S K Das, who wrote the majority judgement
for the Court, while explaining the expression 'any person' in the definition clause held
that it cannot mean anybody and everybody in this world. The expression according to his
Lordship means:

... a person in whose employment, or non-employment, or terms of employment

or conditions of labour the workmen as a class have a direct or substantial interest
with whom they have under the scheme of the Act, a community of interest.
Our reason for so holding is not merely that the Act makes a distinction between
workmen and non-workmen, but because a dispute to be a real dispute must be
one in which the parties to the dispute have a direct or substantial interest. Can
it be said that workmen as a class are directly or substantially interested in the
employment, non-employment, terms of employment or conditions of labour of
persons who belong to the supervisory staff and are, under the provisions of the
Act, non-workmen and for whose representation the Act makes no particular
provision? We venture to think that the answer must be in the negative.
He further pointed out that though a dispute concerning a person who is not a
'workman' may be an 'industrial dispute' within the meaning of Section 2(k), having regard
to the scheme, object and the provisions of the Industrial Disputes Act, 1947 the expression
'any person' in the definition clause must be read subject to two crucial limitations and
qualification, namely:
(i) the dispute must be a real dispute between the parties to the dispute (as indicated in
the first two parts of the definition clause) so as to be capable of settlement or adjudication
by one party to the dispute giving necessary relief to the other, and (ii) the persons regarding
whom the dispute is raised must be one in whose employment, non-employment, terms
of employment or conditions of labour (as the case may be) the parties to the dispute have
direct or substantial interest.
He then observed:

In the absence of such interest, the dispute cannot be said to be a real dispute
between the parties. Where the workmen raise a dispute as against their
employer, the person regarding whose employment, non-employment, terms
of employment or conditions of labour the dispute is raised need not be the
'workmen' but workmen as a class have a direct or substantial interest.
The Court in its majority judgement accordingly held that the medical officer was
not a 'workman' because he could not be held to have any community of interest with the
other members of the union to justify the industrial dispute being raised with regard to his
unemployment.
18 8 • Industrial Relations and Labour Laws

The aforesaid majority view was reaffirmed by the larger bench of the Supreme Court
in Workmen of Dahingeapar Tea Estate v. Dahingeapar Tea Estate36 and was reiterated in Kays
Construction Co. Ltd v. Its Workmen. 37 In the former case, a tea estate was sold as a going
concern and the purchaser continued to employ the labour and some other members of the
staff of the vendor. Under the agreement of sale, an option was given to the purchaser to
continue to employ the members of the staff. It also made the vendor liable for the claims
made by the members of the staff not retained in service by the purchaser. The claims of
the members of the staff not retained in service by the vendee tea estate was raised by the
workmen of the vendee tea estate. A question arose whether the dispute raised by such
workmen regarding the employment of rest of the staff was an 'industrial dispute.' Justice
SK Das (who wrote the majority view in Dimakuchi Tea Estate supra) delivering the judgement
for the Court applied the test laid down in Dimakuchi case and held that such a dispute was
an 'industrial dispute'. In the latter case, the business of M/s Kays Construction Co. was
taken over by a private company called M/ s Kays Construction Co. (Pvt) Ltd. The successor
company had the proprietor, his wife and manager of the vendor company as its directors.
The transferee employer refused to employ certain workmen of the transferrer employer. The
workmen of the transferee employer raised a dispute regarding the erstwhile co-employees
of the transferrer employer. It was held that a dispute which validly gave rise to a reference
under the Industrial Disputes Act need not necessarily be a dispute directly between an
employer and his workmen. The Court further held that the definition of the expression
'industrial dispute' was wide enough to cover a dispute raised by the workmen in regard
to the non-employment of others who may not be the workmen at the material time.
The application and interpretation of 'any person' again came up for consideration
of the Supreme Court in Standard Vacuum Refining Co. of India Ltd v. Their Workmen. 38 In
this case, regular workmen of the company raised an industrial dispute relating to contract
labour. The dispute was that the workers of the contractor (who in effect were doing the
work of the company) unlike regular workmen of the company, were getting low wages
and were not provided any security of tenure. The regular workmen who raised their
dispute, therefore, wanted that the contract system should be abolished and the contractors
be considered as workmen of the company. Following Dimakuchi Tea Estate (supra), the
Supreme Court held that the dispute was an 'industrial dispute' because: (i) the regular
workmen of the company had a community of interest with the contractor's workers (who
were, in effect, working for the same employer), (ii) the workmen had substantial interest in
the subject-matter of the dispute of contractor's workers in the sense that the class to which
they belong (namely workmen) was substantially affected thereby and (iii) the company
could give relief in the matter.
Again in Bombay Union of Journalists v. The Hindu 39, the cause of a working journalist
was taken up by a trade union of his profession, but not by other journalists under the
employment of that particular branch office of the Hindu, in which he was employed. The
Supreme Court, while determining the scope of 'any person' demonstrated how the test of
'direct and substantial control' could be applied. Justice Shah observed:

36 Workmen of Dahingeapur Tea Estate, AIR 1958 SC 1026.

37 Kays Construction Co. Ltd v. Its Workmen, AIR 1959 SC 208.
38 Standard Vacuum Refining Co. of India Ltd v. Their Workmen, AIR 1960 SC 948; Bombay Union of
Journalists v. The Hindu, (1994) 2 LLJ 600.
39 Bombay Union of Journalists v. The Hindu, AIR 1963 SC 318.
 Concept and Scope of Individual and Industrial Disputes • 189

The principle that the persons who seek to support the cause of a workman
must themselves be directly and substantially interested in the dispute in our
view applied to this class of cases also; persons who are not employees of the
same employer cannot be regarded as so interested that by their support they
may convert an individual dispute into an industrial dispute.
This application of the test only confirms the fears expressed by Justice Sarkar of the
Supreme Court in his dissenting judgement in Dimakuchi Tea Estate case. 40 Adverting later
to the fact that the Act is dealing with a new concept, that of relations between employer
and employee or between capital and labour-he sounded a warning to bear in mind that
the concept is undergoing a 'fast change' from day-to-day. He observed:

The numerous and radical amendments made in the Act since it came on the
statute book not so long ago, testify to the fast-changing nature of the concept.
Bearing all these things in mind, I find it almost impossible to define adequately
or with any usefulness an interest which will serve the purposes of the Act. I
feel that an attempt to do so will introduce a rigidity which will work harm and
no good. Nor does it, to my mind, in any manner help to define such interest
by calling it direct and substantial.
He added:

It is enough to assume that as normal men, workmen would not raise a dispute
or threaten industrial peace on account of it unless they are interested in it ...
It is not a condition of an industrial dispute that workmen must be interested
in it and no question of interest falls for decision by a court if it can be called
upon to decide whether a dispute is an industrial dispute or not.
In All India Reserve Bank Employees' Association v. Reserve Bank ofIndia 41 the Court coined
a new phrase 'vitally interested' to determine the scope of 'any person' in Section 2(k). In
this case, a question arose whether the 'workmen' belonging to class III (who drew less than
f500 per month) of the Reserve Bank of India were entitled to raise the dispute in respect of
Class II employees who were doing supervisory nature of duties and drawing more than
f500 per month and were excluded from the ambit of 'workmen'. The Supreme Court, after
referring to the first excerpt (cited earlier by the author) in Diniakuchi Tea Estate supra, added:

It may, however, be said that if the dispute regarding employment, non-

employment, terms of employment or conditions of labour of non-workmen
in which workmen are themselves vitally interested, the workmen may be able
to raise an industrial dispute. Workmen can, for example, raise a dispute that a
class of employees not within the definition of workmen should be recruited by
promotion from workmen. The workmen can also raise a dispute about the terms
of the their own employment though incidentally the terms of employment of
those who are not workmen is involved. But workmen cannottake up a dispute
in respect of a class of employees who are not workmen and (in whom workmen)
have no direct interest of their own. What direct interest suffices, is a question
of fact but it must be a real and positive interest and not fanciful or remote.

40 Workmen of Dimakuchi Tea Estate v. Management of Dimakuchi Tea Estate, (1959) ILLJ 500.
41 All India Reserve Bank Employees' Association v. Reserve Bank of India, AIR 1966 SC 305.
19 o • Industrial Relations and Labour Laws

The Court also rejected the management's contention that the tribunal had no
jurisdiction to adjudicate in respect of the dispute between it and those of its employees
who fell within the purview of 'workmen'. Observed Justice Hidayatullah:

It follows, therefore, that the national tribunal was in error is not considering the
claims of Class II employees whether at the instance of members drawing less
than ~500 as wages or at the instance of those lower down in the scale of wages
in excess of ~500 per month at any stage were not within the jurisdiction of
tribunal or that government could not make a reference in such a contingency.
The aforesaid issue once again came up for consideration in Workmen v. Greaves Cotton
Ltd42 in which it was held :

It would, therefore, appear that the consistent view of this court is that non-
workmen as well as workmen can raise a dispute in respect of matter affecting
their employment, conditions of service, etc., where they have a community
of interest, provided they are direct and not remote.
It is submitted that the aforesaid observation does not correctly reflect the law stated
in earlier decisions of the Supreme Court. In none of the aforesaid decisions of the Supreme
Court, is it stated that non-workmen can raise a dispute in respect of matters affecting their
employment, unemployment, terms of employment or conditions of labour where they
have community of interest.
Greaves Cotton Ltd, poses a question as to what would happen if none at all or all
the 'workmen' have become non-workmen either during the pendency or at the time or
adjudication. Does the dispute survive? The Court answered it in negative. Observed Justice
Jagamohan Reddy:

... if there are no workmen of the category with respect to whom the dispute has
been referred, the tribunal cannot be called upon to prescribe a wage structure
for non-existing workmen, nor does it have the jurisdiction to do so. 43
We are inclined to agree with the aforesaid view. It may, however, be added that the
'direct or substantial interest' test to limit the horizons of the expression 'any person', has
not been uniformly applied. While the workman has been said to be substantially interested
in the suiuect matter of contractor's employees44, he is not held to be so interested in case of
'doctors' or 'supervisors'46 who were not 'workmen' but employees of the same employer.
Again the 'workmen of the transferee company are said to have a direct or substantial interest
in the dispute of unemployment by the transferee employer of the erstwhile co-employees
of the transferor employer.47 Quite apart from this, the application of the aforesaid test
is not in conformity with the statement that 'persons who are not employees of the same

42 Workmen v. Greaves Cotton Ltd, (1971} 2 LLJ 479 (SC}.

43 Workmen v. Greaves Cotton Ltd, (1970) 2 LLJ 479 at 490.
44 Standard Vacuum Refining Co. v. Their Workmen, AIR 1960 SC 948.
45 Workmen of Dimakuchi Tea Estate v. Management of Dimakuchi Tea Estate, (1959) 1 LLJ 500.
46 All India Reserve Bank Employees' Association v. Reserve Bank of India, AIR 1966 SC 305 at 308.
47 Workmen of Dimakuchi Tea Estate, (1959) 1 LJJ 500~ Kays Construction Co. (P) Ltd v. Its Workmen, AIR
1959 SC 208.
 Concept and Scope of Individual and Industrial Disputes • 191

employer cannot be regarded as so interested, that by their support they may convert an
individual dispute into an industrial dispute'. 48
In Bongaigaon Refinery & Petrochemicals Ltd v. Samijuddin Ahmed, 49 a question arose
whether a person who had been issued an offer of appoinbnent which was withdrawn
before he could join on knowing that he had suppressed material facts and who raised a
dispute about his non-employment could fall within the meaning of 'any person' under
Section 2(k) of the Industrial Disputes Act. The Court answered the question in negative and
held that the reference of the dispute under Section 10 of the Act was wholly unwarranted
and uncalled for. The present case did not satisfy the test laid down in Dimakuchi Tea Estate
so as to warrant the validity of the reference being upheld. It rejected the contention of
the respondent that his case fell within the meaning of 'any person' even if he was not a
'workman' stricto sensu and held that 'any person' cannot be read without limitation. In
a case where employer-employee relationship never existed and can never possibly exist
cannot be the subject matter of dispute between employer and workmen. Accordingly, the
Court set aside the judgement of the division bench of the High Court and restored the
judgement of the single judge of the High Court.

A. Judicial Legislation
Is a dispute between an individual workman and his employer an 'industrial dispute'
under Section 2 (k) of IDA? This question has evoked considerable conflict of opinion.
Prior to the Supreme Court decision in Central Provinces Transport Services v. Raghunath
Gopal Patwardhan 50 disclosed three different views as to the meaning of the expression
'industrial dispute'. They are (i) a dispute between an employer and single workman
cannot be an 'industrial dispute'51 (iz) it can be an industrial dispute 52 and (iii) it cannot per
se be an industrial dispute but may become one if taken up by a trade union or a number
of workmen. 53
In Central Provinces Transport Services Ltd v. Raghunath Gopal Patwardhan 54, though the
question which directly arose, was whether a dismissed worker was an employee within the
meaning of Section 2 (10) of the Central Provinces and Brar Industrial Disputes Settlement
Act, 1947, the Supreme Court considered the scope of 'industrial dispute' as defined in
Section 2(k) of the Industrial Disputes Act. The Court, after referring to the divergent
opinions expressed by tribunals and courts as to its applicability in the case of a dispute
between employer and a single workman, observed:

48 Bombay Union of Journalists v. The Hindu, AIR 1963 SC 318.

49 (2001) 9 sec 557.
°
5 Central Provinces Transport Services v. Raghunath Gopal Patwardhan, (1957) 1 LLJ 27 (SC).
51 Kandan Textiles Ltd v. Industrial Tribunal, 875; United Commercial Bank Ltd v. Commissioner of Labour,
(1951) 1 LIJ 1 (SC).
52 Swadeshi Cotton Mills Co. v. Ramzani, (1953) 1 LLJ 277 (LAT); Newspapers Ltd v. State Industrial Tribunal,
(1954) 2 LLJ 263 (Allahabad), reversed in appeal, (1957) 2 LLJ 1 (SC).
53 New India Assurance Co. Ltd v. Central Government Industrial Tribunal, (1954) 2 LLJ 21 (Patna);
J Chowdhary v. MN Banerjee, 56 CWN 256 (1951).
54 Central Provinces Transport Services Ltd v. Raghunath Gopal Patwardhan, (1957) 1 LLJ 27.
192 • Industrial Relations and Labour Laws

The preponderance of judicial opinions is clearly in favour of the last of the three
views stated above, and there is considerable reason behind it. Notwithstanding
that the language of Section (2) (k) is wide enough to cover a dispute between
an employer and single employee, the scheme of the Industrial Disputes Act
does appear to contemplate that the machinery provided therein should be
set in motion, to settle only disputes which involve the rights of workmen as a
class and that a dispute touching the individual rights of a workman was not
intended to be the subject of an adjudication under the Act, when the same
has not been taken up by the union or a number of workmen.
Although the question did not arise directly, the Supreme Court in D N Banerjee v.
PR Mukherjee55 discussed the scope of 'industrial dispute' (in the context of individual
dispute) and observed that the words:

Convey the meaning to the ordinary mind that the dispute must be such as
would affect large groups of workmen and employers ranged on opposite
sides ... But at the same time, having regard to the modern conditions of
society where capital and labour have organized themselves into groups for
the purpose of fighting their disputes and settling them on the basis of the
theory that union is strength, and collective bargaining has come to stay, a
single employee's case might develop into an industrial dispute, when as often
happens, it is taken up by the trade union of which he is a member and there
is concerted demand by the employees for redress.
The aforesaid issue figured directly in Newspapers Ltd v. State Industrial Tribunal 56•
In this case, Tajammal Hussain, a linotypist was dismissed by the Newspapers Ltd on the
ground of incompetence. His case was neither taken up by the union of workers of the
establishment nor by any union of allied or similar trade. His case was, however, taken
up by the UP Working Journalists Union, with which the employee had no concern. The
government referred the dispute to the industrial tribunal for adjudication. The tribunal
ordered reinstatement. The appellate tribunal and the High Court, successively affirmed.
Thereupon, the management preferred an appeal to the Supreme Court. Justice Kapoor
who delivered the judgement for the Court made the following significant observation:

The case of respondent No. 3 was not taken up by union of the workers of the
appellant company nor by any of unions of workmen employed in similar or
allied trades but the UP Journalists Union, Lucknow, with which respondent
No. 3 had no connection, took the matter to the Conciliation Board, Allahabad.
The Court accordingly held that Tajammal Hussain could not be termed as workmen
(in the plural) nor could UP Working Journalists Union be called 'his union' nor is there
any indication that the individual dispute had been transformed into 'industrial dispute'.
Bombay Union of Journalists v. The Hindu, 57 however, has tried to further curtail the
scope of 'industrial dispute.' In this case, the dispute of the workman was taken up by the
Bombay Union of Journalists of which union the workman was a member. The Bombay
Union of Journalists was a union not of employees of one establishment but of employees

55 D N Banerjee v. PR Mukhejee, (1953) 1 LLJ 195 (SC).

56 Newspapers Ltd. v. State Industrial Tribunal, (1957) 2 LLJ 1 (SC).
57 Bombay Union of Journalists v. The Hindu, AIR 1963 SC 318.
 Concept and Scope of Individual and Industrial Disputes • 19 3

of the entire industry of journalism in Bombay. None of the employees of the Hindu were
its members. The industrial tribunal, on these facts, held that the dispute was merely an
'individual dispute' and not an 'industrial dispute'. The Supreme Court affirmed the decision.
Justice Shah who delivered the judgement for the Court observed:

The dispute, in the present case, is prima facie an 'individual dispute.' In order
that it may become an industrial dispute, it had to be established that it had
been taken up by the union of the employees of the 'The Hindu' Bombay or
by an appreciable number of employees of the 'The Hindu' Bombay.
Justice Shah rationalized his decision on the basis of an earlier decision of the Supreme
Court and observed:

In Workmen of Dimakuchi Tea Estate v. The Management of Dimakuchi Tea Estate,

this Court held by a majority that the two tests of an industrial dispute as
defined by Section 2(k) of the Industrial Disputes Act, 1947, must, therefore
be: (1) the dispute must be a real dispute capable of being settled by relief
given by one party to the other, and, (2) the person in respect of whom the
dispute is raised must be one in whose employment, non-employment, terms
of employment, or conditions of labour (as the case may be), the parties to the
dispute have a direct or substantial interest and this must depend on facts and
circumstances of each particular case. In that case, certain employees sought
to raise a dispute about a person who was not a workman. In the present
case, members of the union who were not workmen of the employer against
whom the dispute was sought to be raised, seek by supporting the dispute to
convert what is prima facie an individual dispute into an industrial dispute. The
principle that the persons who seek to support the cause of the workmen must
themselves be directly and substantially interested in the dispute, in our view,
applies to this class of cases also: persons who are not employees of the same
employer cannot be regarded as so interested, that by their support they may
convert an individual dispute into an industrial dispute. The mere support to
his cause by the Bombay Union of Journalists cannot, therefore, assist the claim
of Salivateeswaran so as to convert it into an industrial dispute.
The aforesaid requirements resulted in curtailing the growth of industry-wide unions and
runs counter to the decision in Newspaper Ltd supra. However, the Supreme Court in Workmen
of Dharampal Prem Chand v. M/ s Dharampal Prem Chand58 relaxed the requirement that only
the union of the emplolees of the same employer against whom demands are made, can raise
an industrial dispute 5 • Thus the Court, by distinguishing process impliedly overruled the
decision in Bombay Union ofJournalists v. The Hindu supra. The firm dismissed its 18 workmen.

58 Workmen of Dharampal Prem Chand v. Mis Dharmpal Prem Chand, AIR 1966 SC 182.
59 Commenting on the principles laid down in Bombay Union of Journalists v. The Hindu, AIR 1963 SC
318, the Supreme Court in M/S Dharampal Prem Chand, op. cit. observed:
In our opinion, the observation (made in The Hindu) ... should not be read as laying down any hard
and fast rule in the matter. Take for instance, the case of an employer who employs 20 workmen,
and assume that these workmen have not formed any union. If the employer illegally dismisses all
the workmen employed by him, it cannot be suggested that the dispute raised by employees would
not become an industrial dispute because there was no union to support them and the dismissed
employees themselves cannot convert their individual dispute, op. cit., 182-86.
194 • Industrial Relations and Labour Laws

The Mercantile Employees Association (which was the employees' union) of which the
dismissed workmen were members took up the cause of these dismissed workmen. A
contention was raised that besides the 18 dismissed workmen, no other workman of the
employer was the member of the said association and as such the association was not
authorized to raise an industrial dispute. Rejecting the contention, the Supreme Court
observed:

... It is conceivable that the workmen of an establishment have no union of

their own, and some or all of them join the union of another establishment
belonging to the same industry. In such a case, if such a union takes up the
cause of the workmen working in an establishment which has no union of
its own, it would be unreasonable to hold that the dispute does not become
an industrial dispute because the union which sponsored it is not the union
exclusively of the workmen working in the establishment concerned ... In some
cases, the union of workmen working in the one industry may be competent
to raise a dispute about the wrongful dismissal of an employee engaged in
an establishment belonging to the same industry where workmen in such an
establishment have no union of their own and an appreciable number of such
workmen had joined such other union before their dismissal.
Earlier, the Court observed:

It is well known that in dealing with industrial disputes, industrial adjudication

is generally reluctant to lay down any hard and fast rule or adopt any test
of general or universal application. The approach of industrial adjudication
in dealing with industrial disputes had necessarily to be pragmatic, and the
tests which it applied and the considerations on which it relied would vary
from case to case and would not admit any rigid or inflexible formula ... The
object of trade union movement is to encourage the formation of larger and
bigger unions on healthy and proper trade union lines, and this object would
be frustrated if industrial adjudication were to adopt the rigid rule that before
any dispute about wrongful dismissal can be validly referred under Section 10
(1) of the Act, it should receive the support of the union consisting exclusively
of the workmen working in the establishment concerned.
The question again came up for consideration in Workmen of Indian Express Ltd v.
Management of Indian Express Ltd. 60 In this case, a question arose whether the cause of two
workmen in a particular establishment in an industry could be sponsored by Delhi Union
of Working Journalists, which was not a union of workmen of the establishment but a union
in similar or allied trade. Dealing with the contention, the Supreme Court observed:

... where the workmen of an establishment have no union of their own and
some or all of them have joined a union of another establishment belonging to
the same industry, if such a union takes up the cause of the workmen working
in an establishment which has no union of its own, the dispute would become
an industrial one if such a union can claim a representative character in a way
that its support would make the dispute an industrial dispute.

60 Workmen of Indian Express Ltd v. Management of Indian Express Ltd, (1970) 2 LLJ 132 (SC).
 Concept and Scope of Individual and Industrial Disputes • 19 5

Another principle laid down by the Supreme Court in M/s Western India Match Co. Ltd
v. Western India Match Company Workers' Union 61 is that the parties to the reference being
the employer and his employees, the test must necessarily be whether the dispute referred
to adjudication is one in which the workman and substantial section of those who have a
direct and substantial interest even though such a dispute relates to a single workman. The
Supreme Court held that an 'individual dispute' may be converted into an industrial dispute
by the workmen espousing it on the ground that they have community of interest and are
directly or substantially interested in the employment, non-employment or conditions of
work of the concerned workmen.
In JH Yadav v. MIS Forbes Gokak62 , the appellant who was employed by the respondent,
claimed promotion as a clerk. When this was not granted, the appellant raised an industrial
dispute. The tribunal held that in view of the evidence given by the general secretary and
the documents produced, it was clear that the appellant's cause had been espoused by the
union which was one of the unions of the respondent employer. On the merits, the tribunal
accepted the appellant's contentions that employees who were junior to him have been
promoted as clerks. The award of the industrial tribunal was challenged by the respondent
by way of a writ petition. A single judge dismissed the writ petition. The respondent being
aggrieved, filed a writ appeal before the High Court. The High Court, while construing
Section 2(k) of the Industrial Disputes Act, 1947, came to the conclusion that (i) an individual
dispute is not an industrial dispute unless it directly and substantially affects the interest
of other workmen, (ii) an individual dispute should be taken up by a union which has
representative character or by a substantial number of employees before it can be converted
into an industrial dispute neither of which had happened in the present case, (iii) there was
nothing on record to show that the appellant was a member of the union or that the dispute
has been espoused by the union by passing any resolution in that regard. On appeal, the
Supreme Court held that in the present case, it was not questioned that the appellant was a
member of the Gokak Mills Staff Union. Nor was any issue raised that the union was not of
the respondent establishment. The objection as noted in the issues framed by the industrial
tribunal was that the union was not the majority union. The Court in view of its earlier
decision in Dharam Pal's case, held that the objection was rightly rejected by the tribunal
and wrongly accepted by the High Court.
The aforesaid decisions indicate that individual dispute per se is not 'industrial dispute'
unless it is espoused by: (z) trade union or (iz) appreciable nwnber of workmen. It is, therefore,
necessary to examine the aforesaid requirement in details.
1. Requirement ofAppreciable Number: It has been seen that courts insist that in order
to convert an individual dispute into 'industrial dispute', the dispute must be espoused
by 'appreciable number' either of the entire labour force in the establishment or at least in
a particular section thereof to which the dispute relates. But courts at the same time have
admitted that the expression 'appreciable number' does not necessarily mean majority
of workmen in the establishment or, indeed, even in the section in which the aggrieved
workman was employed. But then, they have also declined to categorically delineate the
limits of that illusive requirement. Thus, the task of defining the expression has been left
for case to case determination.

61 M/s Western India Match Co. Ltd v. Western India Match Company Workers' Union, (1970) 2 LLJ 256
(SC).
62 2005 LLR314.
196 • Industrial Relations and Labour Laws

Thus in Workmen v. Mis Dharampal Prem Chand 63, out of 45 employees, 18 were
dismissed. There was no union of workmen. It was held that they could raise a dispute
by themselves. In Workmen of Indian Express Newspaper v. Management 64, 31 out of the
total 68 working journalists of the union in the establishment espousing the cause met the
requirement of 'appreciable number'. It was also held that even if the number of working
journalists was taken to be 131, the representation of 25 per cent could be an 'appreciable
number'. Similarly, in Workmen v. Rohtak General Transport Company65, five out of 22 workmen
sponsoring the union were held to be 'appreciable number'. But, in State ofPunjab v. Gondhara
Transport (P) Ltd66, espousal of dispute by five out of 60 workmen of the establishment was
held not to be an 'appreciable number.' From these decisions, it is evident that there is no
uniformity as to what amounts to 'appreciable number'.
2. Requirement of Dispute Being Sponsored by Trade Unions: Notwithstanding the
decision in Bombay Union of Journalists v. The Hindu 67 the Supreme Court has held that in
order to convert an individual dispute into 'industrial dispute', it must be taken up by a union
of workers of the establishment and where there is no such union, it may be sponsored by
any of the unions of workmen employed in similar or allied trades. 68 The union of the plant
may even be a minority union. 69 Further, the sponsoring union need not be a registered or
a recognized trade union.7°
The aforesaid principle was laid down in Newspapers Ltd v. UP State Industrial Tribunaz7 1
and State of Bombay v. Kripa Shankar Jaiswal. 72 In the former case, the cause of certain retrenched
workmen was espoused by an unregistered body known as Leader Press Karamchari Sangh.
The government referred the dispute to the industrial tribunal for adjudication. The tribunal
directed the employer to reinstate the said workmen. On dismissal of the writ petition, the
management filed an appeal wherein it was contended before the Supreme Court that the
association which sponsored the cause of the concerned workmen was an unregistered body
and, therefore, the reference was invalid. Rejecting the contention Justice Gajendragadkar,
speaking for the Court held, that 'it is not necessary that a registered body should sponsor a
workman's case to make it an industrial dispute. Once it is shown that a body of workmen,
either acting through their union or otherwise, had sponsored a workman's case, it becomes
an industrial dispute.'
In the latter case, the respondent was prosecuted under Section 29 for not carrying out
the terms of settlement arrived at, between him and Mankatha Distillery Panchayta Union.
The defence was that the union was neither a registered nor a recognized union. The Patna

63 Workmen v. Mis Dharampal Prem Chand, AIR 1966 SC 182.

64 Workmen of Indian Express Newspaper v. Management, 1970 2 LLJ 132, 137.
65 Workmen v. Rohtak General Transport Company, 1962 1 LLJ 634 (SC).
66 State of Punjab v. Gondhara Transport Co., AIR 1975 SC 53 1.
67 Bombay Union of Journalists v. The Hindu, AIR, 1963 SC 318. See also Deepak Puri v. Fifth Industrial
Tribunal, 1986 Lab. IC.
68 Newspapers Ltd v. State Industrial Tribunal, AIR 1960, SC 1328; Workmen of Dharampal Prem Chand v.
Mis Dharampal Prem Chand, AIR 1966 SC 182; Workmen of Indian Express Newspaper v. Management
(1970) 2 LLJ 132.
69 Associated Cement Co. v. Workmen, AIR 1970 SC 177; Pradip Lamp Works v. Workmen, (1970) 1 LLJ 507
(SC).
70 Newspapers Ltd v. UP State Industrial Tribunal, AIR 1960 SC 1328; State of Bombay v. Kripa Shankar
Jaiswal, AIR 1961 SC 304; Pradip Lamp Works v. Its Workmen, (1970) 1 LLJ 507.
71 Newspapers Ltd v. UP State Industrial Tribunal AIR 1960 SC 1328.
72 State of Bombay v. Kripa Shankar Jaiswal, AIR 1961 SC 304.
 Concept and Scope of Individual and Industrial Disputes • 197

High Court held that lack of registration or recognition of trade union incapacitated the union
from raising an industrial dispute, and consequently there could not be a valid settlement
arrived at in the course of conciliation proceedings. The respondent was accordingly
acquitted. The Supreme Court, however, took the contrary view:

It would be an erroneous view if it were said that for a dispute to constitute

an industrial dispute, it is a requisite condition that it should be sponsored
by a recognized union or that all the workmen of an industrial establishment
should be parties to it. A dispute becomes an industrial dispute even where it
is sponsored by a union which is not registered as in the instant case or where
the dispute raised is by some of the workmen because in either case, the matter
falls within Section 18 (3) (a) and 18 (d) of the Act.
The aforesaid view was reaffirmed in Pradip Lamp Works v. Its Workmen.7 3
From the aforesaid decision, it is evident that the sponsoring union may be (i)
unregistered (ii) unrecognized or (iii) minority. This view is valid because Trade Unions Act,
1926 does not provide either for compulsory registration of trade union or for recognition
of trade union. This view would require consideration when the provisions for compulsory
recognition of trade union would be incorporated under the Trade Unions Act.
There is yet another issue, namely, whether formal authorization of a trade union to
sponsor the cause of aggrieved workmen is necessary. The high courts are divided on the
issue whether the burden of proof lies upon the union to prove that it had the authority to
represent the cause of individual workmen so as to convert an individual dispute into an
industrial dispute. The Madras74, Andhra Pradesh75, Mysore 76, Calcutta77, Madras78, Patna,
Kerala and Bombay High Courts have taken the view that when a dispute of a workman or
workmen is espoused by a union and its authority is challenged by the employer, it must
be proved by the union concerned, by appropriate resolution being passed by the general
body of the union or otherwise that it had the authority to take up the cause of aggrieved
workmen. 79 On the other hand, the Punjab High Courttook the opposite view, namely, there
must be a presumption that when the union takes up the cause of the aggrieved workmen,
it has the support of the members of the union and then it is for the company to prove that
facts are otherwise and that the members of the union are not behind it in the action.
The Supreme Court in Bombay Union of Journalists v. The Hindu 80 seems to be inclined
to affirm the former view of majority of the high courts when it said that 'apart from the
statement that 225 members of the union requested its secretary to take up the cause of
Salivateeswaran, there was nothing to show that the union as such had passed any resolution
or authorized its secretary to take up Salivateeswaran's cause and to raise an industrial
dispute thereon'.

73 Pradip Lamp Works v. Its Workmen, (1970) 1 LLJ 507.

74 Kandan Textiles Ltd v. Industrial Tribunal, 875; Sri Ram Vilas Service Ltd v. State ofMadras (1956) 1 LLJ,
198; Murgan Transport v. Its Workers, (1960) 1 LLJ 349; Murugalli Estate v. Industrial Tribunal, (1964)
2 LLJ164.
75 Shri Kripa Printing Press v. Labour Court, (1960) 1 LLJ 53.
76 PM Murugappa Mudaliar Rathina Mudaliar & Sons v. Raji Mudaliar, (1965) 1 LLJ 489.
77 Deepok Industrial Ltd v. State of West Bengal, (1975) 1 LLJ 293 at 294-98.
78 Visalakshmi Mills Ltd v. Labour Court, (1962) 2 LLJ 93.
79 Hindustan Ltd v. Chief Commissioner, (1957) 2 LLJ 466.

so Bombay Union of Journalists v. The Hindu, AIR 1963 SC 318.

198 • Industrial Relations and Labour Laws

It is submitted that the Punjab High Court's view seems to be more convincing. To this
it may be added that the Court may well look into the constitution of the union to ascertain
whether the president/secretary had the authority to do what they have done.
It has also been held that the registration of trade union concerned under the Trade
Unions Act is not conclusive proof of its real existence or the authority to represent the
workmen on reference before the tribunal. Furthermore, negotiations by some officials of
the union with the workmen for conciliation by executing certain documents on behalf of
the workmen prior to the reference are no conclusive proof of the authority of the union to
represent the cause of aggrieved workmen. 81
3. Effect of Subsequent Withdrawal of Support by Workmen: It has now been settled
through the Supreme Court decision82 that subsequent withdrawal of support by the
workmen of a cause previously espoused by them would not take away the jurisdiction
of an industrial tribunal. Likewise, if the dispute was in its inception an individual
dispute and continued to be such till the date of reference by the government, it would
not be converted into an industrial dispute by support subsequent to the reference even
if workmen are interested in the dispute. This principle is also applicable in subsequent
withdrawal of the case by a union. Thus, it has been held that the dispute with regard to
the dismissal does not cease to be an industrial dispute after the union ceased to sponsor
his case because if there was an industrial dispute at the time of reference, it would not
cease to be one merely because the claim of some of the dismissed employees was settled
by mutual agreement. 83
4. Form of Espousal: The Supreme Court in JH Yadav v. MIS Forbes Gokak84 held that as
far as espousal is concerned, there is no particular form prescribed to effect such espousal.
But there is no doubt that the union must normally express itself in the form of a resolution
which should be proved if it is in issue. However, proof of support by the union may also
be available aliunde. It would depend upon the facts of each case.
5. Time for the Espousal of the Dispute: In Western India Match Co. v. Workers' Union 85,
the Supreme Court held that the test is whether the dispute referred to adjudication is one
in which the workmen or a substantial section of them have a direct and substantial interest
even though it relates to a single workman. Such an interest on the part of workman must
exist on the date of reference and not necessarily on the date on which the cause occurs, as
otherwise an individual dispute cannot become an industrial dispute.
6. Institution of Legal Proceedings by Legal Heir of Deceased Workman: In Smt.
Anjilamma v. Labour Court86, the Andhra Pradesh High Court held that the legal heirs of
deceased workmen have locus standi to pursue a dispute against dismissal of deceased
workmen either by continuing the pending proceedings or by instituting fresh proceedings.
7. Industrial Dispute Survives even aP,_er Death of Workman: The Supreme Court in
Rameshwar Manjihi v. Sangramgarh Colliery8 held that industrial dispute survives even after
the death of workmen and the maxim actio personalis moritur cum persona does not apply.

81 Deepak Industrial Ltd v. State of West Bengal, (1975) 1 LLJ 293 at 294-98.
82 Bombay Union of Journalists v. The Hindu, AIR 1963 SC 318.
83 Binny Ltd. v. Workmen, AIR 1972 SC 1975.
84 (2005) LLR314.
85 Western India Match Co. v. Workers Union, (1970) 2 LLJ 256 (SC).
86 (1995) Lab. IC 2784 (AP).
87 AIR 1994 SC 1176.
 Concept and Scope of Individual and Industrial Disputes • 199

Accordingly, the proceedings before the tribunal may be continued by the legal heir/
representative of the deceased workmen.
8. An Appraisal: A survey of the aforesaid decisions indicates that the following tests
have been applied by the Court in determining as to when an individual dispute would be
converted into an 'industrial dispute'.
(a) If the cause of aggrieved workmen is taken up by appreciable number of workmen or
the union of workmen (either registered or not or whether recognized or unrecognized
or whether majority or minority union) or in the absence of any union of workmen
by union of similar or allied trade and there is a concerted demand by the workmen
for redress.
(b) If the workmen espousing it have a community of interest and are directly or
substantially interested in the employment, non-employment, terms of employment
or conditions of labour of the concerned workman/workmen.
(c) If such an interest on the part of workman or substantial number of workmen exists
on the date of reference and need not necessarily exist on the date on which the cause
occurs.
(d) A dispute would not cease to be an 'industrial dispute' on subsequent support or
withdrawal of a cause of individual dispute previously espoused by a workmen or union.
The net effect of the aforesaid decisions is that an individual worker, unsupported
by 'appreciable number' of workmen or the union, has no remedy under the Industrial
Disputes Act, 1947, particularly when no dispute is pending before authorities under the
Industrial Disputes Act, 1947.

In the preceding section, it has been seen that before the introduction of Section 2A as a result
of judicial legislation, an individual workman who was discharged, dismissed, retrenched
or whose service was otherwise terminated or who had been transferred, suspended or was
subject to any other punishment, had no remedy under the Industrial Disputes Act, unless his
case was sponsored by his fellow workmen or by a trade union. In such a situation, he had
been left with no alternative but to approach the civil court and involve himself in lengthy
and expensive civil remedy. Section 2A of the Industrial Disputes (Amendment) Act, 1965
attempts to mitigate some of the hardships caused as a result of judicial pronouncements. 88
Section 2A came into force on 1 December 1965.
Section 2A provides: where an employer discharges, dismisses, retrenches or otherwise
terminates the services of an individual workman, any dispute or difference between an

88 In the Statement of Objects and Reasons of the Bill which resulted in the enactment of Section 2A
it was stated:
In construing the scope of industrial dispute, courts have taken the view that a dispute
between an employer and individual workman cannot per se be an industrial dispute but
it may become one if it is taken up by a union or a number of workmen making a common
cause with the aggrieved individual workman. In view of this, cases of individual dismissals
and discharges cannot be taken up for conciliation or arbitration or referred to adjudication
under the Industrial Disputes Act, unless they are sponsored by union or a number of
workmen. It is now proposed to make the machinery under the Act available in such cases.
200 • Industrial Relations and Labour Laws

individual 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.
The net effect of Section 2A is that by legislative action, such a dispute is deemed
to be an industrial dis~ute even where it is not espoused by a trade union or appreciable
number of workmen. 8 Thus, the result of insertion of Section 2A was that, what was not
an 'industrial dispute' as per the interpretation of the Supreme Court, would be deemed
to be an 'industrial dispute'. But there is a difference between an individual dispute which
is deemed to be an industrial dispute under Section 2A of the Industrial Disputes Act,
1947 on one hand and an industrial dispute espoused by the union in terms of Section 2(1)
of the said 1947 Act. An individual dispute which is deemed to be an industrial dispute
under Section 2A concerns discharge, dismissal, retrenchment or termination whereas an
industrial dispute under Section 2(k) covers a wider field. It includes even the question of
status. This aspect is relevant for the purposes of deciding this case90•
In Radhey Shyam v. State of Haryana 91 , it has been held after considering various
judgments of the Supreme Court that Section 2A contemplates nothing more than to
declare an individual dispute to be an industrial dispute. It does not amend the definition
of industrial dispute set out in Section 2(k) of the Industrial Disputes Act, 1947.
Section 2A does not cover every type of dispute between an individual workman
and his employer. Section 2A enables the individual worker to raise an industrial dispute,
notwithstanding that no other workmen or union is a party to the dispute. It applies only
to disputes relating to discharge, dismissal, retrenchment or termination of service of an
individual workman. It does not cover other kinds of disputes such as bonus, wages, leave
facilities, etc.92 and does not apply in case of dispute arising from the transfer or promotion
or the refusal or failure to promote the employee or any punishment (excluding dismissal,
discharge, retrenchment or other termination of service) imposed on such employee or
dispute or difference as to money due to such employee from the employer or as to any
amount at which a benefit, which is capable of being computed in terms of money, is to be
computed. Thus, in cases not covered by Section 2A, the principle laid down by the Supreme
Court as to when individual dispute becomes 'industrial dispute' is still applicable and
thereby causes hardship to the individual workman. This is not a very happy situation. It
is, therefore, necessary that the scope of the application of Section 2A should be enlarged
so as to include certain other causes stated above within its purview. It may be relevant
to note that Section 2 (15) of the Industrial Relations Bill, 1978, which defines 'individual
dispute', has widened the coverage of 'individual dispute', by bringing within its ambit
additional causes of dispute relating to transfer, promotion and computation of money due.
However, the Bill, we have stated elsewhere, lapsed after the dissolution of the Parliament.
The aforesaid section raised four important issues:
(i) What is the significance of the word 'deemed' in Section 2A?
(iz) What is the significance of the expression' connected with or arising out of' in Section
2A?

89 Rustaom and Hornsby (P) Ltd v. TB Kadam, (1975) 2 LLJ 352 at 355 (SC).
90 Bharat Heavy Electricals Ltd v. Anil and others, 2007 LLR 201.
91 (1998) 2 LLJ 1217.
92 2007 LLR 201.
 Concept and Scope of Individual and Industrial Disputes • 201

(iii) Is Section 2A a constitutionally valid provision?

(iv) Can a retrospective effect be given to Section 2A?
These questions have been the subject matter of judicial controversy.
1. Significance of the Word 'Deemed': It has now been established through the Supreme
Court decision in Chemicals and Fibres of India Ltd v. D S Bhoir 93 and Rustom and Hornsby
(P) Ltd v. TB Kadam that 'Section 2A is, in effect, a definition section. It provides, in effect
that what would not be an industrial dispute' as defined in Section 2(k) and as interpreted
by the Supreme Court as to what would be deemed to be an 'industrial dispute' in certain
specified cases. The Court further said that the definition could as well have made part of
clause (k) of Section 2 instead of being put as a separate section.
2. Scope of the Expression 'Connected with, or Arising out of Discharge, Dismissal,
Retrenchment or Termination': Section 2A is not limited to bare discharge dismissal,
retrenchment or termination of the service of an individual workman but any dispute
or difference between the workmen and his employer 'connected with' or arising out
of discharge, dismissal, retrenchment or termination will be deemed to be an industrial
dispute,94 A thing is said to arise out of another when there is close nexus between the two
and one thing flows out of another as a consequence. 95
In JN K Pradhan v. Industrial Tribunal, the Court was called upon to decide whether
the claim for gratuity was connected with or arose out of discharge, dismissal, retrenchment
or termination of service. The Court, however, observed that whether he would be entitled
for gratuity under the Orissa Shops and Commercial Establishment Act is not for us to
decide at this stage. This is a matter for the tribunal to determine on examining the merits
of the dispute.
3. Constitutionality of Section 2A: After the insertion of Section 2A in the Industrial
Disputes Act, 1947, through 1965 Amendment, the management challenged the
constitutional validity of the section. They argued that (z) the Parliament had no power to
convert an 'individual dispute' into an 'industrial dispute', (ii) the 1965 Amendment by
which Section 2A was inserted was repugnant to the legislative scheme of the IDA and
(iii) Section 2A should be struck down as it was violative of Article 14 of the Constitution.
While Delhi,96 Punjab and Haryana,97 Madras98 and Mysore High Courts99 upheld the
constitutionality of Section 2A, Calcutta High Court100 declared the provision to be ultra
vires the Constitution. The obiter of the Supreme Court101 decision, however, indicates that
it upheld the validity of Section 2A. Let us now turn to examine the judicial approach to
this issue.

93 Chemicals and Fibres of India Ltd. v. D S Bhoir, (1975) 2LLJ 168 (SC).
94 JN L Pradhan v. Industrial Tribunal, (1977) 1 LLJ 36 (Orissa).
95 Machinnon Machenzie and Co. v. L M Lassk, (1970) 1 LLJ 16 (SC).
96 Toshniwal Brothers (Pvt.) Ltd v. Labour Court, (1969) FJR 19 352. Fedders Lloyd Corporation (P) Ltd v.

Lt Governor, Delhi, (1970). Lab. IC 421 (Delhi).

97 Atlas Cycle Industries v. P V Thukral (1971) Lab. IC203, 205 (Punjab and Haryana).
98 TVS Iyengar and Sons (P) Ltd v. State of Madras, (1970) Lab. IC 203 (Madras).
99 P Janardhana Shetty v. Union of India, (1970) 2 LLJ 738 (Mysore).
100 Jute and Jute Goods Buffer Stock Association v. Second Industrial Tribunal, Matter No. 654 of 1970 decided

by the Calcutta High Court on 28 July, 1971.

101 Rustom and Hornsby (P) Ltd v. TB Kadam, (1975) 2 LLJ 352.
202 • Industrial Relations and Labour Laws

4. No Retrospective Effect: The Supreme Court in Rustom and Hornsby (P) Ltd v. TB
Kadam 102 held that Section 2A provides in effect that what would not be an industrial dispute
as defined in Section 2(k) as interpreted by this Court could be deemed to be an industrial
dispute in certain circumstances. There is, therefore, no question of giving retrospective effect
to that section in making the reference which resulted in the award under consideration.
When the section uses words where any employer discharges, dismisses, retrenches or
otherwise terminates the services of an individual workman, it does not deal with the
question as to when that was done.
The Court therefore ruled that if 'there was an industrial dispute or an industrial
dispute was apprehended, even though the facts giving rise to that dispute might have
arisen before the reference was made, the reference would still be valid.'

In Abdul Khalil St. Bharu v. Commission of Labour, Nagpur,103 a workman was dismissed after a
deparbnental inquiry on 5 February 1986. The first and second appeals dated 19 December 86
and 9 January 1988 respectively were dismissed. An application was made under Section 2A
on 29 August 1989. It was communicated to the applicant that as the application was made
after two and a half years, hence closed on 16 October 1988. A writ petition was filed in 1990
in the High Court of Bombay. The Court held that (z) there is no time limit prescribed under
Section 2A or section 12, (iz) the application cannot be said to be stale or grossly belated, (iii)
closing of the proceedings cannot be sustained and (iv) conciliation officer is duty bound
under Section 12 to proceed for the purpose of bringing settlement and if his efforts fail,
then he is required to submit failure report.

The [Second] National Commission on Labour has recommended that all matters pertaining
to individual workers, be it termination of employment or transfer or any other matter be
determined by recourse to the grievance redressal committee, conciliation and arbitration/
adjudication by the labour court. Section 2A of the Industrial Disputes Act, 1947 may be
amended. Individual disputes may be taken up by the affected workers themselves or by
TU's and the collective disputes by the negotiating agent or an authorized representative
of the negotiating college for resolution. A union which does not have at least 10 per cent
members amongst the employees in an establishment should have no locus standi in that
establishment. A union which has at least 10 per cent members amongst the employees in
a unit should only have the right to represent individual workers in various matters such
as conciliation, arbitration or adjudication and a provision in this regard may be made in
Section 36 of the Industrial Disputes Act. The appropriate government may also approach the
Labour Relations Commission on any individual or collective dispute in any establishment.
All disputes, claims or complaints under the law on labour relations should be raised within
one year of the occurrence of the cause of action.

102 Rustom
and Hornsby (P) Ltd v. TB Kadam, (1975) 2 LLJ 352.
103 1997 Lab.
IC 122 (Born); see also M/s John and Mani Agencies v. Labour Court Madras, (1991) Lab. IC
306 (Madras).
 Concept and Scope of Individual and Industrial Disputes • 203

As observed in previous editions of this book and even in the first edition (1984), even
assuming that the scope of Section 2A (prior to 2010) is adequate, it did not confer any
right on the individual workman to raise disputes connected with discharge, dismissal,
retrenchment or otherwise termination of service. The Act, however, conferred such
rights upon the appropriate government alone and in the exercise of this discretion, the
appropriate government may or may not refer such a dispute for adjudication. This power
was likely to be abused. In view of this, it was felt that aggrieved individual workman as
in case of Section 33A should be allowed to move directly to the labour court, tribunal or
national tribunal.
Our view is fortified by the view expressed by the Supreme Court which emphasized
the need to amend Section 2A making it possible for an individual workman to seek redress
in an appropriate forum regarding illegal termination of service which may take the form
of dismissal, discharge, retrenchment, etc., or modification of punishment imposed in
domestic inquiry. An amendment of the Central Act introducing such provisions will make
the law simpler and will also reduce the delay in adjudication of industrial disputes104• This,
along with the recommendations of the Second National Commission on Labour, led to the
amendment of Section 2A in 2010.

The Industrial Disputes (Amendment) Act, 2010 105 has inserted new clauses (2) and (3) in
Section 2A which are as follows:
'(2) Notwithstanding anything contained in section 10, any such workman as is
specified in sub-section (1) may make an application direct to the labour court or
tribunal for adjudication of the dispute referred to therein after the expiry of 45 days
from the date he has made the application to the conciliation officer of the appropriate
government for conciliation of the dispute, and in receipt of such application the labour
court or tribunal shall have powers and jurisdiction to adjudicate upon the dispute, as
if it were a dispute referred to it by the appropriate government in accordance with
the provisions of this Act and all the provisions of this Act shall apply in relation to
such adjudication as they apply in relation to an industrial dispute referred to it by
the appropriate government.
(3) The application referred to in sub-section (2) shall be made to the labour court or
tribunal before the expiry of 3 years from the date of discharge, dismissal, retrenchment
or otherwise termination of service as specified in sub-section (1).'
An analysis of the aforesaid amended provision reveals that a workman aggrieved
by the order of dismissal, discharge, retrenchment or otherwise termination of service may
directly make an application to the labour court or tribunal for adjudication of the dispute
and the aforesaid labour court/ tribunal is empowered to adjudicate such dispute as it were

104 Krishna Distt Cooperative Marketing Society Ltd v. NV Purnachandra Rao, (1987) Lab. IC 1651 (SC).
105 It came into force with effect from 19 August 2010.
204 • Industrial Relations and Labour Laws

referred to it by the appropriate government. But, the two conditions must be satisfied before
such application can be entertained: (i) Such application must be made after the expiry of 45
days from the date the aggrieved workman made the application to the conciliation officer
of the appropriate government for conciliation of the dispute (ii) Such application must be
made before the expiry of 3 years from the date of discharge, dismissal, retrenchment or
otherwise termination of service.
Arena of Interaction
and Participants in
Industrial Disputes 15
Section 2 G) of the Industrial Disputes Act, 1947 defines 'industry' to mean: any business,
trade, undertaking, manufacture or calling of employers.
It also specifically states that the expression 'industry' includes: any calling, service,
employment, handicraft, or industrial occupation or avocation of workmen. The aforesaid
words are of wide import and transgress the popular meaning of the word. 1

A. Municipalities and Municipal Corporations

The Supreme Court was called upon to interpret the word 'industry' for the first time in
D N Banerji v. PR Mukherjee2 (hereinafter referred to as Budge Budge Municipality case). A
head clerk and a sanitary inspector of the Budge Budge Municipality were dismissed on
certain charges by the municipality. The dispute relating to the validity of dismissal was
referred by state of West Bengal to the industrial tribunal for adjudication, which directed
the reinstatement of those persons. Against this order, the municipality filed a writ petition
under Articles 226 and 227 of the Constitution before the Calcutta High Court, but the
petition was dismissed. Aggrieved by this order, the municipality filed an appeal before
the Supreme Court. Two questions were raised before the Court: (i) that there being no
industrial dispute, the reference to the tribunal was bad, and (ii) that the Industrial Disputes
Act was not applicable to the municipality as it was not an industry. While dealing with
these questions, Justice Chandersekhara Aiyar observed:

It is obvious thatthe limited concept of what an industry meant in early times must
now yield place to enormously wider concept so as to take in various and varied
forms of industry, though the word 'undertaking' in the definition of 'industry'

1 This was recognized in Corporation of City ofNagpur v. Its Employees, (1960) 1 LLJ 523 (SC) and State
of Bombay v. Hospital Mazdoor Sabha, (1960) LLJ 251 (SC).
2 D N Banerji v. PR Mukherjee, (1953) 1 LLJ 195.
206 • Industrial Relations and Labour Laws

is wedged in between business and trade on the one hand and manufacture on
the other and though therefore it might mean only a business or trade, still it
must be remembered that if there were so, there was no need to use the word
separately from business or trade. The wider importis attracted even more clearly
when we look at the latter part of the definition which refers to 'calling, service,
employment, or industrial occupation or avocation of workmen'. Undertaking
in the first part of the definition and industrial occupation or avocation in the
second part 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 venture.
The Court in the course of its judgement referred to the following observations made
by Justice Isaecs and Justice Rich, in Federated Municipal and Shire Council Employees' Union
of Australia v. Lord Mayor, Alderman, Councillors and Citizens of the Melbourne Corporation:3

Industrial disputes occur when, in relation to operations in which capital and

labour are contributed in cooperation for the satisfaction of human wants and
desires, those engaged in cooperation dispute as to the basis to be observed,
by the parties engaged, respecting either in share of the product or any other
terms and conditions of their cooperation.
The Supreme Court accordingly dismissed the appeal filed by the municipality.
The aforesaid decision was followed in Baroda Borough Municipality v. Its Workmen. 4
The employees working in the electricity deparbnent of the municipality demanded,
inter alia, bonus which was refused by the management. On reference of the dispute by
the appropriate government, the tribunal held that employees were not entitled to bonus
because the municipality was not a profit-oriented concern. On appeal, the labour appellate
tribunal reversed the decision of the tribunal on the ground that the municipality was an
'industry'. Aggrieved by this finding, the municipality filed an appeal to the Supreme Court.
The Court following the decision in D N Banerjee v. PR Mukherjee affirmed the findings of
labour appellate tribunal and held that the undertaking was an 'industry' and that could
be regarded as analogous to the carrying on of a trade or business.
This was followed by Corporation ofCity ofNagpur v. Its Employees 5 in which the Supreme
Court emphasized the inclusive character of the definition of 'industry'. It drew a distinction
between (a) regal and (b) municipal function of the corporation, the latter being 'analogous
to business or trade'. In this case, a dispute arose between the corporation and its employees
regarding wage scale, etc. The government of Madhya Pradesh referred the dispute under
Section 39 of the C.P. and Brar Industrial Disputes Settlement Act, 1947 to the state industrial
court. The corporation questioned the jurisdiction of the industrial court, inter alia, on the
ground that the corporation was not an industry but the tribunal overruled the objection
and held that the corporation was an 'industry' and that the further question whether any
deparbnent of the corporation was industry or not, would be decided on evidence. The

3 Federated Municipal and Shire Council Employees' Union ofAustralia v. Lord Mayor, Alderman, Councillors
and Citizens of the Melbourne Corporation, 26 CLR, 5008, 554-555.
4 Baroda Borough Municipality v. Its Workmen, AIR 1957 SC 110.
5 Corporation of City ofNagpur v. Its Employees, (1960) 1 LLJ 523. The judgement was delivered by the
same bench which decided Hospital Mazdoor Sabha case.
 Arena of Interaction and Participants in Industrial Disputes • 207

corporation, after unsuccessfully moving the Bombay High Court on a writ petition under
Article 226, appealed to the Supreme Court. The Supreme Court was called upon to decide
whether and to what extent various activities carried on by the corporation of the city of Nagpur
were 'industry' within the meaning of Section 2 (4) of Central Province and Brar Industrial
Disputes Settlement Act, 1947.6 The Court swnmed up its conclusions in the following words:

(1) The definition of 'industry' in the Act is very comprehensive. It is in two

parts: one part defines it from the standpoint of the employer and the other
from the standpoint of the employee. If an activity falls under either part of
the definition, it will be an industry within the meaning of the Act. (2) The
history of industrial disputes and legislation recognizes the basic concept that
the activity shall be an organized one and not that which pertains to private
or personal employment. (3) The regal functions described as primary and
inalienable functions of State though statutorily delegated to a corporation are
necessarily excluded from the purview of the definition. Such regal functions
shall be confined to legislative power, administration of law and judicial
power. (4) If a service rendered by an individual or a private person would
be an industry, it would equally be an industry in the hands of a corporation.
(5) If a service rendered by a corporation is an industry, the employees in the
deparbnents connected with that service whether financial, administrative or
executive, would be entitled to the benefits of the Act. (6) If a deparbnent of a
municipality discharges many functions, some pertaining to industry as defined
in the Act and other non-industrial activities, the predominant functions of the
deparbnent shall be the criterion for the purposes of the Act.
The Court also ruled that neither invesbnent of capital nor profit motive was sine qua
non for determining whether an activity was an 'industry' or not.
The Court accordingly held that several deparbnents of a municipal corporation,
namely: (i) tax deparbnent, (ii) fire brigade deparbnent, (iii) public conveyance deparbnent,
(iv) lighting deparbnent, (v) water works deparbnent, (vz) city engineering deparbnent,
(vii) enforcement (encroachment) deparbnent, (viii) sewerage deparbnent, (ix) public
gardens deparbnent, (x) public works deparbnent, (xi) assessment deparbnent, (xii) estate
deparbnent, (xiii) education deparbnent, (xiv) printing press deparbnent, (xv) building
deparbnent and (xvi) general administration deparbnent were not discharging sovereign
or regal function and were, therefore, included within the definition of industry.
The Court, however, held that deparbnents pertaining to (i) assessment and levy of
house tax, (ii) assessment and levy of octroi, (iii) removal of encroachment and pulling down
of dilapidated houses, (iv) maintenance of cattle ponds and (v) prevention and control of
food adulteration were outside the purview of Section 2 (4).
The decision in this case and also in D N Banerjee v. PR Mukherjee (supra) found the
approval of the seven-judges bench of the Supreme Court in Bangalore Water Supply and
Sewerage Board v. Rajappa7• This view was re-affirmed in Samishta Dube v. City Board, Etawah, 8
(I). The Court held that the general administration deparbnent was an 'industry'.

6 The definition in this Act was similar to the definition of 'industry' under Section 2 G).
7 AIR 1978 SC 54.
8 1991(1) SCALE 655.
208 • Industrial Relations and Labour Laws

Even though it is well established in a catena of cases decided by the Supreme Court
that municipality is an industry under 2G) of the Industrial Disputes Act, 1947, yet an attempt
was made in Parmanand v. Nagar Palika, Dehradun 9 to reopen the position and re-examine the
decisions of the Supreme Court in view of inclusion of municipalities in the Constitution. It
was urged that municipality should not be held to be an industry under Section 2G) of the
Industrial Disputes Act, 1947 after (z) it became creature of the Constitution (ii) it has been
elevated to the status of State and (iii) it is carrying on certain governmental functions. The
Court rejected the contention by holding that inclusion of municipalities in the Constitution
by itself would not dilute the effect of its decision in Corpn. of theCityofNagpurv. Employees
and Bangalore Water Supply and Sewerage Board v. A Rajappa wherein the Supreme Court held
that municipality is an industry under the Industrial Disputes Act.

B. Hospitals and Pharmacies

We now come to State of Bombay v. Hospital Mazdoor Sabha 10 which constitutes a landmark
in labour law. In this case, the Supreme Court not only declined to adopt the expression
'analogous to carrying out of a trade or business', but coined a new expression' systematically'
organized in a business or trade like manner. In this case, J J Group of Hospitals run by
the State of Bombay retrenched two of its ward servants. Against this order, the aggrieved
workers moved the Bombay High Court for the issuance of writ of mandamus directing
their reinstatement. The management, i.e., the State of Bombay contended that the hospital
being not an 'industry', the Industrial Disputes Act, 1947 was not applicable. The Bombay
High Court held that the hospital was an 'industry'. Aggrieved by this finding, the State
of Bombay filed an appeal before the Supreme Court. One of the main issues before the
Supreme Court was whether in running the hospitals, the State was carrying on an activity
of an 'industry'. The Court answered it in the affirmative and observed:

We have yet to decide which are the attributes whose presence makes an
activity an undertaking within Section G), on the ground that it is analogous
to trade or business. It is difficult to state these possible attributes definitely
or exhaustively as a working principle but it may be stated that 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.
Such an activity generally involves the cooperation of the employer and the
employees and its object is the satisfaction of material human needs. It must
be organized or arranged in manner in which trade or business is generally
organized or arranged. It must not be casual nor must it be for oneself nor
for pleasure. Thus, the manner in which the activity in question is organized
or arranged, the condition of the cooperation between employer and the
employee necessary for its success and its object to render material service to
the community can be regarded as some of the features which are distinctive
of activities to which Section 2 G) applies. Judged by this test, there would be
no difficulty in holding that the State is carrying on an undertaking when it
runs the group of hospitals in question.

9 (2003) 9 sec 290.

10 State of Bombay v. Hospital Mazdoor Sabha, (1960) 1 LLJ 251 (SC).
 Arena of Interaction and Participants in Industrial Disputes • 209

However, a lar?er bench of the Supreme Court in Management of Safdarjang Hospital

v. Kuldip Singh Sethi 1 disapproved of the aforesaid decision, by holding that a hospital
which was run and administered by the government was a part of its sovereign functions
and it was outside the scope of 'industry' and thereby unduly curtailed the scope of the
term 'industry'.
In this case, three appeals were heard together. In the first appeal, a dispute arose
between the management of Safdarjang Hospital-a government owned and run hospital
and its employees for the computation of amount of salary due to workers consequent upon
change in the grade. Thereupon, the employees made an application to the labour court
under Section 33 C (2) of the Industrial Disputes Act for the recovery of money due from
the employer. The labour court directed the hospital to pay the money due to them. It is
against this finding of the labour court that an appeal was filed.
In the second appeal, a dispute arose between the Tuberculosis Association of India (a
research and training institution) and its employees relating to pay scales and other facilities
of the employees. The government referred the dispute to the tribunal. The tribunal held that
'neither the research carried out nor the training imparted nor the existence of Tuberculosis
Association of India with which the hospital is affiliated, makes any difference and the
hospital is an industry within the meaning of the Act.' Against this order, the appeal was
filed to the Supreme Court.
In the third appeal, the management of Kurji Holy Family Hospital, Patna (a wholly
charitable hospital maintaining some paid beds) took disciplinary action against two of its
employees. The dispute was referred by the state of Bihar to the labour court under Section
10 of the Act. The management raised the preliminary objection that they were not engaged
in 'industry' and consequently, labour court had no jurisdiction. Against this, a writ petition
was filed to the Patna High Court which held that it was an 'industry'. It was against this
decision that an appeal was filed to the Supreme Court.
The common question involved in all the three appeals was whether the activities
carried on by these hospitals were 'industry'? The Court formulated the following test to
determine whether or not an activity is an 'industry':
(i) It is not necessary to view the definition in two parts. The definition read as a whole
denotes a collective enterprise in which employers and employees are associated.
It does not exist either by the employers alone or by employees alone. It exists only
when there is a relationship between employers and employees, the former engaged
in business, trade, undertaking, manufacture or calling of employers and the latter
engaged in any calling, service, employment, handicraft, or industrial occupation or
avocation.
(iz) The word 'industry' (in the definition of 'workmen') must take its colour from the
definition of industry and discloses that a workman is to be regarded as one employed
in an 'industry' if he is following one of the vocations mentioned in conjunction with
his employers.
(iii) In the collocation of the terms and their definitions, these terms have a definite economic
content of a particular type and on the authorities of this Court have been uniformly
accepted as excluding professions and are only concerned with the production,
distribution and consumption of wealth and the production and availability of material

11 Management of Safdarjang Hospital v. Kuldip Singh Seth, AIR 1970 SC 1407.

21 o • Industrial Relations and Labour Laws

services. Industry has thus been accepted to mean only trade, business, manufacture,
or undertaking analogous to trade or business for the production of material goods
or wealth and material services.
(iv) Material services are not services which depend wholly or largely upon the contribution
of professional knowledge, skill or dexterity for the production of result. Such services
are services no doubt but not material services. Material services involve an activity
carried on through cooperation between employers and employees to provide the
community with the use of something such as electric power, water, transportation,
mail delivery and the emphasis is upon the productivity of a service organized as
an industry and commercially valuable. It is the commercial character of the activity
and the production of something of benefit to particular individuals rendered by all
services which is described as the production of material services.
In the light of aforesaid test, the court concluded that the Hospital Mazdoor Sabha
wrongly held: (i) that 'the second part of the definition contained an extension of the first
part by including other items of industry' (iz) that economic activity was not an essential
part of the concept of industry (iii) that an economic activity could not exist without the
presence of capital or profit-making or both (iv) that the test namely, 'can such activity be
carried on by private individuals or group of individuals' applied to the facts of the case.
The aforesaid principle was reiterated in Management of Hospital, Orissa v. Their
Workmen. 12 In this case, a dispute arose regarding the conditions of service of employees
employed in hospitals, sanatorium and infectious wards owned and run by the government.
The government of Orissa made three references to the tribunal for adjudication. The tribunal
in all three cases held that the activities of the hospitals, sanatorium and infectious wards
were 'industry'. Against this finding, the management of the hospitals preferred an appeal
before the Supreme Court. The question arose whether the aforesaid activities run by the
government were 'industry'. The Supreme Court, following the decision in Safdarjang Hospital
case held that the aforesaid activities were not 'industry' because it was being run as a part
of the functions of the government and were being run as a deparbnent. It further held
that the 'mere fact that payment was accepted in respect of some beds ... could not... (lead)
to the inference that the hospitals (were) run as a business in a commercial way. Primarily,
the hospitals (were) meant as free service by the government to the patient, without any
profit motive.'
The principle enunciated in Safdarjang Hospital supra was once again followed and
applied by the Supreme Court in Dhanrajgiri Hospital v. Workmen. 13 The hospital run by a
charitable trust was engaged in imparting training in general nursing and midwifery. There
were good number of trainees in general nursing and midwifery. There were also good
number of trainee beds in the hospital meant for their practical training. The hospital was
not distinct or separate from training nurses. The patients were charged according to their
financial conditions and there was no regular charge fixed for a patient. On these facts, the
Supreme Court held that the hospital was not engaged in any 'industry' under the IDA.
The law laid down in the aforesaid decision is no longer applicable in view of the
Supreme Court decision in Bangalore Water Supply and Sewerage Board case wherein the Court
overruled these decisions and rehabilitated Hospital Mazdoor Sabha case.

12 Management of Hospital, Orissa v. Their Workmen, (1971) Lab. IC 835 (SC).

13 Dhanrajgiri Hospital v. Workmen, (1975) 2 LLJ 409 (SC).
 Arena of Interaction and Participants in Industrial Disputes • 211

C. Agricultural Operation
In Hari Nagar Cane Farm v. State ofBihar,14 a question arose whether the agricultural operation
carried on by the two companies constituted an 'industry'. Both the companies were not only
involved in agricultural operation, but were also registered under the Indian Companies Act.
While the former was formed to produce sugarcane, wheat, paddy and other articles for sale,
the latter was involved in the production of sugar for its own consumption. On a dispute
having arisen between the workers and companies, the state of Bihar made a reference to
the industrial tribunal. The companies questioned the jurisdiction of state of Bihar to make a
reference in a writ petition under Article 226 of the Constitution before the Patna High Court on
the ground that the agricultural operation carried on by them did not constitute an 'industry'.
The High Court dismissed the petition and held that the activity carried on by them was an
'industry' and therefore, the reference was valid. It is againstthis order of the High Court that
the companies filed an appeal to the Supreme Court. The Court on the facts held that 'when a
company if formed for the purpose of carrying on an agricultural operation, it was carrying
on trade or business' under Section 2G). The Court, however, declined to decide the larger
issue as to whether all agricultural operations connected with it were included in 'industry'.
In Bangalore Water Supply and Sewerage Board v. Rajappa 15, the seven-judges bench of the
Supreme Court appears to have re-affirmed the principles laid down in Hari Nagar Cane
Sugar Farm case. From the Bangalore decision it is evident that the Supreme Court is inclined
to treat organized agricultural operation with the cooperation of capital and labour for the
production and distribution of goods and services calculated to satisfy human wants and
wishes to be an 'industry'. But, the small and unorganized agricultural operations have
been excluded from the purview of the Industrial Disputes Act, 1947.

D. Agriculture Produce Market Committee

In Agriculture Produce Market Committee v. Ashok Harikuni, 16 the Supreme Court was called
upon to determine whether the Agriculture Produce Market Committee was exercising
sovereign function in order to exclude it from the purview of 'industry' under the Industrial
Disputes Act, 1947. The Court observed that even if a statute confers on any statutory body,
any function which could be construed to be 'sovereign' in nature that, would not mean
every other function under the same statue to be also sovereign. The Court should examine
the statute to sever one from other by comprehensively examining various provisions of that
statute. In interpreting any statute to find if it is 'industry' or not, the Court has to find its pith
and substance. The Industrial Disputes Act, 1947 is enacted to maintain harmony between
employer and employee which brings peace and amity in its functioning. This peace and amity
should be the objective in the functioning of all enterprises. This is to the benefit of both the
employer and employee. Misuse of rights and obligations by either or stretching it beyond
permissible limits have to be dealt with within the framework of the law but endeavour should
not be, in all circumstances, to exclude any enterprise from its ambit. That is why courts have
been defining 'industry' in the widest permissible limits and 'sovereign' functioning within
its limited orbit. It has been held that the Agriculture Produce Market Committee is trading
in agriculture produce and is an 'industry' under the Industrial Disputes Act.

14 AIR 1978 SC 548.

15 AIR 1978 SC 548.
16 AIR 2000 SC 3116: (2000) 2 LLJ 1382.
212 • Industrial Relations and Labour Laws

E. Professional Activities
Are the professional activities like solicitors' firms, architects' offices, medical polyclinics
and surgeries, firms of chartered accountants, etc., industries under Section 2 G)? This
question formed the subject matter of controversy. In National Union of Commercial Employees
v. MR Mehar 17, certain employees, namely, clerks, typists, stenographers, accountants
and menial servants of a solicitor firm M/s Peeira Fazalbhoy and Co. demanded bonus. The
management rejected the demand. Thereupon the state of Bombay referred the dispute
to the industrial tribunal for adjudication. The management successfully questioned the
jurisdiction of the tribunal on the ground that the firm was not an 'industry'. Thereupon,
the employees, after unsuccessfully moving the High Court for the issuance of appropriate
writ under Articles 226 and 227 of the Constitution, appealed to the Supreme Court. The
question arose whether the solicitor firm was carrying on as 'industry'? The Court held that
the firm was only a 'liberal profession' like that of attorney and was not an 'industry' because
(i) there was no 'direct or immediate' cooperation, between solicitor and his employees to
the professional service which the solicitor rendered to his client and (ii) services rendered
by a person involved in a liberal profession required special or peculiar intellectual and
educational equipment18 and were not 'material'.
The aforesaid principle was extended and applied in relation to employees employed
in a bar association canteen in Bar Association Canteen v. Chief Commissioner, Delhi. 19 In this
case, the association ran a canteen on no profit, no loss basis, for the benefit of its members
and their guests. A dispute arose between the management of the bar association and the
employees employed in the canteen regarding terms of employment. On reference, the
tribunal held that the activity was covered under 'industry'. Against this finding, a writ
petition was preferred in the Punjab High Court. The High Court held that the activity
of the members of the bar association in rendering advice to the client and appearing for
them in cases were not 'industry'. Extending it a little further, the Court added that if the
bar association employed workmen for supplying drinking water or assisting the members
in taking out books from the book-racks, the dispute between such workmen and the bar
association was not an industrial dispute20• Extending it again, the Court added that the
activity in serving the food or snacks to the guest was merely incidental and was, therefore,
not an 'industry'.21
The aforesaid decision was overruled in Bangalore Water Supply and Sewerage Board
case. The Court disapproved the view because in its view, a solicitor's firm or a lawyer's
firm becomes successful not merely by the talent of a single lawyer but by the cooperative
operations of several specialists, juniors and seniors. Likewise, the ancillary services of
competent stenographers, para-legal supportive services are equally important, the same
test is applied to other professions. The conclusion is inevitable that in the success of the
institution, every professional unit has an institutional goodwill and reputation, it comes
not merely from the professional or specialist but from all those whose excellence in their
respective parts makes for the total proficiency.

17 National Union of Commercial Employees v. MR Mehar, AIR 1962 SC 1080.

18 Id. at 1085.
19 Bar Association Canteen v. Chief Commissioner, Delhi, (1967) 2 LLJ 227 (Delhi).
20 Id. at 230.
21 Id. at 231.
 Arena of Interaction and Participants in Industrial Disputes • 213

F. Chartered Accountant's Firm

The high courts were divided on the issue whether a chartered accountant's firm was carryin£
on an 'industry'. The Calcutta High Court in Rabindranath Sen v. First Industrial Tribunal
and Alien Macgregor Smith Forgev. First Industrial Tribunal 23 held that chartered accountant's
firm auditing and making representation in courts in taxation and secretarial work with
the assistance of subordinate staff was an 'industry' because (i) there was cooperation of
labour and capital in the auditing work and (iz) it was organized in a business-like manner.
But in Ram Krishna Ayyar Vaidyanathan v. Fifth Industrial Tribunal 24, the Calcutta High Court
distinguished Rabindranath Sen and held that the chartered accountant's firm was not an
'industry' because there was (z) liberal profession, (iz) no essential cooperation between
the firm and audit clerks and (iii) no commodity produced by the firm. The High Courts
of Bombay,25 Kerala26 and Madras27 also held that a chartered accountant's firm was not
engaged in 'industry' because (i) it was a learned or liberal profession, (iz) there was no
capital invesbnent and (iii) there was no direct or essential cooperation.

G. Educational Institutions
We now turn to examine whether an educational institution is an 'industry'. In order to
examine this issue, it would be relevant to note that education is a mission and vocation,
rather than a profession or business.28
Corporation of City of Nagpur v. Its Employees 29 is our starting point. In this case, the
Supreme Court held that the educational institutions run by municipality/ corporation
was a service rendered by the deparbnent and so the subordinate menial employees of the
deparbnent came under the definition of 'workman' and were entitled to the benefits of the Act.
However, the pendulum swung back in curtailing the scope and coverage of 'industry'
in University of Delhi v. Ram Nath 30 where the University was plying buses for the convenience
of female students attending one of its constituent colleges since 1948. They had decided
in 1961 to discontinue the amenity from the next academic session, as it resulted in losses.
In pursuance of this decision, they terminated the service of two bus drivers on payment
of one month's salary in advance in lieu of notice. The drivers demanded retrenchment
compensation alleging that they were workmen. The university declined. Thereupon, they
filed an application to the labour court under Section 33C(2) for recovery of the compensation.
The university raised a preliminary objection that the labour court had no jurisdiction because
the university was not an 'industry'. The labour court overruled the objection and directed
the university to pay the compensation. Against this award of the labour court, the university
filed an appeal to the Supreme Court. The Supreme Court held that the drivers employed
by the university were not employed in 'industry' because: (i) predominant function of the

22 Rabindranath Sen v. First Industrial Tribunal, (1963} 1 LLJ 567 (Calcutta).

23 Alien Macgregor Smith Forge v. First Industrial Tribunal, (1963} 1 LLJ 556 (Calcutta).
24 Ram Krishna Ayyar Vaidyanathan v. Fifth Industrial Tribunal, (1968} LLJ 597 (Calcutta).
25 NE Merchant v. Bombay Municipal Corporation, (1968} 1 LLJ (Bombay).
26 T K Menon v. District Labour Officer, (1966} 2 LLJ 613 (Kerala).
27 Fraser and Ross v. District Labour Officer, (1966} 2 LLJ 682 (Madras).
28 Bangalore Water Supply v. Rajappa, AIR 1978 SC 548, 584.
29 Corporation of City ofNagpur v. Its Employees, (1960} 1 LLJ 523.
30 University of Delhi v. Ram Nath, AIR 1963 SC 1873.
214 • Industrial Relations and Labour Laws

university was to impart education; (iz) teachers were not workmen and (iii) others (persons
other than teachers) were insignificant in number and did minor and insignificant work.
The seven-judges bench of the Supreme Court in Bangalore Water Supply v. Rajappa
overruled this decision and reaffirmed the decision in Corporation of Nagpur case that
educational institution was industry. Justice Krishna Iyer laid down the following test to
determine whether an activity is an 'industry'.
The test is not the predominant number of employees entitled to enjoy the benefits of
the Act. The true test is the predominant nature of the activity. In the case of the university
or an educational institution, the nature of the activity, is, ex hypothesis, education which is
a service to the community. Ergo, the university is an industry.
His Lordship added:

... there are a number of other activities of the university administration,

demonstrably industrial which are severable although ancillary to the main
cultural enterprise. For instance, a university may have a large printing press as
a separate but considerable establishment. It may have a large fleet of transport
buses with an army of running staff. It may have a tremendous administrative
strength of officers and clerical cadres. It may have karamcharis of various hues.
And observed:

It would be strange, indeed, if a university has 50 transport buses, with drivers,

conductors, cleaners and workshop technicians. How are they to be denied
the benefits of the Act, especially when their work is separable from academic
teaching merely because the buses are owned by the same corporate personality?
In A Sundarambal v. Government of Goa, Daman and Diu 31 , the Supreme Court held that
educational institutions are covered by the definition of 'industry' under the Industrial
Disputes Act, 1947.

H. Clubs
Are clubs industries? This question formed the subject matter of judicial interpretation in
a number of decided cases. Madras Gymkhana Club Employees' Union v. Gymkhana Club 32 is
a leading case on this. The Madras Gymkhana Club-a members' club, was engaged on
a vast scale in multifarious activities and for facilities of accommodation, catering, sale of
alcoholic and non-alcoholic beverages, games, etc., and the club organized parties at which
guests were freely entertained and the club had established arrangements with other clubs.
It had a membership of 1,200 with almost 800 active members. It employed 194 employees.
The club owned both movable and immovable properties with several of its wage bills
falling in between ~1 and 2 lakh. A dispute arose between the management of Madras
Gymkhana Club and its workmen regarding the payment of bonus for the year 1962. The
government referred the dispute to the industrial tribunal for adjudication. The tribunal
held that Madras Gymkhana Club was not an industry and was, therefore, not liable to pay
bonus to its workmen. Against this order, the aggrieved workmen filed an appeal before

31 (1988) 4 sec 42.

32 Madras Gymkhana Club Employees' Union v. Gymkhana Club, (1967) 2 LLJ 720 (SC).
 Arena of Interaction and Participants in Industrial Disputes • 215

the Supreme Court. On these facts a question arose for determination before the Supreme
Court-whether a club was an 'industry'. The Court limited the scope of 'industry in four
different ways: (i) the Court held that the cardinal test was to find out whether there was
an industry according to the denotation of the words in the first part of the definition. The
second part of the definition did not enlarge the meaning of the expression 'industry' in the
sense that standing alone, it could not define 'industry', (iz) although the Court observed that
the second part of the definition of industry gave no extended connotation, yet the manner in
which it interpreted the second part limited the meaning of the first part, because according
to the Court, unless the parts of the definition were independently fulfilled, there could not
be an 'industry', (iii) the emphasis on the production and distribution of material goods,
i.e., 'wealth' indicated that the Court was giving an economic content to the first part of the
definition of 'industry' and (iv) the Court defined the word 'undertaking' as 'any business
or any work or project which one engages in or attempts as an enterprise analogous to
business or trade' and which results, 'in material goods or material services'. In Bangalore
Water Supply and Sewerage Board case, the Supreme Court overruled the aforesaid decision.
The Court disapproved of the reasoning of Madras Gymkhana that it was not an 'industry'
because the club belonged to members only.
The aforesaid view was followed in Cricket Club of India v. Bombay Labour Union. 33 The
club was incorporated with a view to encouraging and promoting various games and sports
and to conduct sports and matches, particularly of cricket. It carried on various activities
of the club like recreation and entertainment, catering to members and their guests and
sometimes to spectators. Among other facilities, the club provided for residence. The club
also made invesbnents in immovable property. It had a membership of 4,800 and employed
397 persons. On these facts a question arose whether the activities carried on by the club were
'industry'. The Court observed that (i) it was a members' 34 club without any shareholders
and was of the nature of a self-servicing institution organized by the club for its members and
it was wrong to equate it with the activity of a hotel, (iz) the opening of club stall to general
public to buy snacks, etc., on few occasions in a year could not be held to be an 'undertaking
of the nature of business or trade', (iii) income from the rent of the building did not accrue
with aid and cooperation of employees, (iv) club's income from the stadium was not of the
nature of 'industry'. It, accordingly, held that club was not an 'industry' under Section 2G).
This decision was overruled in Bangalore Water Supply and Sewerage Board (Supra).

I. Commercial Institutions
In Ahmedabad Textile Industry Research Association v. State of Bombay and Others 35, the Supreme
Court adopted the working principle formulated in Hospital Mazdoor Sabha supra. Here the
question arose whether an association for research maintained by the textile industry and
employing technical or other staff fell within the definition of 'industry'. In this case, the
association was founded with the object of establishing a textile research institute for carrying
on research and other scientific work in connection with textile trade and industry, and other
trades and industries allied therewith or necessary thereto. The research was conducted
with a view to finding greater efficiency, rationalization and reduction of costs, research into
conditions of work, time and motion studies, fatigue and rest pauses, standardization of

33 Cricket Club of India v. Bombay Labour Union, (1966) 1 LLJ 775 (SC).
34 AIR 1978 SC 548, 591.
35 Ahmedabad Textile Industry Research Association v. State of Bombay, (1960) 2 LLJ 720 (SC).
216 • Industrial Relations and Labour Laws

methods or work, condition of factories and diseases and accidents arising out of employment
in textile mills. The Court analysed the activity of the research association and found that
the undertaking as a whole is in the nature of business or trade organized with the object
of discovering ways and means by which the member mills may obtain large profits in
connection with their industries. 36 The Court accordingly held that the nature of activity
carried on by the research association fell within the definition of the word 'industry'.
In Federation of Indian Chamber of Commerce and Industry v. Their Workmen 37, the
federation carried on systematic activity to assist its members and other businessmen and
industrialists and even non-members as for instance, in giving them the right to subscribe to
their bulletin; in taking up their cases involving their business and in obtaining concession
and facilities for them from the government and to provide for arbitration in respect of
disputes arising in the course of trade, industry or transport. On these facts the question
arose whether the federation was engaged in an industry. Speaking for the Supreme Court,
Justice Jagmohan Reddy observed:

In our view, the linchpin of the definition of industry is to ascertain the systematic
activity which the organization is discharging namely, whether it partakes the
nature of a business or trade or is an undertaking or manufacture or calling
of employers. If it is that and there is cooperation of the employer and the
employees resulting in the production of the material services, it is an industry
notwithstanding that its objects are charitable or that it does not make profits
or even where profits are made, they are not distributed among the members. 38
The Court accordingly held that the activities carried on by the federation where
business activities and material services were rendered to businessmen, traders and
industrialists who were members of the federation.
The aforesaid view was reiterated in Workmen v. Management of ISI. 39 The institution
prepared and published (whether new or revised) Indian standards in different subjects and
sold them. The institution also acted as a sole selling agent for sale of overseas standards
on commission basis and derived a large income. Further, the institution carried on the
activity of certification of 'standard mark'. The institution had several laboratories and
also a library. For the aforesaid purpose, the management employed considerable number
of workmen. These workmen made certain demands which resulted in industrial dispute
which was referred to the industrial tribunal for adjudication. The management questioned
the jurisdiction of tribunal on the ground that the workmen were not employed in an
'industry'. The objection was upheld by the tribunal. Thereupon, the workmen filed an
appeal to the Supreme Court. Justice Bhagwati (with whom Justice Goswami agreed), who
wrote the majority judgement for the Court, held that the Indian Standard Institution was
an 'industry'. His Lordship gave the following reasons in support of his conclusion:
(i) The activities of the institution are carried on in a systematic manner and are organized
or arranged in a manner in which trade or business is ordinarily organized or arranged.
The institution derives large income from its activities.

36 Ahmedabad Textile Industry Research Association v. State of Bombay, (1960) 2 LLJ 720 at 724.
37 Federation of Indian Chamber of Commerce and Industry v. Their Workmen, (1971) 2 LLJ 630 (SC).
38 Id. at 631.
39 Workmen v. Management of Indian Standard Institution, (1976) 1 LLJ 33 (SC). This decision has been
overruled by the Supreme Court in its subsequent judgement in the Bangalore Water Supply case.
 Arena of Interaction and Participants in Industrial Disputes • 21 7

(iz) The object of the activities of the institution is to render material services to a part of
the community, namely, manufacturers, distributors and consumers.
(iii) There is also cooperation between the management of the institution and the employees
who associate together for rendering these material services.
But, Justice Alagiriswami in his dissenting opinion held that undertaking run in public
interest of the country as a whole without profit motive and engaged in activities in the form
of social service or intended to benefit the general public was not an 'industry'.

J. Private or Domestic Servants

In Corporation of the City of Nagpur v. Its Employees 40, the Supreme Court held that domestic
or personal service rendered by servants was outside the ambit of the Industrial Disputes
Act because they were not employed in the 'industry' which on its part was based on the
principle that there was no 'organized activity'. In State of Bombay v. Hospital Mazdoor Sabha 41,
the Supreme Court excluded domestic services from the scope of 'industry' on the ground
that there was no systematic and habitually undertaken activity in which employers and
employees cooperate to produce material goods or material services which is organized or
arranged in business or trade like manner. But, in Madras Gymkhana Club Employees' Union
v. Madras Gymkhana Club42, the Supreme Court excluded domestic services from the scope of
'industry' on the ground that the work done by them was not in pursuit of 'trade, business,
undertaking, manufacture or calling of employers'.

K. Religious Institutions
The high courts are divided on the issue whether certain departments of religious
institutions were carr,l/ng on the 'industry'. While the High Court in Travancore Devaswom
Board v. State of Kerala held that Maramat deparbnent of the Devaswom Board constituted
under Travancore Cochin High Religious Institutions Act, 1950 was carrying on an
'industry' under Section 2G) because: (i) construction of buildings for various purposes
was undertaken, (ii) there was cooperation between labour and capital and (iii) the work
had been undertaken by private persons. The Orissa High Court in Harihar Bahinipati v.
State of Orissa44 held that maintenance of law and order in Shri Jagannath Temple, Puri
was outside the ambit of 'industry' because there was (i) no cooperation of capital and
labour, (ii) no material service was rendered, (iii) primary function was spiritual and not
secular, and (iv) no material human needs were met. But the Punjab and Haryana High
Court in Shiromani Gurudwara Prabandhak Committee, Patiala v. Presiding Officer, Labour
Court, Patiala45 held that Gurudwara Prabandhak Committee distributing Karah-prasad
was opening up free kitchen, i.e., langar would not come within the purview of 'industry'.
Neither is it a commercial organization nor is it running any business, but discharging
purely religious functions.

4° Corporation of the City ofNagpur v. Its Employees, AIR 1960 SC 523,535.

41 State of Bombay v. Hospital Mazdoor Sabha, (1960} 1 LLJ 251 (SC}.
42 Madras Gymkhana Club Employees' Union v. Madras Gymkhana Club, (1967} 2 LLJ 720.
43 Travancore Devaswom Board v. State of Kerala, (1963} 2 LLJ 218 (Kerala).
44 Harihar Bahinipati v. State of Orissa, (1965) 1 LLJ 501 (Orissa).
45 (2004) LLR 60.
218 • Industrial Relations and Labour Laws

In Cheirinjumpatty Thampuratty v. State of Kerala 46, the Kerala High Court held that
Devaswom (temple) governed by the Religious and Charitable Endowments Act, 1951 was
not an 'industry' under Section 2G) of the Act. Earlier, in Pappammal Annachatrum v. Labour
Court47', a division bench of the Madras High Court ruled that the activity of providing
assistance in the form of boarding and lodging to students in educational institutions which
constituted the main activity of the endowment was not covered by 'industry' under Section
2G) because it was serving the cause of education.
In Indravadan N Adhvaryu v. Laxminarayan Dev Trust through Chief Executive Kothari48,
the Gujarat High Court held that the trust of a temple which is not involved in any business
or undertaking or manufacturing activity would not fall within the definition of 'industry'.

L. Charitable Institutions
In Bombay Pinjrapole v. The Workmen 49, the Supreme Court was called upon to decide as to
whether the Bombay Pinjrapole was an 'industry'. In this case, Pinjrapole was originally
stated as a charitable institution solely devoted to the welfare of the sick and disabled
animals. Subsequently, the institution had substantially altered its complexion and a dairy
farm was set up. The 'value of milk supplied to the sick and infirm cattle' was negligible as
compared to that sold in the market, both in terms of persons employed and also in terms of
money. A dispute arose between the Bombay Pinjrapole and its workmen over the question
of revision of wage scale and other service conditions. On reference, the tribunal held that
activities of the Pinjrapole constituted an 'industry'. The Pinjrapole, after unsuccessfully
moving to the Bombay High Court, filed an appeal to the Supreme Court. The Supreme
Court also held that the Pinjrapole was running an 'industry' and the 'mere fact, that the
Pinjrapole never purchase ... cows and stud bulls except once makes no difference to the
question as to whether their activity of maintaining cows and bulls could only be considered
asinvesbnent.
In Bangalore Water Supply and Sewerage Board case50, the Supreme Court approved
the holding in the case not because Pinjrapoles had commercial motives, but despite
compassionate objectives, they share business-like operations. Justice Krishna Iyer classified
enterprise into three categories:

The first is one where the enterprise, like any other, yields profits but they
are siphoned off for altruistic objects. The second is one where the institution
makes no profit but hires the services of employees as in other like businesses
but the goods and services which are the output, are made available at low
or no cost, to the indigent needy who are priced out of the market. The third
is where the establishment is oriented on a humane mission fulfilled by men
who work, not because they are paid wages, but because they share the passion
for the cause and derive job satisfaction from their contribution. The first and
second are industries, the third not.

46 (2005) 1 LLJ 32.

47 Pappammal Annachatrum v. Labour Court, (1964) 1 LLJ 493 (Madras).
48 (2011) LLR 262.
49 Bombay Pinjrapole v. The Workmen, (1971) 2 LLJ 393 (SC).
50 AIR 1978 SC 548.
 Arena of Interaction and Partidpants in Industrial Disputes • 21 9

M. Cooperative Societies
Cooperative Societies ordinarily cannot fall outside Section 2G). After all, the society, a legal
person, is the employer. The members and/ or others are employees and the activity partakes
of the nature of trade. Merely because cooperative enterprises deserve state encouragement,
the definition can not be distorted. Even if the society is run by the members only, the entity
(save where they are few and self serving) is an 'industry' because the member-workers
are paid wages and there can be dispute about rates and different scales of wages among
the different categories, i.e., workers and workers or between workers and employer. These
societies-credit societies, marketing cooperatives, producers or consumers' societies of
apex societies are industries.51

N. National/State Highways
In Bangalore Water Supply Board's case, the Supreme Court held that the establishment,
construction and maintenance of national and state highways is an essential governmental
function. It is in no way even remotely analogous to trade or business and therefore, cannot
fall within the ambit of 'industry'. But in Executive Engineer, National Highways v. Industrial
Tribunal, Bhubaneshwar,52 a division bench of High Court of Orissa held that 'National
highways division of the works deparbnent of government is an industry within Section 2G)
of Industrial Disputes Act, 1947, as toll taxes are collected over the bridges constructed by
the highways division. In other words, the functions of the national highways division of the
works deparbnent of government are non-sovereign in nature, therefore it is an 'industry.'

0. Zila Sainik Board

The division bench of the Punjab and Haryana High Court in State of Punjab v. Kidar Nath 53
rejected the argument that the zila sainik board is not an 'industry' because it neither
undertakes any commercial activity akin to trade or business nor any profit is earned by it.
The Court accordingly held that zila sainik board was an 'industry'.

P. Apartment Owners' Housing Society

In Management of Som Vihar Apartment Owners Housing Maintenance Society Ltd v. Workmen C/o
Indian Engg. & General Management 54, a dispute arose between the owners' of the aparbnents
and its employees engaged to maintain cleanliness and other services in the aparbnents
regarding dearness allowance, house rent allowance, conveyance allowance and uniforms.
The government of Delhi referred the dispute to the industrial tribunal for adjudication. The
question to be decided was whether owners' housing maintenance society is an 'industry'
within the meaning of Section 2G) of the ID Act? The court held that society was an 'industry'.
Aggrieved by this order, the society filed an appeal before the Supreme Court. The Court
following its earlier decision in Bangalore Water Supply and Sewerage Board, answered the
question in negative. The Court held that the society constituted for the purpose of its
members could not be treated as 'industry'.

51 Ibid.
52 (1995) 1 LLJ 470.
53 (1999) 1 LLJ 234.
54 (2002) Lab. IC 2468.
220 • Industrial Relations and Labour Laws

The aforesaid view was reiterated in Md. Manjur v. Shyam Kunj Occupants' Society. 55

Q. Dock Labour Board

In Vishakapatnam Dock Labour Board v. Stevedores' Association, Vishakapatnam 56, a question
arose whether the Vishakapatnam Dock Labour Board-a statutory board, was an 'industry'
under Section 2 G) of the Industrial Disputes Act, 1947? Applying the test laid down in
Madras Gymkhana Club Union v. Gymkhana Club57, the Supreme Court held that the board
functioning under the Dock Workers (Regulation of Employment) Act, 1948, and the
scheme framed thereunder was not carrying of 'industry' so as to attract the provisions of
the Industrial Disputes Act, 1947.

R. An Appraisal
Thus, it is evident that judicial response in the aforesaid cases reveals conflicting view. In
the Budge Budge Municipality,58 Hospital Mazdoor Sabha,59 Corporation of City of Nagpur 60,
Ahmedabad Textile Industry Research Association 61 and even in Fazalbhoys 62 case, the Supreme
Court specifically held 63 that the second part of the definition was added to the area covered
by the first part of the definition. But, in Madras Gymkhana Club 64, the Supreme Courtrendered
the second part superfluous,65 whereas in Safdarjang Hospital case, the Supreme Court used
the second part actually limiting the scope of even the first part.'66
Again the word 'undertaking' has received conflicting interpretations. In Budge Badge
Municipality case, the Supreme Court declined to imbue it with the characteristics of business,
trade or manufacture. 61 But with a view to avoid a formulation in terms wider than that

55 (2004) LLR 853.

56 Vishakapatnam Dock Labour Board v. Stevedores' Association, Vishakapatnam, (1970) 1 LLJ 46 (SC).
57 Madras Gymkhana Club Union v. Madras Gymkhana Club, (1967) 2 LLJ 720,728.
58 Budge Budge Municipality, (1953) 1 LLJ 195 (SC).
59 Hospital Mazdoor Sabha, (1960) 1 LLJ 25 1.
°
6 Corporation of City ofNagpur, (1960) 1 LLJ 523.
61 Ahmedabad Textile Industry Research Association, (1960) 2 LLJ 720 (SC).
62 National Union of Commercial Employees v. MR Mehar, AIR 1962 SC. 1080.
63 Section 2(]) does not define 'industry' in the usual manner by prescribing what it means: the first
clause of the definition gives the statutory meaning of 'industry' and the second clause deliberately
refers to several other items of industry and brings them in the definition in an inclusive way. It is
obvious that the words used in the inclusive definition denote extension and cannot be treated as
restricted in any sense. See Hospital Mazdoor Sabha case.
64 Madras Gymkhana Club case (1967) 2 LLJ 720.
65 ' ... What must he established is the existence of an industry viewed from the angle of what the
employer is doing and if the definition from the angle of the employer's occupation is satisfied,
all who render service and fall within the definition of workman come within the fold of industry
irrespective of what they do.' Madras Gymkhana Club, (1967) 2 LLJ 720, 727-28.
66 Safdarjang Hospital, AIR 1970 SC 1407 at 1411. There must, therefore, be an enterprise in which the
employers follow their avocations as detailed in the definition and employ workmen who follow
one of the avocations detailed for workmen.
67 Though the word undertaking in the definition of 'industry' is wedged in between business and
trade on the one hand and manufacture on the other and though therefore, it might mean only a

(Cont ... )
 Arena of Interaction and Partidpants in Industrial Disputes • 2 21

was strictly necessary for the disposal of case, the Court itself concluded that activities
'analogous to the carrying out of a trade or business', as the situation in that case was within
the ambit of the expression 'undertaking'. 68 In Hospital Mazdoor Sabha, the Supreme Court not
only declined to adopt the rule of construction noscitur a sociis 69 but even in formulation of
working principle. It refrained from using the expression' analogous to the carrying out of
a trade or business' but coined the phrase 'organized or arranged' .70 Nevertheless, in Madras
Gymkhana Club case, the Supreme Court read the aforesaid observations and expression
'undertakings' so that the employer's activity must not only be analogous to carrying out a
'trade or business' but must also be organized as business or trade is ordinarily organized.

S. Bangalore Water Supply and Sewerage Board Case:

1. An Epoch-making Judgement
These conflicting opinions of the Supreme Court during the last 25 years left the coverage of
the expression 'industry' more uncertain and vague. This state of affairs led to the constitution
of seven members bench71 of Supreme Court in Bangalore Water Supply and Sewerage Board v.
Rajappa72 to enter into a detailed examination of earlier decisions with a view to find out a
rationale basis for determining whether activities like clubs, educational institutions, research
institutes, cooperatives, charitable projects and other ventures including domestic servants
and governmental functions fall within or outside the scope of the statutory expression
'industry'. The majority opinion not only answered it in affirmative but exploded the judicial
myth. The Court, while restoring its ruling in Budge Budge Municipality Corporation of City
ofNagpur and Hospital Mazdoor Sabha (supra), overruled its decisions in Safdarjang Hospital,
National Union of Commercial Employees, Delhi University, Gymkhana Club and Dhanarajgiri
Hospital (supra) cases. However, in a partially dissenting opinion, Justices Jaswant Singh and
Tulzapurkar (though they agreed in the conclusion) were not in favour of giving such a wide
coverage to the term 'industry'. Indeed, both majority and minority decisions expressed
the view that the matter should be clarified by the legislature by a suitable amendment.
For the purposes of analysis, the majority judgement may conveniently be considered
under three headings, viz., areas of conflict, interpretation of 'industry', and formulation of
tests for determining the scope of the term 'industry'.

business, trade or undertaking, still it must be remembered, that if that were so, there was no need
to use the word separately from business or trade. Budge Budge Municipality, (1953) 1 LLJ 195.
68 'The undertaking or the service will still remain within the ambit of what we understand by an
industry though it is carried on with the aid of taxation and no immediate materials gain by way of
profit is envisaged.' Budge Budge Municipality (1953) 1 LLJ 195 at 200.
69 'It must be borne in mind that noscitur a sociis is merely a rule of construction and it cannot prevail in
cases where it is clear that the words have been deliberately used to make the scope of the aforesaid
word correspondingly wider'. Hospital Mazdoor Sabha, (1960) 1 LLJ 251.
70 Hospital Mazdoor Sabha, op. cit., 259.
71 The bench consisted of Chief Justice Beg and Justices Krishna Iyer, Chandrachud, Bhagwati,
Jaswant Singh, Tuizapurkar and Desai. Justice Krishna Iyer wrote the main judgement of the Court
on behalf of himself, Justice Bhagwati and Justice Desai. Chief Justice Beg, Chandrachud J, (as he
then was) wrote a separate but concurring judgement. However, Justice Jaswant Singh and Justice
Tulzapurkar wrote dissenting opinion. It is significant to note that none of the judges except Justice
Bhagwati, who gave a judgement in Indian Standard Institution, (1976) 2 SCR 138 has participated
in the decision of delineating the scope of the term industry.
72 Bangalore Water Supply and Sewerage Board v. Rajappa, AIR 1978 SC 548.
222 • Industrial Relations and Labour Laws

1. Area of Conflict. The Supreme Court itself itemized the area of conflict namely:
(i) (a) Are establishments run without profit-motive, industries?
(b) Are charitable institutions industries?
(c) Do undertakings governed by a no-profit-no-loss rule, statutorily or otherwise
fastened, fall within the definition in Section 2 G)?
(d) Do clubs or other organizations (like the YMCA), whose general emphasis is not
on profit-making but fellowship and self-service fit into the definitional circle?
(e) To go to the core of the matter, is it an inalienable ingredient of 'industry' that it
should be plied with a commercial object?
(ii) (a) Should cooperation between employer and employee be direct in so far as itrelated
to the basic service or essential manufacture which is the output of the undertaking?
(b) Could a lawyer's chamber or chartered accountant's office, a doctor's clinic or
other liberal professions, occupations or calling be designated an industry?
(c) Would a university or college or school or research institute be called an industry?
(iii) (a) Is the inclusive part of the definition in Section 2 G) relevant to the determination
of an industry? If so, what impact does it make on the categories?
(b) Do domestic services-who slave without respite become 'industries' by this
extended sense?
(iv) Are governmental functions, stricto sensu, industrial and if not, what is the extent of
the immunity of instrumentalities of government?
(v) What rational criterion exists for a cutback on the dynamic potential and semantic
sweep of the definition, implicit in the industrial law of a progressive society geared
to greater industrialization and consequent concern for regulating relations and
investigating disputes between employers and employees as industrial processes
and relations become more complex and sophisticated and workmen become more
right-conscious?
(vi) As the provision now stands, it is scientific to define 'industry' based on the nature-
the dominant nature of the activity, i.e., on the terms of the work, remuneration and
conditions of service which bond the two wings together into an employer-employee
complex? 73
Did these issues figure in the judgement?
2. Interpretation of the Word 'Industry'. In order to answer these issues, Justice Krishna
Iyer considered the word 'industry' in the light of historical perspective, objects and reasons,
international thoughts, popular undertaking, contextual connotation and suggestive subject-
matters, dictionary meaning and social perspective in Part IV of the Constitution. In this
perspective, Justice Krishna Iyer interpreted the word 'undertaking' as follows:

The expression 'undertaking' cannot be torn off the words whose company it
keeps. If birds of a feather flock together and nositur a sociis is commonsense
guide to construction, 'undertaking', must be read down to confirm to the
restrictive characteristic shared by the society of words before and after.
Nobody will torture 'undertaking' in Section 2G) to mean meditation or

73 Bangalore Water Supply and Sewerage Board v. Rajappa, AIR 1978 SC 548.
 Arena of Interaction and Partidpants in Industrial Disputes • 223

Mushaira which are spiritual and aesthetic undertakings. Wide meanings

must fall in line and discordance must be excluded from a sound system. 74
The aforesaid principle was also applied in interpreting the expressions 'service',
'calling' and the 'like'. Further, the word 'trade', according to Justice Iyer, embraced
'functions of local authorities and even profession'.
The term 'manufacture' received the attention of Chief Justice Beg who explained it
to mean:
... a process of manufacture in which the employers may be engaged.
He, however, pointed out that the term 'employer' necessarily postulated employees,
without whom there could be no employer. Chief Justice Beg also emphasized the inclusive
character of second part of the definition which:

Makes the concept more nebulous as it obviously extends the definition to any
calling, service, employment, handicraft or industrial occupation or avocation
of workmen.
The aforesaid interpretation given by Chief Justice Beg is in conformity with the
legislative intent of Section 2 G) of the Industrial Disputes Act.
3. Formulation of Test. Justice Krishna Iyer, after review of Supreme Court decisions,
laid down the following tests for determining the scope of the term 'industry':
(a) Where (z) systematic activity, (ii) organized by cooperation between employer and
employee (the direct and substantial element is chimerical), (iii) for the production
and/or distribution of goods and services calculated to satisfy human wants and
wishes (not spiritual or religious but inclusive of material things or services geared
to celestial bliss, e.g., making on a large scale prasad or food), prima facie, there is an
'industry' in that enterprise.
(b) Absence of profit motive or gainful objective is irrelevant, be the venture in public,
joint, private or other sector.
(c) The true focus is functional and the decisive test is the nature of the activity with
special emphasis on employer-employee relations.
(d) If the organization is a trade or business, it does not cease to be one because of
philanthropy animating the undertaking although Section 2G) uses the words of the
widest amplitude in its two limbs, their meaning cannot be magnified to overreach itself.
Nevertheless, Justice Krishna Iyer pointed out that although Section 2G) used words
of widest amplitude in its two limbs, their meaning could not be magnified to overreach
itself and observed:

Undertaking must suffer a contextual and associational shrinkage as explained

in Banerji (supra) and in this judgement, so also, service, calling and the like. This
yields the inference that all organized activities possessing the triple elements
in 3 (a) (supra), although not trade or business, may still be 'industry' provided
the nature of the activity, viz., the employer-employees basis bears resemblance
to what we find in trade or business. This takes into the fold 'industry',
undertaking, calling and services ventures 'analogous to the carrying on the

74 Ibid.
224 • Industrial Relations and Labour Laws

business'. All features, other than the methodology of carrying on the activities,
viz., in organizing the cooperation between employer and employees, may be
dissimilar. It does not matter, if on the employment terms there is analogy.75
However, where a complex group of activities were involved, he adopted the' dominant
nature test' enunciated in Corporation of City ofNagpur and explained:

Where a complex of activities, some of which qualify for exemption, others

not, involves employees of the total undertaking, some of whom are not
'workmen' as in the University of Delhi case (supra) or some deparbnents are
not productive of goods and services if isolated, even then, the predominant
nature of the services in the integrated nature of the deparbnents as explained
in the Corporation ofNagpur (supra), will be the true test. The whole undertaking
will be 'industry' although those who are not 'workmen' by definition may
not benefit by the status.
Afplying the aforesaid tests in specific cases, the Court held that activities such as
clubs,7 educational institutions,77 research institutes, charitable institutions,78 cooperative
societies79, hospitals and local bodies80 and kindred ventures (which fulfilled the triple test
laid down in this case) fell within the purview of 'industry'.
A wide amplitude has been given to the term 'industry' in six different ways: First,
The Court held that a single lawyer, a rural medical practitioner or urban doctor with an
assistant and/ or menial servant were not running an industry because there was nothing like
organized labour in such employment. The image of industry or even quasi-industry was
one of plurality of workmen, not an isolated or single assistant or attendant. The category
was more or less like personal avocation for livelihood taking some paid or part-time work
from another. Second, he held that charitable institutions (where the establishment was
oriented and a human mission fulfilled by men who worked not because they were paid
wages, but because they shared the passion for the cause and derived job satisfaction from
their contribution), were not industries. Third, he held that self-serving members' clubs were
not industry because in such a club, the dynamic aspect was self-service. He accordingly
held that in such an institution, a part-time sweeper or scavenger or multi-purpose attendant
would not be considered to be employed in any industry because this marginal element
would not transform a little association into an 'industry'. Fourth, he held that restricted
category of cooperatives, even gurukulas and little research laboratories were not industry
if no employee were hired without destroying the non-employee character of the unit. Fifth,
he excluded regal and sovereign functions (described as' the primary and alienable function
of a constitutional government') from the purview of industry. Sixth, he also excluded
constitutional and competently enacted legislative provisions from the ambit of 'industry'.
Accordingly, he held that petty handicraftsmen, domestic servants, cobblers, cycle
repairers, butchers, bakers, candle-stick makers, the single lawyer, rural medical practitioner,
urban doctor, rural engineer with or without a little assistance or menial servants, self-

75 Bangalore Water Supply and Sewerage Board v. Rajappa, AIR 1978 SC 548.
76 Like Gymkhana Club, Cosmopolitan Club, Cricket Club of India and National Sports Club of India.
77 University, college, school.
78 Pinjrapole, Gandhi Ashram.
79 Credit Societies, marketing cooperatives, producers or consumer societies or apex societies.
80 Municipalities.
 Arena of Interaction and Partidpants in Industrial Disputes • 225

service members' club and charitable institutions oriented on human mission were outside
the purview of 'industry'.
We are in basic agreement with the aforesaid line of approach. However, the exclusion
of certain categories of employers from the ambit of the expression 'industry' needs
consideration.
First, Justice Krishna Iyer has excluded 'a single lawyer, a rural medical practitioner,
urban doctor and a rural engineer with a little assistance or menial servant' from the purview
of the word 'industry' on the ground that:

... there is nothing like organized labour in such employment. The image of
industry or even quasi-industry is one of a plurality of workmen, not an isolated or
single little assistant or attendant. The latter category is more or less like personal
avocation for livelihood taking some paid or part-time work from another. The
whole purpose of the Industrial Disputes Act is to focus on resolution of industrial
disputes and regulation of industrial relations and notto meddle with every little
carpenter in a village or blacksmith in a town who sits with his son or assistant
to work for the customers who trek in. The ordinal spectacle of a cobbler and his
assistant or a cycle repairer with a helper, we come across in the pavements of
cities and towns, repels the idea of industry and industrial disputes. 81
It is difficult to agree with this line of reasoning. It will be appreciated that a solicitor,
a doctor or an engineer may himself carry on his entire professional work; or he may,
with other experts in the same profession, organize a firm or nursing home to carry on
the work in an institutionalized manner. While we cannot distinguish in law relating to
labour management relations a solicitors' firm, or nursing home from a single solicitor,
engineer or doctor conducting his work with the aid of personnel employed by him, there
is vital difference between these cases and the case of a single solicitor, doctor, engineer,
etc. conducting his entire professional work himself. 82
It is respectfully submitted that unless a person employs another or is employed by
another, the question of his being an 'employer' or a 'workman' within the meaning of the
Industrial Disputes Act, 1947 does not arise. Since a solicitor, doctor, engineer and the like
acting individually and rendering all service by himself is neither an employer nor workman,
he cannot be a participant in an 'industrial dispute'.
On the other hand, a single solicitor, doctor or engineer employing personnel to assist
him in his work is as much an' employer' as a firm/ nursing home employing such personnel
and if the employed personnel are 'workmen' within the meaning of the IDA, an 'industrial
dispute' between them and their employer may well arise.
Second, Justice Krishna Iyer, like Justice Subba Rao,83 also excluded small professional,
handicraftsman, butcher, baker, candle-stick maker and domestic servant from the purview
of the definition of 'industry' on the ground that 'there was nothing like organized activity
in such employment.' It is submitted that the grounds did not emanate from the words
used in the definition of industry though the interpretation did limit the amplitude of the
words used therein. Section 2(s) of the IDA defines 'workman' to mean inter alia, 'any person

81 AIR 1978 SC 548.

82 Similar argument was made by Mr Chari in Fazalbhoy 's case.
83 Bangalore Water Supply v. Rajappa, AIR 1978 SC 548.
226 • Industrial Relations and Labour Laws

employed in any industry'. Obviously, the expression 'industry' in this section is used in
the same sense as in Section 2G) because if a person is employed in an activity which is not
'industry', he cannot be a workman. However, it cannot be said that domestic servants are not
engaged in'any calling, service, employment, handicraft, industrial occupation or avocation'.
They cannot, therefore, be excluded on the ground of absence of industry. Here, we would
like to emphasize that merely because the activity is held to be an 'industry', the IDA does
not become applicable. There must also be disputes between employers and employers,
workmen and workmen or workmen and employers. Further, barring cases falling under
Chapters V-A and V-B, there must also be, an 'industry dispute'. It is these requirements
which ensure that the IDA deals with disputants who are 'employers' and 'workmen'.
It is significant to note that Chief Justice Beg who concurred with Justice Krishna Iyer
in case under review, expressly held that:

... the second part, relating to workman, must necessarily indicate something,
which ... may include an 'industry' consisting of individual handicraft or
workmen only. 84
The aforesaid observation cuts the line of thinking followed by Justice Krishna Iyer.
Third, the exclusion of 'regal or sovereign functions of the State' leaves much to be desired.
We on our part, find it difficult to accept the decision as correctly interpreting the legislative
intent. Our difficulty primarily arises from the definition of 'workman'. Omitting words and
expressions that are not germane to the present discussion, Section 2 (s) of IDA reads:

Workman means any person... employed in any industry ... but does not include
any such person: (i) who is subject to Army Act, 1950,or the Air Force Act, 1950
or the Navy (Discipline) Act 1934, or (ii) who is employed in police service or
as an officer or other employee of a prison...
If the expression 'industry' did not include 'regal or sovereign functions of State', strictly
understood or' government function', why did the legislature write exclusory clauses (z) and
(ii). The argument that it did so ex abundanti cantela is self-defeating because the question
then will arise as to why make an exception in regard only to some and not in regard to all
persons engaged in 'regal or sovereign functions of State'? After all army, air force, navy,
police and prison do not exhaust the category of 'regal and sovereign functions of State'.
On the other hand, if 'regal and sovereign functions of the State' are included within the
definition of 'industry', the exclusory provisions make sense.
Fourth, the Court has also excluded 'stray wage earning employees' or marginally
employed on regular basis for hire, scavengers, servants, auditors or accountants employed
on wages in charitable institutions (which were oriented on a human mission fulfilled by men
who work not because they are paid wages but because they share the passion for the cause
and derive job satisfaction from their contribution) from the purview of 'industry' because:
(i) ... the substantive nature of the work, as distinguished from trivial terms, is rendered
by voluntary wagesless sishyas.
(iz) in the crucial, substantial and substantive aspect of institutional life, the nature of the
relations between the participants is non-industrial ...

84 Ibid.
 Arena of Interaction and Partidpants in Industrial Disputes • 227

(iii) We must look at the predominant character of office institution and the nature of the
relations resulting in the production of goods and services. 85
Are these relevant factors? Are the problems of labour management relations resolved
because the substantive nature of work is rendered by voluntary wagesless sishyas? Are the
economic needs of the excluded categories of employees satisfied by the fact that substantive
nature of work is rendered by voluntary wageless sishyas. These and other problems involved
hereunder would be discussed under three heads.
(I) In the law relating to labour management relations, we are essentially concerned
with the relationship between the employer and the employees: in particular, we are
not concerned with the relationship of the employer with the outside world. Further,
an employee is vitally concerned with his own employment, non-employment, terms of
employment or conditions of service and his interest is not affected by the nature of service
which the employer renders to the outside world (whether such services be spiritual, pious,
philanthropic or even professional or because the substantive nature of work is rendered
by voluntary wageless sishyas). Under the circumstances, it is difficult to ignore the factual
existence of employer-employee relationship even on the ground that substantive nature
of work is rendered by voluntary wageless sishyas.
(II) The decision brought back the ruling in Delhi University case where it was held
that the employment of subordinate staff who came within the expression 'workmen' did
not affect the issue as they not only comprise 'very minor and insignificant number of
persons' but also, played, 'such a minor, subordinate and insignificant part' that it would
be unreasonable to allow this work to lend its industrial colour to the principal activity of
the university which is imparting education. It suffices to mention that the Supreme Court
in the case under review overruled Delhi University case.
(III) It appears that Justice Krishna Iyer who had earlier at one place held that:

The test is not the predominant number of employees entitled to enjoy the
benefit of the Act. In fact, the Court applied that test of 'predominant number'
while excluding these categories of workers.
He, however, asserted that the test which he was applying was predominant character
of the institution. The fact that majority of persons engaged in the aforesaid charitable
institution are wageless sishyas, we submit, is no ground for denying the protection of
the IDA to those, even stray wage-earning employees who are otherwise covered by the
provisions of IDA.

T. Application of the Bangalore Water Supply Case

The net effect of the decision of the Bangalore Water Supply & Sewerage Board (supra) was that
several activities/ establishments such as research and development organizations,86 public
utility services such as post and telegraph,87 telephones88, charitable and social organizations,

85 Bangalore Water Supply v. Rajappa op. cit.

86 CM T Institute v. Assistant Labour Commissioner, ( 1979) 1 LLJ 192 (Kamataka).
87 K R. B. Kaimal v. Director of Postal Services ( 1979) 1 LLJ 176 (Kerala).
88 Tapan Kumar v. General Manager Calcutta Telephones, (1980) Lab. IC 508 (Cal.) and X RB Kaimal v.
Director of Postal Services op. cit. Bhaskaran v. SDO, (1982) 2 LLJ 248 (SC).
228 • Industrial Relations and Labour Laws

Tirwnala Tirupati Devesthanam,89 Bihar Relief Committee of a humanitarian,90 Government

Security Paper Mills,91 Hindustani Dawakhana,92 public service commissions,93 construction
and maintenance of national and state highways,94 N.E.S. Block, Coir Board (a statutory
body) community development (establishment of the government), Southern Railway,
Kerala State Civil Supplies Corporation Ltd, Trichur, municipal council and Kerala State
Electricity Board,95 Christian Medical College Hospital attached to the Christian Medical
College,96 Bihar Khadi Gramodyog Sangh,w Provident Fund Organization,98 Indian Institute
of Petroleum,99 basic training institutes,100 Corporation of Cochin,101 Karnataka State Road
Corporation,1 02 trade unions103 (carrying on activities other than trade unionism), Indian
Navy Sailors' Home Deparbnent104 (to provide facilities like loading, cafeteria, indoor games,
reading rooms, etc., to the sailors and their guests not provided by navy establishments due
to lack of space and exigencies of service), Kamla Retreat105 (a place of rest and relaxation),
public health engineering deparbnent of the state of Bihar10 , Doordarshan,107 irrigation
deparbnent,108 forest deparbnent109, societies promotin~ health and training of women
in family planning programme of the state government 10, labour indentor carryinfl the
business of recruiting labour,111 a cooperative milk society,112 a hair cutting saloon,1 3 the
Mannat section of Travancore Devaswom Board engaged in the construction of buildinfls
connected with dairy farms, schools, hostels, cottage industries and workshops and shops, 14
the activities of Grain Dealers' Association whose principal activity was to transport goods
from the government godowns to respective ration shops of its members,11 5 a milk supply
scheme, a government undertaking supplying milk to city of Jaipur under animal husbandry

89 TT Devasthanam v. Commer. of Labour, (1979) 1 LLJ 448.

90 Bihar Relief Committee v. State of Bihar, ( 1979) 2 LLJ 53 (Pat).
91 Security Paper Mills v. Hati Shankar Namdeo, (1980) 2 LLJ 61 (M.P.).
92 SC Workers' Union v. Management ofAyurvedic A Unani Tibbia College Board, (1980) Lab. IC 892 (Del.).
93 Najeema Beevi v. Public Service Commission, ( 1983) 1 LLJ 433 (Ker.).
94 State of Punjab v. Kuldip Singh, (1983) 1 LLJ 309 (Punj. & Haryana).
95 Kmaymmal v. State of Kerala, (1983) 1 LLJ 267.
96 Christian Medical College, Vellore Association v. Govt, of India, ( 1983) 2 LLJ 372 (Madras).
97 Gopalji Jha Shastri v. State of Bihar, (1983) 2 LLJ 22 (SC).
98 PF Employees ' Union v. Addl. Industrial Tribunal, ( 1983) 2 LLJ 108 (Kerala).
99 Indian Institute of Petroleum v. State of U.P., (1985) Lab IC 198 (Allahabad).
100 B Jateshwar Sharma v. Director of Education, (1985) Lab. IC 414 (Gujarat).
101 Corporation of Cochin v. Jalaja, ( 1984) 1 LLJ 526 (Kerala).
102 Hariba v. KS RT Corporation, ( 1983) 2 LLJ 76 (Kamataka).
103 Vasudeo Ambre v. State of Maharashtra, (1988) Lab. IC 554 (Bombay).
104 Indian Navy Sailors' Home v. Bombay Gymkhana Club Caterers and Allied Employees' Union; ( 1986) Lab.

IC 1118.
105 Cotton & Woollen Textile Workers' Union v. Industrial Tribunal, (1982) Lab. IC 1329 (SC).
106 Dinesh Sharma v. State of Bihar, (1983) BLJR 207 (Patna).
107 Doordarshan Karmachari Congress v Union of India, (1988) 2 LLJ 83 (Allahabad).
108 Des Raj v. State of Punjab, AIR 1988 SC 1182.
109 Raj Mukari v. State of Himachal Pradesh, (1989) Lab. IC 841 (Himachal Pradesh).
110 Mahila Samiti v. State of MP, (1989) Lab. IC 891 (Madhya Pradesh).
111 KC Das v. State of West Bengal, (1960) 2 LLJ 505 (Calcutta).
112 Cooperative Milk Societies' Union Ltd., v. State of West Bengal, (1958)2 LLJ 61 (Calcutta).
113 Central Hair Cutting Saloon v. Harishikesh Pramanik, (1956) 1 LLJ 596 (LAT).
114 Travancore Devaswom Board v. State of Kerala, (1963) 2 LLJ 218 (Kerala).
115 V A Chedda v. Bambai Mazdoor Union, (1973) Lab. IC 697 (Bombay).
 Arena of Interaction and Partidpants in Industrial Disputes • 229

deparbnent,11 6 the activities of the Khadi Gramodyog Sangh,117 the activities of the survey
and investigation division of the irrigation deparbnent of the govt.,118 the Chambal Hydel
Irrigation Project,11 9 the Salandi Irrigation Project;120 the Tea Board constituted under the Tea
Act, 1953,121 the Bihar Relief Committee which undertook minor irrigation schemes in the
state of Bihar with all ancillary systematic operations,122 a shop governed by the provisions of
the U.P. Shops & Establishments Act,123 the construction work of the Tenughat Dam carried
on by the government of Bihar,124 the Balemala Dam Project which has the ultimate obtct of
generating electrical power to run different business and industries,125 the telephone 26and
telegraph,127 Hindustan Dwakhana128, Security Paper Mills Hoshangabad 129, services like
supply of water, electricity, lift, sanitation, made available to tenants by company,13° National
Remote Sensing Agency having a systematic activity or organization with cooperation
between it and its employees,131 the Baikunth Nath Debasthan Mandir Trust,132 Sahkari
Bhumi Vikas Bank,133 UP Scheduled Caste Finance and DeveloEment Corporation,1 34
barrage division under irrigation deparbnent of state governments,1 5 Railways,136 a society
formed for the purpose of protection, care and treabnent of old, infirm and injured cows,
calves, bulls etc. and also engaged in activities of selling milk, etc.,137 professional activities
of architects,138 Punjab State Tubewell Corporation,139 Indian Red Cross Society, Haryana
state branch,14° Kurukshetra University and persons employed therein as carpenters,141

116 Jaipur Milk Supply Scheme v. Labour Court, Jaipur, (1976) Lab, IC 863 (Raj.}.
117Management of Bihar Khadi Gramodyog Sangh v. State of Bihar, (1977} Lab. IC 466 (Patna).
118 State of Rajasthan v. Industrial Tribunal, Rajasthan, (1970) (Raj.} LW 137 (Raj.} followed in Mahesh
Chandra Sharma v. State of Rajasthan, (1974) Raj. LW 338 (Raj.}.
119 Madhya Pradesh Irrigation Karamchari Sangh v. State of Madhya Pradesh, (1972} 1 LLJ 374 (MP) (D.B.).
12°ChieJEngineer Irrigation, Orissa v. Harihar Patra, (1977), Lab. IC 1033 (Orissa).
121 Tea Board v. First Industrial Tribunal, West Bengal, (1978). Lab. IC (NOC) 179 (Calcutta).
122 Bihar Relief Committee v. State of Bihar, (1979) Lab. IC 445 (Patna).
123] N Singh & Co. Pvt. Ltd. v. SN Sexena,(1916) Lab. IC 840 (Allahabad}.
124 Management of Radio Foundation Engineering Ltd., v. State ofBihar, (1970) Lab. IC 1119 (Patna).
125 Anando Chandra Swam v. State of Orissa, (1973} 1 LLJ 508 (Orissa).
126 Tapan Kumar Jana v. Central Manager, Calcutta Telephones, (1981} Lab IC (NOC} 68 (Calcutta).
127 Kunjan Bhaskaran v. Sub-Divisional Officer, Telegraphs Changanassery, (1983} Lab. IC 135 (Kerala).
128 Shops and Commercial Workers' Union v. Management of Ayurvedic and Unani Tibbia College Board,
Delhi, (1980) Lab. IC 892 (Delhi}.
129 Security Paper Milts v. Hati Shankar Namdeo, (1980} 2 LLJ 61 (63} (M.P).
130 Karnami Properties Ltd. v. State of West Bengal, (1990) 2 Lab. IC 1677 (SC}.
131 R Sreenivasa Rao v. Labour Court, Hyderabad, (1990} 1 Lab. IC 175 (Andhra Pradesh}.
132 Workmen of Mis Baikuntha Nath Debasthan Trust v. State of West Bengal, (1990} 2 Lab. IC 1586.
133 Prabhudayal v. Alwar Sek]iari Bhumi Vikas Bank, (1990} Lab. IC 944 (Rajasthan}.
134 Nathaniel Nasib v. UP. Scheduled Caste Finance & Development Corporation Ltd., (1989} 2 Lab. IC 2276

(Allahabad}.
135 Executive Engineer, Anandpur Barrage Division v. President, Work Charged & NM R Employees Union

Salinla, (1989} Lab. IC NOC 130 (Orissa).

136 Basant Lal v. Div. Mechanical Engineers (G.W.) Rly Kathiar, (1977} (3) LLJ 154 (Patna).
137 The Bombay Pinjrapole Bhuleswar v. The Workmen, AIR (1971} SC 2422.
138 G C Sharma Sons v. R K Baveja, (1972} 2 LLJ 475 (Delhi}.
139 Rajesh Garg v. The Management of the Punjab State Tubewell Corporation, (1984). SLJ (P & H} 693.
140 Indian Red Cross Society Haryana State v. The Additional Labour Court, Chandigarh. (1992} (1) PLR 121
(P &H}.
141 Sumer Chand v. The Presiding Officer, Labour Court, Ambata, (1990} (1) SLJ 91.
230 • Industrial Relations and Labour Laws

Industrial Development Centre for Tools and Dyes, Jagadhri providing technical guidance,
testing and certification facilities apart from providing services and facilities such as heart
treabnent, anodizing, etc., charge money for the use of various machines on hourly basis,142
Central Research Institute for Yoga 143, lac manufacturing factory run by the deparbnent
of forest,1 44 irrigation deparbnent of the government of the state 145, periodic maintenance,
repair of hand pumps installed by Panchayat Samitis146 Haryana Woollen Development
Corporation147 and rural engineering services148 were held to be 'industry' under Section 2 G).
On the other hand, activities/ establishments such as octroi department of
municipality,149 Central Institute of Fisheries150, works deparbnent of government,151
judicial deparbnent152 drought relief work by the government153, retail cloth shop run by
two partners with the assistance of one salesman,1 4 firm or trademarks agents;15 trust of
a temple 156 a building let out on rent by a palace administration board managing the estate
of royal family for the benefit of the junior members of the family, 157 the activities of the
Farashkhana and Baggikhanna including Kapatdwara, horse breeding and riding section
of the city palace of were held not be 'industry' under Section 2 G).

U. Response of the [First] National Commission on Labour

The scope of the word 'industry' also continues to engage public attention. In 1966, the
Government of India appointed the National Commission on Labour, inter alia, to report
on changes in the existing labour legislation.
After a very thorough investigation of the industrial law, the Commission submitted
its recommendation, in 1969. In respect to the definition of 'industry', the Commission
recommended that:

In our view, there appears to be no valid ground for narrowing the scope of the
definition of 'industry' as it stands today. In fact, there is a case for enlarging its
scope so as to cover teaching or educational institutions or institutes, universities,
professional firms and offices etc., whose employees are at present denied the

142 Harjinder Singh v. State of Haryana, (1992) (1) PLR 186 (P & H).
143 Suresh Kumar v. Union of India, (1990) Lab. IC NOC 75 (Delhi).
144 Binoy Kumar v. State of Bihar, (1983) Lab IC 1884 (Patna) (F.B.).
145 Des Raj v. State of Punjab, AIR 1988 SC 1182, 1997 LLR 889.
146 Akhil Raj Rajya Hand Pump Mistries Sangthan v. State of Rajasthan, (1994) Lab. IC 345.
147 Haryana Woollen Development Corporation v. PO I.T cum LC, (1993) 2 LLJ 318.
148 State of UP v. Presiding Officer, Labour Court, (1997) LLR 558 (H.C. Alld.).
149 Abdul Wahab Shaikh Lai Bhai v. GE Patankar, (1980) Lab. IC 623 (Bombay).
150 P Jost v. Director Central Institute of Fisheries, (1986) Lab. IC 1564, (Kerala).
151 Executive Engineer, Rational Highway Division v. R.P.F. Commissioner, (1988) Lab. IC 690 (Orissa).
152 Govindbhai Kanabhat Mari v. N K Desai, (1988) Lab IC 505 (Gujarat).
153 ] J Shrimali v. District Development Office, Jila Panchayat, (1989) Lab. IC 689 (Gujarat).
154 P M Murugappa Mudaliar, Rathina Mudaliar & Sons v. P Raju Mudaliar, (1965) 1 LLJ 489 (Mys.). See

also the decision of division bench of the Delhi High Court in Om Prakash Jhumman Lai v. Labour
Court, (1970) 1 LLJ 43 (Delhi). The view taken in this case that activity where one man is employed
is 'industry' is incorrect because it loses sight of 'organized labour force' and 'collectiveness' of
labour in the law of industrial disputes.
155 William Fredric De Pennmg v. Therd Industrial Tribunal, AIR 1959 Cal 749.
156 Indravadan N Adhvaryu v. Laxminarayan Dev Trust through Chief Executive Kothari, (2011) LLR 262.
157 Palace Administration Board v. State of Kerala, (1960) 1 LLJ 178.
 Arena of Interaction and Partidpants in Industrial Disputes • 231

protection of the provisions of the Industrial Disputes Act. In saying so, we are
not unmindful of the fact that the problem of industrial relationship pertaining
to the administration of teaching institutions and universities presents several
distinctive features and they will have to be carefully considered before such
institutions are brought within the purview of the definition of 'industry'. The
autonomy of the universities is a very important concept which is respected in all
democratic countries. Besides, the salaries of teachers employed by the university
or colleges affiliated to it are, in some cases, determined not be the university or
the colleges on the one hand and the teachers on the other, but the University
Grants Commission and state governments and the Union Government also
come into the picture. The staff employed by educational institutions broadly
consists of two categories, viz., administrative and teaching; and the problems
of these two categories of staff may not always be the same or identical. That
is why we would suggest that the extension of the scope of the definition of
'industry' should be made by stages in a phased manner over a reasonable period,
depending upon the administrative arrangements to meet the requirements of
the law and upon the consideration of a number of other relevant factors.
Continuing it said:

Besides, it is necessary to emphasize that if the scope of the concept of 'industry'

has to be expanded to cover teaching institutions and universities, it may
become necessary to provide for a different set-up to deal with the problems
or disputes which may arise in such institutions. As we have just pointed out,
these institutions have certain special distinctive characteristics, and even if
employees working in them are, in future, included within the definition of
'workmen', care will have to be taken to see that a special procedure, self-
contained in character, is provided for dealing with grievances or industrial
disputes raised by the employees and a special machinery set up in this behalf.
But these are matters of detail and we do not propose to deal with them. 158
The Commission recommended that government should consider whether in respect
of such hospitals and non-profit making philanthropic institutions which devote themselves
to humanitarian work, a special procedure could not be devised to avoid hardship to the
community and at the same time, give satisfaction to the workers engaged therein.

V. Parliament's Disapproval of Judicial Response

The Parliament through the Industrial Disputes (Amendment) Act, 1982, disapproved of the
widening of the coverage of the term 'industry' by the Supreme Court in Bangalore Water
Supply and Sewerage Board v. Rajappa (supra), by excluding a number of activities such as
hospitals, educational institutes, scientific and research institutions, charitable, social and
philanthropic organizations and institutions performing sovereign functions. Thus, Section
2 G) of Industrial Disputes (Amendment) Act, 1982, defines the term 'industry' to mean:

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

158 The Government of India, Report of the National Commission on Labour, (1969) 482.
232 • Industrial Relations and Labour Laws

or distribution of goods or services with a view to satisfying 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, and
includes-
(a) any activity of the dock labour board established under Section 5-A of
the Dock Workers (Regulation 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 -

(a) 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 purposes 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
(b) hospitals or dispensaries, or
(c) educational, scientific, research or training institutions, or
(d) institutions owned or managed by organizations wholly or substantially
engaged in any charitable, social or philanthropic service, or
(e) khadi or village industries, or
(f) and activity of the government relatable to the sovereign functions of the
government, all the activities carried on by the deparbnent of the Central
Government ... activities ... dealing with defence research, atomic energy
and space, or
(g) any domestic service, or
(h) any activity, being a profession practised by an individual or body of
individuals, if the number of persons employed by an individual or body
of individuals in relation to such profession is less than ten, or
(i) any activity, being an activity carried on by a cooperative society or a club
or any other like body of individuals, if the number of persons employed
by the cooperative society, club or other like body of individuals in relation
to such activity is less than ten.
However, almost 30 years have elapsed since the aforesaid amendment came on the
statute book, but it has not been enforced till the date. This has led the Supreme Court to
observe that 'we have not been able to gather as to why even 6 years after the amendment
has been brought to the definition of industry in Section 2G) of the Act, the same has not been
brought into force. The Court on more than one occasion, has indicated that the position
should be clarified by an appropriate amendment and when keeping in view the opinion
of this Court, the law was sought to be amended, it is appropriate that the same should be
 Arena of Interaction and Partidpants in Industrial Disputes • 2 3 3

brought into force as such or with such further alteration as may be considered necessary and
the legislative view of the matter is made known and the confusion in the field is cleared up.'159

Issuance of Writ of Mandamus for giving effect to Amendment in ID Act

Can a High Court issue a writ of mandamus to enforce clause (c) of the Industrial Disputes
(Amendment) Act, 1982 which excludes, inter alia 'charitable trust' from the definition of
'industry'? This issue was raised in Union of India v. Shree Gajanan Maharaj Sans than. 160 The
Supreme Court answered the question in negative. The Court had earlier directed the Union
of India to examine and decide within six months as to when it would be feasible to give
effect to sub-section (2) of Section 1 of the Industrial Disputes (Amendment) Act, 1982. In
response, the Central Government filed an affidavit stating the various steps taken by it
which are as follows:
(i) The Industrial Disputes (Amendment) Bill, 1982 was introduced to amend the definition
of the term 'industry'.
(iz) The government also introduced the Hospitals and Other Institutions (Settlement of
Disputes) Bill and Education Institution (Settlement of Disputes) Bill in the Rajya Sabha.
The former bill was enacted but the latter bill was not pursued because of opposition
to various provisions. As a consequence, the amended definition of the term 'industry'
could not be brought into effect in the absence of alternative grievance machinery for
employees in hospitals, educational institutions, etc., who would have been denied
the protection of the Industrial Disputes Act, 1947.
(iii) Another attempt was made by introducing, the Hospitals and other Institutions
(Redressal of Grievances of Employees) Bill but it lapsed with the dissolution of the
Lok Sabha in 1989.
(iv) The bipartite committee for new industrial relations law under the chairmanship
of G Ramanujam was set up by the government for formulation of comprehensive
industrial relations law but the committee member were not unanimous on the
definition of the term 'industry'.
(v) A proposal for modification of the definition of the term 'industry' was placed in the
standing labour committee. Thereafter, the issue was referred to the new Bipartite
committee to formulate a comprehensive Industrial Relations Bill. It was wound up
as no consensus emerged.
(vi) The Ministry of Labour prepared a proposal to amend the Industrial Disputes Act,
1947 including definition of 'industry' and the proposal was sent to committee of
secretaries.
(viz) In the meeting of Committee of Secretaries (COS) on 15 February 1999, it was agreed
that an inter-ministerial group would be set up by the Ministry of Labour of finalize the
proposals. Accordingly, an inter-ministerial group was set up with the representatives
of 13 ministries/ deparbnent.
(viii)Meetings of the inter-ministerial group with the representatives of all the 13 ministries/
deparbnentwere held on 14 May 1999 and 11 January 2001 to consider the amendment
proposals.

159 Des Raj v. State of Punjab, 1988 Lab. IC 1713; see also State of UP v. Presiding Officer, Labour Court,
(1997) LLR 528.
160 (2002) LLR 711.
234 • Industrial Relations and Labour Laws

(ix) Meetings of COS under the chairmanship of the cabinet secretary were held on
15 February 1999, 3 November 1999, and 21 January 2000 to consider the amendment
proposals.
(x) The proposal was revised/recast on the basis of recommendations made by the group
and inter-ministerial committee of secretaries.
(xz) Group of ministers was constituted under the chairmanship of Dy. Chairman, Planning
Commission to suggest the amendment proposals. The group consisted of ministers
of nine ministries.
(xii) The group of ministers had met on 11 April 2000, 12 May 2000 and 27 May 2000.
(xiii)The proposal to amend the Industrial Disputes Act was again revised on the basis of
recommendations of group ministers.
(xiv)After finalizing the proposals, it was sent to Ministry of Law, Justice and Company
Affairs for the opinion of deparbnent of legal affairs which has concurred with the
proposals and a draft bill is being drafted by the legislative deparbnent, Ministry of
Law, Government of India.
The Supreme Court, in view of the above, held that it would not be feasible for
government to set out any definite day as to when they can take action as indicated by the
High Court and therefore, the order made by the High Court cannot be given effect. The
court added that though there has been a sense of urgency on the part of the government in
this regard, it has not been able to take a decision under the circumstances set forth by then
in which writ of mandamus has been issued to the government to take action and to indicate
as to when it would be feasible to appoint a date for bringing into force the amending Act.
In other respects, the order made by the High Court was maintained by the Supreme Court.

W. Current Confusion
Irrigation Department - If Industry
While in Des Raj v. State of Punjab 161 , the Supreme Court held that irrigation deparbnent was
an 'industry' under Section 2 G), a two-judge bench of the Supreme Court in Executive Engineer,
StateofKarnatakav. KSoonasetty162 following the decisions in Union ofindiav. Jai Narain Singh 163
and State of HP v. Suresh Kumar Varma 164 held it to be not an 'industry'. The Court ruled:

The function of public welfare of the State is a sovereign function. It is the

constitutional mandate under the Directive Principles, that the government
should bring about welfare State by all executive and legislative actions.
Under these circumstances, the State is not an 'industry' under the Industrial
Disputes Act.
The Allahabad High Court in State of Uttar Pradesh v. Industrial Tribunal IV, Agra
& Another 165 following the decision of the Supreme Court in General Manager Telecom
v. A Sriniwasa 166 held that irrigation deparbnent of the state is not an industry. But the

161 (1988) Lab IC 1713.

162 (1997) LLR 889.
163 (1995) Supp 4672.
164 JT 1996 (2) 455.
165 (2002) LLR 609.
166 1998 (78) FLR 143 (SC).
 Arena of Interaction and Partidpants in Industrial Disputes • 235

Patna High Court in State of Bihar v. Gajadhar Singh 167 held that the deparbnent ofirrigation
is an 'industry' under Section 2G) of the Industrial Disputes Act, 1947.

Postal and Telecom Departments - If Industry

In Sub Divisional Inspector of Post Vaikam v. Theyyam Joseph 168, a question arose whether the
establishment of the Sub-divisional Inspector of Post was an 'industry' under the Industrial
Disputes Act, 1947. A two-judge bench of the Supreme Court answered the question in
negative and held that the functions of the postal deparbnent are part of the sovereign
functions of the State and it is, therefore, not an industry within the definition of Section
2G) of the Industrial Disputes Act, 1947. Incidentally, this decision was rendered without
any reference to the seven judge bench decision in Bangalore Water Supply case.
Again in Bombay Telephone Canteen Employees Association, Prabhadevi Telephone Exchange
v. Union of India 169, the Supreme Court held that workmen employed in the deparbnental
canteen of Telephone Nigam Limited holding civil posts were not workmen within the
meaning of the Industrial Disputes Act.
In General Manager, Telecom v. S Srinivasa Rao 170, the question whether postal and
telecom deparbnent was an 'industry' was placed specifically before the bench of three
judges was whether the telecom deparbnent of the Union of India was an 'industry'. A
three judge bench of the Supreme Court answered the question in affirmative and observed:

With respect, we are unable to subscribe to this view for the obvious reason
that it is in direct conflict with the seven judge bench decision in Bangalore
Water Supply case (supra) by which we are bound. It is needless to add that
it is not permissible for us, or for that matter any bench of lesser strength,
to take a view contrary to that in Bangalore Water Supply case (supra) or to
bypass that decision so long as it holds the field. Moreover, that decision was
rendered long back, nearly two decades earlier and we find no reason to think
otherwise. Judicial discipline requires us to follow the decision in Bangalore
Water Supply case (supra) and Bombay Telephone Canteen Employees' Association
case (supra) cannot be treated as laying down the correct law.
In Senior Superintendent of Post Office, Postal Department, Ludhiana v. Baljit Singh 171 , the
Punjab and Haryana High Court held that postal deparbnent is an 'industry' under Section
2G) of IDA.

National Remote Sensing Agency

In National Remote Sensing Agency v. Additional Tribunal-cum-Additional Labour Court,
Hyderabad 172, the Andhra Pradesh High Court held that the National Remote Sensing
Agency which carries on systematic activity in cooperation with employees for production
and distribution of material services meant to satisfy human wants and wishes does not

167 (2012) 1 LLJ 75.

168 (1996) 8 SSC 489.
169 (1997) 6 SSC 723.
170 AIR 1998 sec 657.
171 2012 (1) SLR 199.
172 (2003) LLR 108.
236 • Industrial Relations and Labour Laws

discharge any sovereign functions and is therefore, an industry under Section 2G) of the
Industrial Disputes Act. The court also held that absence of profit motive is not a decisive
factor.

Research Laboratory - If Industry

In Physical Research Laboratory v. KG Sharma,173 a question arose whether Physical Research
Laboratory hereinafter referred to as PRL, is an 'industry' within the meaning of Section 2G)
of the Industrial Disputes Act. The facts of the case were that the respondent was appointed
by PRL. He was transferred to photography documentation services on a post which was
non-technical and administrative. On 31 December 1978 on attaining the age of 58 years,
he was retired from service with effect from 1 January 1979. Aggrieved by his retirement
at the age of 58 years and not at 60, he filed a writ petition in the High Court of Gujarat but
it was withdrawn. He then filed a complaint before the labour commissioner who, on the
basis thereof, made a reference to the labour court, Ahmedabad. The labour court held that
PRL is carrying on, in an organized and systematic manner, the activity of research in its
laboratory by active cooperation between itself and its employees and the discoveries and
inventions made would be eligible for sale, hence PRL is an industry. It accordingly held that
the respondent was entitled to continue in service up to the age of 60 years. As the respondent
had already completed the age of 60 years by then, no order of reinstatement was passed but
only back wages for those two years were ordered to be paid. This decision was upheld by
the High Court. Thereupon, the appellant filed an appeal by special leave before the Supreme
Court. It was urged on behalf of the appellants that PRL being a purely research institute of
the Central Government, engaged in carrying out fundamental research regarding the origin
and evolution of the universe and the abnosphere of the earth is not an 'industry' as defined
by Section 2 G). Further, it carried on research function and not a commercial venture, hence
it is not an industry. Accepting the contention, the Supreme Court observed:

The question whether PRL is an 'industry' under the I D Act will have to be
decided by applying the principles laid down in Bangalore Water Supply case but,
at the same time, it has to be kept in mind that these principles were formulated
as this Court found the definition of the word 'industry' vague and rather
clumsy, vaporous and tall-and-dwarf. Therefore, while interpreting the words
'undertaking', 'calling' and 'service'whichareofmuchwiderimport, the principle
of noscitur a sociis was applied and it was held that they would be 'industry' only
if they are found to be analogous to trade or business. Furthermore, an activity
undertaken by the government cannot be regarded as 'industry' if it is done in
discharge of its sovereign functions. One more aspect to be kept in mind is that
the aforesaid principles are not exhaustive either as regards what can be said to
be sovereign functions or as regards the other aspects dealt with by the Court.
The Court added:

PRL is an institution under the Government of India's deparbnent of space.

It is engaged in pure research in space science. The purpose of the research is
to acquire knowledge about the formation and evolution of the universe but
the knowledge thus acquired is not intended for sale. The material on record

173 (1997) 4 sec 257 (SC).

 Arena of Interaction and Partidpants in Industrial Disputes • 2 3 7

further discloses that PRL is conducting research not for the benefit or use of
others. Though the results of the research work done by it are occasionally
published, they have never been sold. There is no material to show that the
knowledge so acquired by PRL is marketable or has any commercial value. It
has not been pointed out how the knowledge acquired by PRL or the results of
the research occasionally published by it will be useful to persons other than
those engaged in such type of study. The material discloses thatthe object with
which the research activity is undertaken by PRL is to obtain knowledge for
the benefit of the deparbnent of space. Its object is not to render services to
others nor in fact it does so except in an indirect manner.
Neither from the nature of its organization nor from the nature and character of the
activity carried on by it, can it be said to be an 'undertaking' analogous to business or
trade. It is not engaged in a commercial or industrial activity and it cannot be described
as an economic venture or a commercial enterprise as it is not its object to produce and
distribute services which would satisfy wants and needs of the consumer community. It is
more an institution discharging governmental functions and a domestic enterprise than a
commercial one. PRL is not an industry even though it is carrying on the activity of research
in a systematic manner with the help of its employees as it lacks that element which would
make it an organization carrying on an activity which can be said to be analogous to the
carrying on of a trade or business because it is not producing and distributing services which
are intended or meant for satisfying human wants and needs, as ordinarily understood.

Forest Department - If industry

The bench of three judges in Chief Conservator of Forests v. Jagannath Maruti Kondhare 174 held
that 'Social Forestry Deparbnent' is covered by the definition of 'industry' whereas the
two-judge bench of the Supreme Court in State of Gujarat v. Pratamsingh Narsingh Parmar, 175
the question for consideration was whether the forest deparbnent in the state of Gujarat
where the respondent was appointed as a clerk could be held to be an 'industry' under
the Act so that an order of termination in contravention of Section 25F of the Act would
get vitiated. The Supreme Court held that the forest deparbnent to which the respondent
had been recruited could not be held to be 'industry' within the meaning of Section 2G) of
the Act and as such, the compliance with Section 25F of the Act did not arise. However, in
Range Forest Officer v. Galabhai Kalabhai Damor176, the Gujarat High Court held the activities
of the forest deparbnent engaged in processing of sandalwood at Tiruppattur Sandalwood
Depot cannot be said to be in discharge of sovereign function of the state. It is nothing but
a commercial activity intended to regulate and control the movement of sandalwood to
augment the income of the state and therefore, an 'industry' under Section 2G) of IDA.

Zoological Park
The Allahabad High Court in State of Uttar Pradesh v. Jai Pal Singh & Another 177 held that
Kanpur Zoological Park is an 'industry' under Section 2G) of the ID Act.

174 (1996) 2 SSC 293.

175 (2001) 8 SSC 713.
176 (2011) II CLR 528 (HC Gujarat).
177 (2002) LLR 444.
238 • Industrial Relations and Labour Laws

Radio and Doordarshan - If Industry

In All India Radio v. Santosh Kumar and Another,178 the question arose whether All India Radio
and Doordarshan Kendras are industries within Section 2G) of the Industrial Disputes Act,
1947. The contention of the appellant was that All India Radio and Doordarshan Kendra
discharge sovereign functions of the State and they are not industries within the meaning
of Section 2 G) of the ID Act. The Supreme Court dismissed the appeal and held:

The functions which are carried on by All India Radio and Doordarshan Kendra
cannot be said to be confined to sovereign functions as they carry on commercial
activity for profit by setting commercial advertisements telecast or broadcast
through their various kendras and stations by charging fees .... Consequently,
it must be held that the appellant All India Radio as well as Doordarshan are
industries within the meaning of Section 2G) of the Act and the said definition is
operative being applicable at present and as existing on the statute book as on date.
Joint Legal Remembrance and Director Litigation, Law Department - if Industry
In State of Rajasthan v. Ganeshi Lal 179 a question, inter alia, arose whether the law
deparbnent is an 'industry' under the Industrial Disputes Act, 1947. The labour court
answered the question in affirmative. The single judge of the High Court approved the
decision of the labour court. On appeal in the Supreme Court, it was argued by the State that
by no stretch of imagination the law deparbnent of the state could be considered to be an
'industry'. It was also submitted that the question whether government deparbnents can be
treated as an 'industry' was under consideration of the larger bench of the Supreme Court. The
Court held that the labour court and the High Court had not even indicated as to how the law
deparbnent is an 'industry'. It had merely stated that in some cases, irrigation deparbnent and
public deparbnents have been held to be covered by the definition of 'industry'. However,
this line of view cannot be applied to the law deparbnent of the government.

X. Re-examination of the Decision in Bangalore Case

In Coir Board Ernakulam v. Indira Devi P S,180 the two-judge bench of the Supreme Court
was called upon to examine whether the appellant, Coir Board, is an industry under the
Industrial Disputes Act, 1947. In this case, Coir Board set up under the Coir Industry Act,
1953 discharged certain temporary clerks and typists. The discharged employees claimed that
their services could only be terminated in accordance with the provisions of the Industrial
Disputes Act, 1947. The Kerala High Court held that the Coir Board is an 'industry' under
the Industrial Disputes Act, 1947. On appeal, the Supreme Court observed:

Looking to the uncertainty prevailing in this area and in the light of the experience
of the last two decades in applying the test laid down in the case of Bangalore
Water Supply and Sewerage Board (supra), it is necessary that the decision in
Bangalore Water Supply and Sewerage Board's case (supra) be re-examined. The
experience of the last two decades does not appear to be entirely happy. Instead of
leading to industrial peace and welfare of the community (which was the avowed

178 (2003) LLR 9.

179 (2008) 2 sec 533.
180 (1998) 78 FLR 845 (SC).
 Arena of Interaction and Partidpants in Industrial Disputes • 239

purpose of artificially extending the definition of industry), the application of

the Industrial Disputes Act to organizations which were, quite possibly, not
intended to be so covered by the machinery set up under the Industrial Disputes
Act, might have done more damage than good, not merely to the organizations
but also to employees by the curtailment of employment opportunities.
Undoubtedly, it is of paramount importance that a proper law is framed to promote
the welfare of labour employed in industries. It is equally important that the welfare of
labour employed in other kinds of organizations is also promoted and protected. But the
kind of measures which may be required for the latter may be different and may have to
be tailored to suit the nature of such organizations, their infrastructure and their financial
capacity as also the needs of their employees.
The elimination of profit motive or a desire to generate income as the purpose of
industrial activity has led to a large number of philanthropic and charitable activities being
affected by the Industrial Disputes Act. In a number of cases, where the organization is run
by voluntary social workers, they are unable to cope with the requirements of Industrial
Disputes Act. This has led to cessation of many welfare activities previously undertaken by
such organizations which has deprived the general community of considerable benefit and
the employees their livelihood. There are many activities which are undertaken not with a
view to secure any monetary returns-whether one labels it as livelihood, income or profit
but for other more generous or different motives. Such activities would not normally be
labelled as industrial activities but for the wide interpretation given judicially to the term
industry in the Industrial Disputes Act. For example, a number of voluntary organizations
run workshops in order that the poor and more particularly poor or destitute women may
earn some income. Voluntary welfare organizations organize activities like preparation of
spices, masalas, pickles so that they secure small orders from industries for poor women.
A small number of persons were employed to assist in the activities. The income earned by
these activities was distributed to the women who were given such work. Other voluntary
organizations organized tailoring or embroidery classes or similar activities for poor women
and provided an outlet for the sale of the work produced by them. These persons would
otherwise have found it impossible to secure a market for their products. Such organizations
are not organized like industries and they do not have the means or manpower to run them
as industries. A large number of such voluntary welfare schemes have had to be abandoned
because of the wide interpretation given to the term 'industry'.
Apart from above activities, there may be other activities also which are undertaken in
the spirit of community service, such as charitable hospitals where free medical services and
free medicines may be provided. Such activities may be sustained by free services given by
professional men and women and by donations. Sometimes, such activities may be sustained
by using the profits in the paid section of that activity for providing free services in the free
section. Doctors who work in these hospitals may work for no returns or sometimes, for very
nominal fees. Fortunately, philanthropic instinct is far from extinct. Can such philanthropic
organizations be called industries? The definition needs re-examination so that while the
workers in an industry have the benefit of industrial legislation, the community as such
is not deprived of philanthropic and other vital services which contribute so much to its
well-being. Educational services and the work done by teachers in educational institutions,
research organizations, professional activities, or recreational activities, amateur sports,
promotion of arts-fine arts and performing arts, promoting crafts and special skills, all
these and many other similar activities also require to be considered in this context.
240 • Industrial Relations and Labour Laws

In fact, in 1982, the legislature itself decided to amend the definition of industry under
the Industrial Disputes Act, 1947 by enacting the Amending Act 46 of 1982 and curtailing
the coverage of 'industry'. Unfortunately, despite the legislative mandate, the definition
has not been notified by the executive as having come into force.
Since the difficulty has arisen because of the judicial interpretation given to the
definition of industry in the Industrial Disputes Act, there is no reason why the matter should
not be judicially re-examined. In the present case, the function of the Coir Board is to promote
coir industry, open markets for it and provide facilities to make the coir industry's products
more marketable. It is not set up to run any industry itself. Looking to the predominant
purpose for which it is set up, we would not call it an industry. However, if one were to
apply the tests laid down by Bangalore Water Supply and Sewerage Board's case (supra), it is
an organization where there are employers and employees. The organization does some
useful work for the benefit of others. Therefore, it will have to be called an industry under
the Industrial Disputes Act.
We do notthink that such a sweeping test was contemplated by the Industrial Disputes
Act, nor do we think that every organization which does useful service and employs people
can be labelled as industry. We, therefore, direct that the matter be placed before the Hon'ble
Chief Justice of India to consider whether a larger bench should be constituted to re-consider
the decision of this Court in Bangalore Water Supply and Sewerage Board (supra).
The three-judge bench presided over by the Chief Justice in Coir Board Ernakulam, Kerala
State v. Indira Devi PS and others 181 ruled that the judgement delivered by seven learned
judges of this Court in Bangalore Water Supply case does not require any reconsideration on a
reference being made by a two-judge bench of this Court, which is bound by the judgement
of the larger bench.
A Constitution bench of five judges of the Supreme Court was constituted in State of
U.P. v. Jai Bir Singh 182 on a reference made by a bench of three judges in State of U.P. v. Jai Bir
to give findings in an apparent conflict between the decisions of two benches of this Court
in Chief Conservator ofForests v. Jagannath Maruti Kondhare of three judges and State of Gujarat
v. Pratamsingh Narsinh Parmar of two judges. The bench in its judgement dated 8 May 2005
observed that in construing the definition clause and determining its ambit, one has not
to lose sight of the fact that in activities like hospitals and education, concepts like right
of the workers to go on 'strike' or the employer's right to 'close down' and 'layoff' are not
contemplated because these are services in which the motto is 'service to the community'. If
the patients or students are to be left to the mercy of the employer and employees exercising
their rights at will, the very purpose of the service/activity would be frustrated. Hence, it
is not necessary to say anything more and leave it to the larger bench to give such meaning
and effect to the definition clause in the present context with the experience of all these years
and keeping in view the amended definition of 'industry' kept dormant for 23 long years.
The cases were, therefore, placed before the Chief Justice of India for constituting
a suitable larger bench for reconsideration of the judgement of Bangalore Water Supply &
Sewerage Boards.

181 (1999) 1 LLJ 319.

182 (2005) 5 SSC 1.
Workmen 16
Section 2 (s) of the Industrial Disputes Act, 1947, defines 'workman' to mean:

Any person (including an apprentice) employed in any industry to do any

manual, unskilled, skilled, technical, operational, clerical or supervisory work
for hire or reward, whether the terms of employment be express or implied, and
for the purposes of any proceeding under this Act in relation to an industrial
dispute, includes any such person who has been dismissed, discharged or
retrenched in connection with, or as a consequence of, that dispute, or whose
dismissal, discharge or retrenchment has led to that dispute, but does not
include any such person -
(i) who is subject to the Air Force Act, 1950, or the Army Act, 1950, or the
Navy Act, 1957; or
(ii) who is employed in the police service or as an officer or other employee
of a prison; or
(iii) who is employed mainly in a managerial or administrative capacity; or
(iv) who, being employed in a supervisory capacity, draws wages exceeding
ten thousand rupees per mensem or exercises, either by the nature of
the duties attached to the office or by reason of the powers vested in
him, functions mainly of a managerial nature. 1
Broadly speaking, the definition requires that 'workman' must be:
(a) person, (b) employed, (c) in any industry, (d) to do the specified type of work,
(e) for hire or reward, but excludes certain specified categories of persons.
The scope of the aforesaid expression has been the subject-matter of judicial
interpretation in a series of decided cases. Let us turn to examine the scope of the aforesaid
expressions.

1 Section 2(s) (vi) of the Industrial Disputes (Amendment) Act, 2010 has raised the wage limit to
tl0,000.
242 • Industrial Relations and Labour Laws

A. Person
The use of the word 'person' in the definition of 'workman' indicates the difference between
the coverage of the expression 'persons" employed in any 'industry' and 'workmen'. Further,
the words 'including an apprentice' extends the coverage of the 'person employed in any
industry'. Moreover, to the extent to which the expression 'workman' includes:

any such person who has been dismissed, discharged or retrenched in

connection with, or as a consequence of, that dispute, or whose dismissal,
discharge or retrenchment led to that dispute ...
is wider than the expression 'person employed in any industry'.

B. Employed
The word' employed', however, is susceptible to two meanings: (a) in a broader sense, it is a
synonym of'engaged' or 'occupied', and (b) in a restricted sense, it involves the connotation
of the master-servant relationship. A question, therefore, arises as to which of these two
meanings provides the key to the interpretation of the phrase 'person employed in any
industry'. The Supreme Court in Dharangadhra Chemicals Works Ltd v. State of Saurashtra2 has,
however, interpreted the term 'workman' in a restricted sense. In this case, the company is
a lessee of the salt works and held licence for the manufacture of salt on the land. The salt
is manufactured from rain water which soaks down the surface and becomes impregnated
with saline matter. The entire area was divided into small plots called pattas. Each agarias
(who were a class of professional labourers) were allotted a patta which was renewed from
year to year. The company paid each agarias f400 to meet his initial expenses. The agarias
levelled the land and enclosed the sink well in them. The brine was then brought to the
surface and collected in reservoirs and crystals were prepared. If the salt crystals were found
of a prescribed quality, the company made payment to agarias. The salt which was not of
prescribed quality was rejected. The agarias were neither allowed to remove nor sell the salt
rejected by the company. The company employed a salt superintendent to supervise and
control all stages of the manufacture of salt. The salt manufactured by the company was
used partly for production of chemicals and the rest was sold.
The agarias worked themselves, along with members of their families and were free to
engage extra labourers on their own account. No hours of work were prescribed. Neither
muster rolls were maintained, nor working hours were controlled by the masters. There
were no rules as regards leave or holidays. Agarias were free to go out of the factory after
making arrangement for the manufacture of salt. When monsoon began, the agarias returned
to their villages to take up agricultural work.
In 1950, an industrial dispute arose between the company and the agarias over the
conditions of service which was referred to by the appropriate government to the industrial
tribunal for adjudication. The company contended that agarias were not 'workmen'. The
company, after unsuccessfully appealing to the labour appellate tribunal and moving the
High Court of Saurashtra for a writ under Article 226, appealed to the Supreme Court. A
question arose whether the agarias working in the salt works of the company were workmen
within the definition of Section 2(s). Justice Bhagwati, speaking for the Court observed:

2 AIR 1957 SC 264.

 Workmen• 243

The essential condition of a person being a workmen within the terms of

this definition is that he should be employed to do the work in that industry,
that there should be, in other words, an employment of his by the employer
and that there should be the relationship between the employer and him as
between employer and employee or master and servant. Unless a person is
thus employed, there can be no question of his being a workman within the
definition of the term as contained in the Act. 3
Assuming that the definition of workman requires master-servant relationship, a
question arises as to how to ascertain the existence of that relationship. In Dharangadhra
Chemical Works Ltd case, the Supreme Court ruled:

The principle according to which the relationship ... between employer and
employee or master and servant has to be determined is well settled. The test
which is uniformly applied in order to determine the relationship is the existence
of a right of control in respect of the manner in which the work is to be done. 4
The Court then drew a distinction between 'contract of service' and 'contract for
service':

In the one case the master can order or require what is to be done while in the other
case, he cannot only order or require what is to be done but how it shall be done. 5
The Court after considering several English cases and certain observations in Halsbury's
Laws of England observed:

The principle which emerges from above is that the prima facie test for the
determination of the relationship between master and servant is the existence
of the right in the master to supervise and control the work done by the servant
not only in the matter of directing what work the servant is to do but also the
manner in which he shall do his work. 6
Again, in Workmen of the Food Corporation of India v. Mis Food Corporation of India,7
the Supreme Court, construed the word 'employed' used in Section 2(s) of the Industrial
Disputes Act, 1947 and held:

The expression employed has at least two known connotations but as used
in the definition, the context would indicate 'that it is used in the sense of a
relationship brought about by express or implied contract of service in which
the employee renders service for which he is engaged by the employer and
latter agrees to pay him in cash or kind as agreed between them or statutorily
prescribed.' It discloses a relationship of command and obedience.
The above requirement of a 'workman' being employed as a servant, restricts the
coverage of the definition of 'workman' and excludes not only independent contractors

3 Dharangadhra Chemical Works Ltd v. State of Saurashtra, AIR 1957 SC 264 at 267.
4 Ibid.
5 Ibid.
6 Id. at 268.
7 (1965) 2 LLJ 4 (SC).
244 • Industrial Relations and Labour Laws

but also dependent entrepreneurs. 8 Thus, the decision renders millions of dependent
entrepreneurs legal orphans.
The aforesaid test was invoked and applied in Chintaman Rao v. State of Madhya
Pradesh 9 for determining whether a person is a 'worker' under the Factories Act, 1948. In
this case, a bidi factory entered into a contract with certain persons known as sattedars for
the supply of bidis. The sattedars were supplied tobacco and in some cases bidi leaves also.
The sattedars were neither bound to work in the factory nor to prepare bidis themselves, but
could get them prepared by others. The sattedars in their turn collected bidis prepared by
the coolies and took them to the factory where they were stored and checked by 'workers'
of the factory and such lots as were rejected were taken back by sattedars to be re-made.
The management then made the payment to sattedars and not to 'workers' because they
were neither employed by the management (directly or indirectly) nor did they work in
the factory. This principle was reiterated and re-affirmed by the Supreme Court in State of
Kerala v. V M Patel. 10 The Court also emphasized that a right to control or supervise is one
of the tests for determining the relationship of master and servant.
The Supreme Court in Bridhichand Sharma v. First Civil Judge,11 relaxed the qualitative
and quantitative contents of the 'direction and control' test laid down in Dharangadhra
Chemical Works, Ltd. 12 In this case Bridhichand Sharma, the appellant, was the manager of
the bidi factory. The respondents worked in the factory. They were, however, at liberty to
come and go at their convenience anytime during the working hours in the factory subject to
the condition that if they came after midday, they were not given any work on that day and
consequently they lost their wages of that day. The payments to them were made on piece
rate basis. According to the standing orders of the company, a worker who remained absent
for eight days (without leave) could be removed. The payment of wages was made to them on
piece rate basis according to the amount of work done, and the bidis which did not come up
to a proper standard were rejected. It was in these circumstances that the Court held that the
employees were 'workers' under the Factories Act, 1948 and were not independent contractors.
Shankar Balaji Waje v. State of Maharashtra 13 distinguished Bridichand Sharma v. First
Civil Judge, Nagpur 14 on the facts and applied the criteria laid down in Chintaman Rao v. State
of Madhya Pradesh 15 for ascertaining whether respondent Pandurang was a 'worker' or an
independent contractor. The appellant was the owner and occupier of the bidi factory. The
respondent Pandurang rolled bidis in the factory for a number of days in 1957. After the
respondent worked for 70 days, the appellant terminated his services without paying him any
wages for 4 days and earned leave as required under Section 79(ii) of the Factories Act, 1948.
On these facts, a question arose whether the respondent was a worker or an independent
contractor. Justice Raghubar Dayal, while pronouncing the majority view, observed:

8 i.e., persons who though have no independent calling of their own work for the enterprise of another
and depend for their income on the hire or reward which they get in respect of their employment,
e.g., handloom weavers, cigar rollers, match box framers, steel trunk makers, goldsmiths and brass
workers, etc.
9 Chintaman Rao v. State of Madhya Pradesh, (1958) 2 LLJ 252 (SC}.
10 State of Kerala v. V M Patel, (1961) 1 LLJ 744 (SC).
11 Bridhichand Sharma v. First Civil Judge, (1961} 2 LLJ 86 (SC}.
12 Dharangadhra Chemical Works Ltd. case, AIR 1957 SC 264.
13 Shankar Balaji Waje v. State of Maharashta, 1962 1 LLJ 119 (SC}.
14 (1961} 2 LLJ 86 (SC).
15 (1958) 2 LLJ 252 (SC).
 Workmen • 245

There was no contract of service between the appellant and Pandurang. What
can be said atthe most is that whenever Pandurang wentto work, the appellant
agreed to supply him tobacco for rolling bidis and that Pandurang agreed to
roll bidis on being paid at a certain rate for the bidis turned out. The appellant
exercised no control and supervision over Pandurang. 16
Justice Subba Rao, however, took a contrary view. According to him, the question
raised in this appeal is directly covered by the judgement of this court in Bridhichand Sharma
v. First Civil Judge, Nagpur 17•
We now revert to the cases falling under Section 2(s) of the Industrial Disputes Act,
1947. DC Dewan Mohideen Sahib & Sons v. United Bidi Workers Union 18 has metthe hardship
caused by Dharangadhra Chemical Works by emphasizing that the principal employer does
not cease to be so merely because he employs workmen through intermediaries. It was
found that contractors took leaves and tobaccos from the management and employed
workers for manufacturing bidis. After bidis were prepared, the contractors delivered
them to the management. The workers took leaves to their homes and cut them there
but they rolled the bidis and filled them with tobacco only in 'contractors' factories'.
Neither any attendance register was maintained nor were there any prescribed working
hours. Sometimes, they informed the contractors and sometimes they did not, if they
remained absent. No action was taken against workers absenting themselves without
leave. The payment was made to them on piece-rate basis according to the amount of
work done 19 • The Court held that the so-called contractor was merely an employee or an
agent of the (management) ... and as such employed as workers to roll bidis on behalf of
the management. 20 Be that as it may, there has been a consistent demand of working class
to abolish the system of contract labour.
In Standard Vacuum Refining Co. of India Ltd v. Their Workmen 21 , the Supreme Court
was again confronted with this problem. In this case, contract labour was engaged in the
cleaning and maintenance work at the refinery. The work done by contract labour was
not only of perennial nature to be done everyday but the same type of work was done
in other similar industries by regular workmen. A dispute arose between the employer
and contractor's employees. The government referred the dispute to the tribunal. The
management questioned the jurisdiction of the tribunal to adjudicate upon the dispute
between employer and contractor's employees. The tribunal overruled the objection and
held that it had jurisdiction to decide such disputes. The tribunal also accepted the claim of
contractor's employees and directed abolition of contract labour. On appeal, the Supreme
Court ruled that the industrial tribunal should rest its decision not merely on theoretical or
abstract objections to contract labour but also on the terms and condition on which contract
labour is employed and the grievance made by the employees in respect thereof.
The Supreme Court accordingly confirmed the findings of the tribunal abolishing
contract labour. The Court also held that the dispute in the instant case was an industrial
disputes, because (a) the management had a community of interest with the contractor's

16 (1962) 1 LLJ 119 at 123.

17 (1961) 2 LLJ 86 at 126.
18 DC Dewan Mohideen Sahib & Sons v. United Bidi Worker's Union, (1964) 2 LLJ 633. (SC).
19 Id. at 638.
20 Ibid.
21 Standard Vacuum Refining Co. of India Ltd v. Its Workmen, (1980) 2 LLJ 233 (SC).
246 • Industrial Relations and Labour Laws

employees; (b) they had a substantial interest in the subject-matter of the dispute in the sense
that the class to which they belonged, namely, workmen was substantially affected thereby;
and (c) the management could grant relief to the contractor's employees.
The aforesaid view was re-affirmed 22 in a number of decided cases. The Supreme
Court in Punjab National Bank v. Ghulam Dastagir23 exploded the myth of the direction and
control test laid down in Dharangdhara Chemicals Ltd v. State of Saurashtra24 and Shivanandan
Sharma v. Punjab National Bank2 case applied in bidi cases decided by the Supreme Court.
In bidi cases, there was a common practice of using deceptive devices and the so-called
independent contractors were really agents of the management posing as independent
contractors for the purposes of circumventing the Factories Act, 1948 and like statutes
which compel management to meet certain economic and social obligations towards the
workers.
In the instant case, the area manager of the bank was allowed certain allowance
to engage a driver. The salary of the driver was paid by the area manager out of the
allowances paid to him. However, the jeep (which the driver had to drive), its petrol and
oil requirements and maintenance fell within the financial responsibility of the bank. The
area manager terminated the services of the driver. The driver challenged the justifiability
of the termination of his services. He raised a dispute with the bank. The government
referred the dispute to the industrial tribunal for adjudication. The tribunal held that (i)
the driver was employed by the bank and (ii) his termination of services was not justified
and was therefore, entitled for reinstatement. Aggrieved by the order, the bank filed an
appeal with the Supreme Court. The Supreme Court conceded that the proposition laid
down in Shivanandan Sharma is an exception26 but added that direction and control are the
telling factors27 to decide as to whether the driver in the present case was the employee of
the bank'. This test, according to the Court, did not 'exclude other factors also ... and ... the
questions in each case are determined on its own circumstances and decision in other cases
is rather illustrative than determinate'.28 The Court, however, held that the driver was not
a 'workman' because (z) there was no nexus between the bank and the driver and (ii) there
was no direction and control of the bank over the driver.
In Hussainbhai v. Alath Factory,29 the Supreme Court has tried to mitigate the hardship
caused by the decision in Dharangadhra Chemical Works by extending the coverage of 'worker'
to include 'dependent entrepreneur'. Justice Krishna Iyer laid down the following tests for
determining the scope of the term 'worker':

22 See Shibu Metal Works v. Their Workmen, (1966) 1 LLJ 717 (SC); National Iron & Steel Co. Ltd v. State
of W. Bengal, (1967) 2 LLJ 23 (SC); Vegoils Pvt. Ltd v. Workmen, (1972) 2 LLJ 567 (SC). The Parliament
gave its approval by adopting the Contract Labour (Regulation and Abolition) Act, 1970 to 'regulate
the employment of contract labour in certain establishments and provide for its abolition in certain
circumstances and matters connected therewith.'
23 Punjab National Bank v. Ghulam Dastagir, (1978) 2 SCR 358.
24 Dharangdhara Chemicals Ltd v. State of Saurashtra, op. cit. 262.
25 Shivanandan Sharma v. Punjab National Bank, op. cit.
26 Shivandandan Sharma v. Punjab National Bank, op. cit.
27 Ibid.
28 Shivandan Sharma v. Punjab National Bank, op. cit. Ibid.
29 Hussainbhai v. Alath Factory, (1978) 2 LLJ 397 (SC).
 Workmen • 24 7

Where a worker or group of workers labour to produce goods or services

and these goods or services are for the business of another, that other is, in
fact, the employer. He has economic control over the workers' subsistence,
skill and continued employment. It be, for any reason, chokes-off, the worker
is, virtually, laid-off. The presence of intermediate contractors with whom
alone the workers have immediate or direct relationship ex-contractu is of no
consequence when, on lifting the veil or looking at the conspectus of factors
governing employment, we discern the naked truth though draped in different
perfect paper arrangement that the real employer is the management, not the
immediate contractor. 30
The aforesaid decision would provide relief to millions of persons who had been
excluded from the purview of 'workmen'. It is submitted that the word 'employed', as
used in the Industrial Disputes Act, 1947, by itself, signifies 'engaged' and that wherever
necessary, the legislature has limited the scope of the word by using appropriate qualifying
expression.
Be that as it may, this line of thinking was referred to by the Constitution bench of
the Supreme Court in Steel Authority of India Ltd v. National Union Water Front Workers 31 •
The Supreme Court in Shining Tailors v. Industrial Tribunal 32 observed that' supervision
and control test was more suited to an agricultural society prior to Industrial Revolution
and during the last few decades, the emphasis in the field has shifted and no longer rests
exclusively or strongly on the question of control.'
In Ram Singh v. Union Territory, Chandigarh 33, the Supreme Court held that though
'control' is one of the important tests in determining employer-employee relationship
but it is not the sole test. All other relevant factors and circumstances are also required to
be considered including the terms and conditions of contract. The court also emphasized
the importance of an integrated approach in such matters. The court held that whether a
particular relationship between employer-employees is genuine or a smoke screen or a
camouflage through the mode of a contractor is essentially a question of fact to be determined
on the basis of (z) features of the relationship, (ii) the written terms of the employment, if any,
and (iii) the actual nature of employment and these questions could be raised and proved
only before an industrial adjudicator.
In General Manager (USD ), Bengal Nagpur Cotton Mills v. Bharat Lai34, the Supreme Court,
while dealing with the question whether the contract labourers are the direct employees
of the principal employer laid down two tests, namely (i) whether the principal employer
pays the salary instead of the contractor; and (ii) whether the principal employer controls
and supervises the work of the employee. Dealing with the onus, the Court added:

It is for the employee to aver and prove that he was paid salary directly by
the principal employer and not the contractor. The first respondent did not
discharge this onus. Even in regard to the second test, the employee did
not establish that he was working under the direct control and supervision

30 Ibid.
31 2001 LLR 961 (SC}.
32 1983 Lab. IC 1509.
33 (2004) 1 sec 126.
34 2011 (10) SCALE 478.
248 • Industrial Relations and Labour Laws

of the principal employer. The industrial court misconstrued the meaning

of the terms 'control and supervision' and held that as the officers of the
appellant were giving some instructions to the first respondent working as
a guard, he was deemed to be working under the control and supervision
of the appellant.
The Court also reiterated its earlier decision in International Airport Authority of India
v. International Air Cargo Workers' Union 35 wherein while explaining the expression 'control
and supervision' in the context of contract labour, the Supreme Court observed:

If the contract is for supply of labour, necessarily, the labour supplied by

the contractor will work under the directions, supervision and control of the
principal employer but that would not make the worker a direct employee
of the principal employer, if the salary is paid by the contractor, if the right
to regulate employment is with the contractor, and the ultimate supervision
and control lies with the contractor. The principal employer only controls
and directs the work to be done by a contract labour, when such labour is
assigned/allotted/ sent to him. But it is the contractor as employer, who chooses
whether the worker is to be assigned/allotted to the principal employer or
used otherwise.
In view of the above, the Court held that the industrial court ought to have held that
the first respondent was not the direct employee of the appellant. The Court accordingly
set aside the order of the labour court, the industrial court and the High Court.
In Devinder Singh v. Municipal Council 36, the Supreme Court held that the source
of employment, the method of recruibnent, the terms and conditions of employment/
contract of service, the quantum of wages/pay and the mode of payment are not at all
relevant for deciding whether or not a person is a workman within the meaning of Section
2(s) of the Act.

C. Nature of Work
In order to be a 'workman',a person must be employed in an industry to do any (i) skilled
and unskilled manual work; (ii) supervisory work; (iii) technical work; and (iv) clerical
work.
Those who though 'employed in a industry' are not engaged in the aforesaid types
of work are beyond the scope of 'workman'. Essentially, the emphasis is on the nature of
work done by an employee, the degree of his responsibility,37 the nature of industry and
the organizational set up of a particular unit. 38 However, merely because any one of the
aforesaid types of work done by a person is incidental to and not the main duty which a
person is doing and if the main duty is not covered in any one of the four specified nature
of the work, such a person would not be a 'workinan.'39

35 (2009) 13 sec 374.

36 2011 Lab. IC 2799.
37 See Chintaman Martand Salvekar v. Phalton Sugar Works Ltd, (1954) 1 LLJ 499 (L.A. T. ); Janardhan Mills
Ltd v. Certain Workman, (1953) 1 LLJ 344.
38 Raymond v. Ford Motors Co. Ltd, (1951) 1 LLJ 167.
39 Lakshmi Devi Sugar Mills v. State of UP, (1955) 2 LLJ 250 (Allahabad).
 Workmen • 249

1. Manual Work. Manual work under Section 2(s) refers to work done by physical
effort as distinguished from mental or intellectual effort. 40 The work may be done with
hands or with any other part of the body. 41 Accordingly durban,42 jamadar of watch and
ward staff43 and handling of the pieces of cloth, measuring them and cutting into pieces
according to the requirement of customer,44 have been held to be persons doing 'manual
work' under Section 2(s). On the contrary work of an artiste 45, chemical analyst in an
advertising concern, chemist46 mainly carrying out chemical analysis in a sugar mill, doctor
and his compounder47 and others incharge of watch and ward and fire fighting deparbnent48
of a sugar mill (whose primary duty was to supervise the duty of watchmen and jamadars
and to look after the security of the factory) have not been held to be persons doing 'manual
work' under Section 2(s).
2. Skilled or unskilled. The scope of the expression 'any skilled or unskilled manual,
supervisory, technical or clerical work' has been the subject-matter of controversy.
In SK Verma v. Mahesh Chandra49, a dispute arose whether a development officer of
a corporation is a 'workman'. The Central Government referred a dispute regarding the
dismissal of a development officer of the Life Insurance Corporation of India, New Delhi
to the industrial tribunal-cum-labour court for adjudication. The tribunal held that the
development officer was not a 'workman' and therefore, the reference was incompetent.
On dismissal of the writ petition, the petitioner appealed to the Supreme Court. The Court
examined the scope of the expression 'any skilled or unskilled workman' and held that the
term 'workmen' takes into account the entire labour force excepting managerial work. The
Court then examined the nature of the duty of the development officer and came to the
conclusion that he was not engaged in any administrative or managerial work. The Court
accordingly held that the development officer was a 'workman' under the Act.
Resolution ofconflicting views. After the amendment of the definition of 'workman', a
Constitution bench of the Supreme Court in H R Adyanthaya v. Sandoz (India) Ltd50 applied the
rule of ejusdem generis to give a narrow meaning to the wide words in the amended definition
of 'workman' under the ID Act. Accordingly, the Court excluded 'sales representatives' from
the definition of 'workman' by holding that the words 'skilled', 'unskilled' and 'manual' had
to be read ejusdem generis. A Constitution bench of the Supreme Court in H R Adyanthaya51
after noticing all the earlier judgements the Supreme Court observed as under:

We thus have three-judge bench decisions which have taken the view that a
person to be qualified to be a workman must be doing the work which falls

40 See Jute Mills, West Bengal v. Their Workmen, (1952) 1 LLJ 264 (IT); See also Cawnpore Tannery Ltd v.
Their Workmen, (1955) 2 LLJ 259.
41 An armless person working with legs or chest would be doing manual work
42 See supra note 40.
43 B L C Ltd v. Ram Bahadur Jamadar, (1957) 1 LLJ 422 (LAT).
44 Bharat Kala Kendra v. R K Baweja, (1980) 2 LLJ 236 (Delhi).
45 See SA Phenany v. J Walter Thompson Co., (Eastern) Ltd Bombay, 9 FIR 324 (LAT).
46 See Chintaman Martand Salvekar v. Phalton Sugar Works Ltd, op. cit., 499.
47 See Lakshmi Devi Sugar Mills Ltd v. State of Uttar Pradesh, (1995) 2 LLJ 250.
48 See Cawnpore Tannery Ltd v. Their Workmen, (1954) 2 LLJ 459 and Jaswant Sugar Mills Ltd v. Shri D
Smith, (1954) 2 LLJ 337.
49 (1983) 2 LLJ 429.
50 (1994) 4 sec 164.
51 Ibid.
250 • Industrial Relations and Labour Laws

in any of the four categories, viz., manual, clerical, supervisory or technical

and two-judge bench decisions which have by referring to one or the other of
the said three decisions have reiterated the said law. As against this, we have
three-judge bench decisions which have without referring to the decisions
in May & Baker [AIR 1967 SC 618], WIMCO [AIR 1964 SC 472] and Burmah-
Shell cases (1971) 2 SCR 758, have taken the other view which was expressly
negatived, viz., if a person does not fall within the four exceptions to the said
definition, he is a workman within the meaning of the Industrial Disputes Act.
These decisions are also based on the facts found in those cases. They have,
therefore, to be confined to those facts. Hence, the position in law as it obtains
today is that a person to be a workman under the Industrial Disputes Act must
be employed to do the work of any of the categories, viz., manual, unskilled,
skilled, technical, operational, clerical or supervisory. It is not enough that he
is not covered by either of the four exceptions to the definition. We reiterate
the said interpretation.
3. Supervisory Capacity. The essence of supervisory nature of work under Section
2(s) is the supervision by one person over others. 52 The term 'supervisor' means any
individual having authority of the employer to hire, transfer, suspend, lay-off, recall,
promote, discharge, assign or discipline other employees, or responsibility to direct them or
to adjudge their grievances, or to recommend such action in connection with the foregoing.
The exercise of such authority is not of a routine or clerical nature, but requires the use of
independent judgement. The person exercising supervisory work is required to control men
and not machines. His duty is to see how the employees will be engaged in different works of
production and that the supervisor himself must have technical expertise, otherwise he may
not be in a position to exercise proper supervision of the workmen handling sophisticated
plants and machineries. However, if the main work done by persons employed in an industry
is of manual, technical or clerical nature, the mere fact that some supervisory duties are
also carried out incidentally or as a small fraction of the work done by him will not convert
his employment into one of supervisory capacity.53 Conversely, if a person mainly doing
supervisory work, but incidentally or for a fraction of the time also does some clerical work,
it would have to be held that he is employed in the supervisory capacity.54
In All India Reserve Bank Employees' Association v. Reserve Bank of India 55, the Court was
called upon to decide whether the work done by an employee engaged in checking and
distributing the work, detecting the faults, reporting for penalty and making arrangements
for filling up vacancies is supervisory in nature. The Court answered the question in the
affirmative, and observed that the question is ultimately a question of fact, or at best of
mixed fact and law and would primarily depend upon the nature of the industry, the type
of work in which he is engaged, the organizational set up of the particular unit and the like.
The Court, while construing the word 'supervise' observed that the word supervise and its
derivatives are not of precise import and most often construed in the light of the context,
for unless controlled, they cover simple oversight and direction as manual work coupled
with the power of inspection and superintendence of manual work of others.

52 Blue Star Ltd v. N R Sharma, (1975) 2 LLJ 300 (Delhi).

53 Anand Bazar Patrika (Pvt.) Ltd v. Its Workmen, (1969) 2 LLJ 670 (SC).
54 Ibid.
55 All India Reserve Bank Employees' Association v. Reserve Bank of India (1965) 2 LIJ 178.
 Workmen • 25 1

In Anand Bazar Patrika v. Its Workmen 56, the principal work that the employee concerned
was doing was of maintaining and writing cash book and of preparing various returns. Being the
senior-most clerk, he was made incharge of provident fund section and three clerks who were
working in the same section were put under him. He was required to allocate work between
them, to permit them to leave during office hours and to recommend their leave applications.
The Supreme Court held that the duties of the senior clerk incharge were not of a supervisory
nature because the few minor duties cannot convert his office into that of a 'supervisor'.
In Burmah Shell Co. v. Burmah Shell Management Staff Association57, 20 workmen
(including checkers, general workmen, packers and chemical mixers) were working under
a foreman (chemical). The foreman allotted the work to workmen under him, signed gate
passes and other material vouchers, recommended promotions of men who had been
working under him, selected persons for acting in a higher capacity, insured maximum
utilization of manpower and was responsible for blending of chemicals. On these facts the
Supreme Court observed:
In determining the nature of employment ... (of any person) and in holding
that he is employed to do supervisory work, we have taken into account not
only the work of supervision which he carries on in ensuring that... workmen
employed under him are properly doing the work ... but also the fact that the
workmen function under his control and direction.
The Court accordingly held that the duties of a foreman were of 'supervisory' nature
and the manual work done by him personally was only incidental.
In Mayank Desai v. Sayaji Iron and Engineering Co. Ltd58, a person was appointed as
design and development engineer. He was required to check certain drawings prepared by
the draftsman but not to approve such drawings. He had no authority to appoint a person,
to sanction leave of anybody or take disciplinary action against any person. No one was
reporting to him. On these facts, the Gujarat High Court held that he was not acting in a
supervisory capacity under Section 2(s)(iv) of the IDA.

Tests for Determination of Supervisory Capacity

The Bombay High Court in Union Carbide (India) Ltd v. D Samuel and others59 summarized
the tests laid down by the Supreme Court in various decisions as follows :
1. Designation is not material but what is important is the nature of work;
2. Find out the dominant purpose of employment and not any additional duties the
employee may be performing;
3. Can he bind the company/employer to some kind of decisions on behalf of the
company/employer;
4. Has the employee the power to direct or oversee the work of his subordinates;
5. Does he have the power to sanction leave or recommend it; and
6. Does he have he the power to appoint, terminate or take disciplinary action against
workmen.

56 Ananda Bazar Patrika v. Its Workman, op. cit.

57 Burmah Shell Co. v. Burmah Shell Management Staff Association, AIR 1971 SC 922.
58 (2011) II CLR 485.
59 (1999) LLR 21 (Born.).
25 2 • Industrial Relations and Labour Laws

The Supreme Court in National Engineering Industries Ltd v. Shri Kishan Bhageria 60 noted
the distinction between the expression 'supervisory', 'managerial' and 'administrative'. The
Court also noted that these terms or expressions cannot be put in a water-tight comparbnent.
However, the Court observed that one must always look into the main work and that must
be found out from the main duties. A supervisor is one who could bind the company to
take some kind of decision on behalf of the company. One who was reporting merely as to
the affairs of the company and making assessment for the purpose of reporting was not a
supervisor. The Court, therefore, will have to bear in mind these tests while examining as
to what is the main work of an employee.
4. Technical Work. The word 'technical' was inserted in Section 2(s) by amending Act
36 of 1956. Broadly speaking, a work which depends upon the special training or scientific
or technical knowledge of a person, constitutes technical work.
In Marugalli Estate v. Industrial Tribunal, Madras, 61 a person was employed as a medical
officer for the plantation estate on a monthly salary exceeding ~500. His duties were: (i)
management and running of a central hospital staff; (ii) supervision of work of the hospital
staff: (iii) supervision of dispensaries; (iv) inspection of lines and quarters; (v) malaria
control work; and (vi) supervision of creches. On these facts, the Court concluded that the
main function for which he was appointed may not occupy as much time as the medical
attendance on patients. All these show that it is a technical employment for a particular
purpose, because of particular qualifications and should not be lost sight of in determining
the character of employment. 62 The Court also laid down a test to determine whether the
work done by any person is technical or supervisory:

The test to be applied to my mind, to cases of technical employment such as in

this case, should be the purpose for which the employment is made, irrespective
of whether the performance of the duties may or may not occupy the entire
time of the employee. That is because the employment is made on the basis
of the particular level of professional efficiency and technical qualifications. If
an employee is found suitable for supervisory work, because of those reasons,
it cannot be said that the functions are mainly those of a medical attendant,
as on account of his professional qualification, he happened to be engaged in
that capacity as well. 63
The Court, therefore, opined that the employee concerned was not at all entrusted
with supervisory work.
The advancement of science and technology and the era of automation pose new
problems for lawyers, judges and legislators. Thus, in Titaghur Paper Mills Co. Ltd v. First
Industrial Tribunal 64, the Calcutta High Court was, inter alia, confronted with the issue
whether persons with technical expertise could be said to be 'workmen' within the meaning
of Section 2(s). The Court observed:

60 (1988) (56) FLR 148 (SC).

61 Murugalli Estate v. Industrial Tribunal, (1964) 2 LLJ 164 (Madras).
62 Id. at 168.
63 Marugalli Estate, Hardypet, v. Industrial Tribunal Madras, op. cit.
64 (1982) 2 LLJ 288.
 Workmen • 25 3

That in the matter of production and running sophisticated machines, persons

having technical expertise are often required to guide the labourers as to how
the machine will be run and how the technical process of production will
be carried out. Such technicians render their technical expertise along with
other workers. In such circumstances, it cannot be said that simply because
they did not run the machines themselves but stood by and guided ordinary
workmen in the matter ofrunning the machine and/ or carrying out the phases
of production, they were purely administrators and/or supervisors and their
only job is to s!f?ervise the men and not the machine and/ or technical works
of production.
5. Clerical Work. In general connotation, 'a clerk is one employed as writer, copyist,
account keeper or correspondent in the office'. 66 Clerical work 'implies a stereotyped work,
without power of control or dignity or creativeness.'67
In DP Maheshwari v. Delhi Administration 68 , a question arose whether an employee
discharging the duties of clerical nature was a workman. The labour court found that
D P Maheshwari was discharging work of clerical nature. The single judge and division
bench of the Delhi High Court reversed the findings of the labour court. On appeal, the
Supreme Court held the fact that Maheswari was not discharging supervisory function but
he was discharging duties of clerical nature. It accordingly set aside the decision of single
judge and division bench of the High Court and restored the orders of the labour court.
In Anameinuger Development Corporation Ltd v. Second Industrial Tribunal, 69 the
management employed the appellant as a typist-cum-clerk. Thereafter, he was appointed
an officer to make purchases, attend to sales tax authorities and transport. On these facts,
a question arose whether he was a 'workman' under Section 2(s) of the Act. The division
bench of the Calcutta High Court answered the question in the affirmative and observed
that mere designation would not govern the nature of the work. The Court also held that he
was receiving low emoluments and was not an officer, therefore, he fell within the category
of 'workman' under Section 2(s) of the Act.
In Prakash v. Mis Delton Cables India (P) Ltd 70, the appellant was employed as a
chargeman security to look after the security of the factory and its property. He was also
required to depute watchmen working under him to work at the factory gate or to send
them to watch in or around the factory and to make entries about the visitors in the register
and about materials entering or going out of the premises of the factory in the concerned
register. The appellant had no power to appoint or dismiss any workman or even order an
inquiry against any workman. On these facts, the Supreme Court held that the substantial
duty of the appellant was only of a security inspector at the gate of the factory premises. The
Court also held that his nature of duty was neither managerial nor supervisory in nature
within the exclusory clause of Section 2(s).

65 Id. at 297-98.
66 Workmen of Macforline and Co. v. Fifth IT, (1964) 2 LLJ 556. (Calcutta).
67 Id. at 588.
68 (1981) 1 LLJ 267; On appeal 1983 Lab. IC 1629 (SC).
69 (1986) Lab. IC 1741.
70 (1984) Lab IC 658.
254 • Industrial Relations and Labour Laws

A survey of decided cases reveals that a clerk of audit deparbnent71 , manager of hotel
(required to write ledgers, file correspondence and enter cash book, etc.) 72, senior clerk of
a bank73 and accountant of a bank signing salary bills of the staff 74 are workmen under
Section 2(s).
6. Multifarious Duties. In practice, quite a large number of employees are employed
in industries to do work of more than one of the kinds mentioned in the definition. In such
cases, it would be necessary to determine under which classification he will fall for the
purpose of finding out whether he does or does not go out of the definition of 'workman'
under the exceptions.
In Burmah Shell Oil Storage and Distribution Company India Limited v. Burmah Shell
Management Staff Association75, the Supreme Court held that where an employee is doing
multifarious duties, the main work which he is required to do should be held to be the work
done by him to find out whether he is a workman or not.
The Supreme Court in National Engineering Industries v. Shri Krishna Bhageria76 was
seized of the question of whether an internal auditor working in the company was a
workman or not. After considering his main duties and the work, it was held that he was
not doing any kind of supervisory work. It was also held that since the employee had no
independent right or authority to take decisions and his decision did not bind the company
and, therefore, he was a workman and not a supervisor.
In SK Maini v. Mis Carona Sahu Company Ltd77, the Supreme Court laid down the
following principles for determination of the question as to whether a particular employee
falls within the definition of 'workman' under Section 2(s):

Whether or not an employee is a workman under Section 2(s) of the Industrial

Disputes Act is required to be determined with reference to his principal nature
of duties and functions. Such question is required to be determined with
reference to the facts and circumstances of the case and materials on record
and it is not possible to lay down any strait-jacket formula which can decide
the dispute as to the real nature of duties and functions being performed by
an employee in all cases. When an employee is employed to do the types of
work enumerated in the definition of workman under Section 2(s), there is
hardly any difficulty in treating him as a workman under the appropriate
classification, but in the complexity of industrial or commercial organization,
quite a large number of employees are often required to do more than one
kind of work. In such cases, it becomes necessary to determine under which
classification the employee shall fall for the purpose of deciding whether he
comes within the definition of workman or goes out of it. The designation of
the employee is not of much importance and what is important is the nature
of duties being performed by the employee. The determinative factor is the
main duties of the concerned employee and not some work incidentally done.

71 Lloyds Bank Ltd. v. P L Gupta, AIR 1967 SC 428.

72 Indian Iron and Steel Co. Ltd v. Workmen, AIR 1958 SC 130, 137.
73 Madan Gopal v. R S Bhatia, AIR 1975 SC 1898.
74 Punjab Cooperative Bank v. R S Bhatia, AIR 1975 SC 1526.
75 (1970) 2 LLJ 590 (SC).
76 (1988) I LLJ 363 (SC).
77 (1994) (68) FLR 1101 (SC).
 Workmen • 25 5

In other words, that is in substance, the work which an employee does or what
in substance he is employed to do. Viewed from this angle, if the employee is
mainly doing supervisory work but incidentally or for a fraction of time also
does some manual or clerical work, the employee should be held to be doing
supervisory works. Conversely, if the main work is of manual, clerical or of
technical nature, the mere fact that some supervisory or other work is also done
by the employee incidentally or only a small fraction of working time is devoted
to some supervisory works, the employee will come within the purview of
'workman' as defined under Section 2(s) of the Industrial Disputes Act, 1947.
The position that emerges from the aforesaid discussion is that in determining the
question whether a person employed by the employer is workman under Section 2(s) of the
Industrial Disputes Act or not, the Court has principally to see main or substantial work
for which the employee has been employed and engaged to do. Neither the designation of
the employee is decisive nor any incidental work that may be done or required to be done
by such employee shall get him outside the purview of workman, if the principal job and
the nature of employment of such employee is manual, technical or clerical. In hierarchy of
employees, some sort of supervision by the employee over the employees of the lower ladder
without any control may not by itself be sufficient to bring that employee in the category of
supervisory, yet if the principal job of that employee is to oversee the work of employees who
are in the lower ladder of the hierarchy and he had some sort of independent discretion and
judgement, obviously such an employee would fall within the category of supervisor. Each
case would depend on the nature of the duties predominantly or primarily performed by
such employee and whether such function was supervisory or not would have to be decided
on facts keeping in mind correct principles. Where the employee possesses the power of
assigning duties and distribution of work, such authority of employee may be indicative of
his being supervisor doing supervision. In a broad sense, supervisor is one who has authority
over others: someone who superintends and directs others. An employee who, in the interest
of the employer has responsibility to directly control the work done by other workers and if
the work is not done correctly, to guide them to do it correctly in accordance with norms shall
certainly be a supervisor. A supervisory work may be distinguished from managerial and
administrative work and, so also a supervisor from manager and administrator. Supervisor's
predominant function is to see that work is done by workers under him in accordance with
the norms laid down by the management; he has no power to take disciplinary action.

D. Hire and Reward

The expression 'for hire or reward' which is frequently used to denote contractual
relationship 78 has been used in Section 2(s). Only those persons are 'workmen' who are
employed for 'hire or reward'. The expression 'hire and reward' is wider than 'wages'.
Legislature was, however, alive of this situation and, therefore, preferred to adopt the
former expression rather than the latter to include those who are not technically getting
'wages'. There is, however, a difference between 'hire and reward'. While the former refers to
payment or receipt of compensation, as distinguished from a gratuitous or non-remunerative
service79, the latter implies something given in return for good or evil done or received and
does not necessarily mean money or a thing in itself of pecuniary value.

78 Corpus Juris, Vol. 40,402.

79 (1991) Lab. IC 557 (H C Madras).
256 • Industrial Relations and Labour Laws

In Management ofIndian Bank,Madras v. The Presiding Officer, Industrial Tribunal Madras, 80

the Madras High Court held that the commission providing for payment to a tiny deposit
agent under the agreement will be 'hire or reward' within the meaning of Section 2(s) of
the Industrial Disputes Act, 1947.
In Devinder Kaur (Smt) v. Child Welfare Council, Punjab 81 , the Punjab and Haryana High
Court held that a person working for honorarium as a Balsevika in Child Welfare Council
is not a workmen under the Industrial Disputes Act, 1947.

E. Persons Excluded
The exclusory clause in the definition of 'workman', namely:
(i) who is subject to the Army, Air Force and Navy Acts, or
(iz) who is employed in the police service or as officer or other employee of a prison, or
(iii) who is employed mainly in a managerial or administrative capacity; or
(iv) who being employed in a supervisory capacity, draws wages exceeding ten thousand
rupees per mensem or exercises either by the nature of the duties attached to the office
or by reason of the power vested in him, functions mainly of a managerial nature,
curtails the scope of the term 'workmen.'
The aforesaid clauses indicate that if they did not occur in the definition, a good
number of persons employed in navy, military, air force, police or prison would have been
regarded as 'manual' workers and hence 'workmen'. The legislature was obviously alive
of this problem and, therefore, excluded such persons. But, even the aforesaid clauses are
inadequate and incomplete as unlike Section 2 (9) (b) of the Industrial Relations Bill, 1978,
it does not include any person:

who is employed ... (as) an officer or member of the Railway Protection Force
constituted under Section 3 of the Railway Protection Force Act, 1957 or the
Border Security Force constituted under Section 4 of the Border Security Force
Act, 1968 or the Central Industrial Security Force constituted under Section 3
of the Central industrial Security Force Act, 1968.82
The Bill also specifically excluded any person:

who is employed or engaged as a seaman as defined in clause (42) of Section

3 of the Merchant Shipping Act, 1958 ... 83
But, due to the change in the government, the aforesaid recommendation could not
find place in the statute book.
1. Person Employed Mainly in Managerial and Administrative Capacity. Section
2(s) (iii) excludes the aforesaid category. The aforesaid phrase which has not been defined
in the Industrial Disputes Act appears to indicate that there may be plurality of person in
this category of any industry. 84 However, it is not necessary that such persons should have

80 Section 2(9).
81 2011 LLR 357.
82 Section 2(9) (d}.
83 Section 2(9) (d}.
84 Standard Vacuum Oil Co. v. Labour Commissioner, AIR 1960 Madras 288 at 291.
 Workmen • 25 7

the power of making appoinbnents. Nor is it essential that before a person can fall in the
aforesaid category, he should have the power to dismiss any employee. Further, the mere
fact that a person is designated as 'managerial' or 'administrative' personnel is not conclusive
proof of his being so, but has to be established by the actual nature of work done by him. In
order to bring a person in the aforesaid category, it is necessary that he must have workmen,
persons or officers subordinate to him whose work he is required to supervise. He should take
decisions and also asswne responsibility for ensuring that the matters entrusted to be charged
are efficiently conducted and an ascertainable area or section of work is assigned to him. 85
In Air India Cabin Crew Association v. Union ofIndia 86, the Supreme Court held that once
an employee is placed in the executive cadre, he ceases to be a workman and also ceases to
be governed by a settlement arrived at between the management and the workmen through
the trade union concerned.
2. Supervisory Capacity Drawing Wages Exceeding Rupees Ten Thousand Per Mensem.
The salary limit is associated with the person in the supervisory capacity. But managerial
or administrative personnel are excluded, irrespective of their salary. Further, no such limit
applies in case of manual, clerical or technical personnel. Thus, Section 2(s) (iv) excludes those
person employed in a supervisory capacity who draw wages exceeding flO ,000 per month. 87
In M/s Bharat Heavy Electricals Ltd, Haridwar v. State, 88 the Uttranchal High Court
held that assistant foreman employed in Bharat Heavy Electricals Ltd, an undertaking of
Government of India who was performing duties of supervisory nature, cannot be treated
as 'workinan'.
However, an incidental performance of supervisory duties will not impress his
employment with the character of supervisory capacity. The mere designation as supervisor
is not decisive. 89
A similar view was taken by this Court in Western India Match Co. Ltd v. Workmen 90 and
Burmah Shell Oil Storage & Distribution Co. ofIndia Ltd v. Burmah Shell Management StaffAssn. 91
A division bench of this Court, however, without noticing the aforementioned
binding precedent, in SK Verma v. Mahesh Chandra 92 held that the duties and obligations of
a development officer of Life Insurance Corporation of India being neither managerial nor
supervisory in nature, he must be held to be a workman. Correctness of SK Verma (supra)
came up for consideration before a Constitution bench of this Court in H R Adyanthaya93
case. Referring to this Court's earlier decisions in May and Baker (supra), Western India Match
Co. and Burmah Shell Oil Storage, it was observed that as in SK Verma (supra) the binding
precedents were not noticed and furthermore, in view of the fact that no finding was given

85 The press superintendent who has been discharging the functions of managerial supervisory nature
not a workman. See Yadeshwar Kumar v. MS Bennet Coleman, 2007 LLC 1138. See also V K Sharma
v. Govt. of NCT, 2008 LLR 521.
86 (2012) 1 sec 619.
87 The Industrial Disputes (Amendments) Bill, 2009 has raised the wage limit to ?10,000. But still it is
being debated whether the supervisor should be considered to be a 'workman'.
88 2004 LLR 1078.
89 JPhilips v. Labour Court. (1993) Lab. IC 1455.
90 (1964) 3 SCR 56.
91 (1970) 3 SCR 378.
92 SK Verma v. Mahesh Chandra, (1983) 3 SCR 799.
93 H R Adyanthaya v. Sandoz (India) Ltd. (1994) 5 SCC 737.
25 8 • Industrial Relations and Labour Laws

by the Court as to whether the development officer was doing clerical or technical work and
admittedly not doing any manual work, the same had been rendered per incuriam.
The Constitution bench summarized the legal position that arose from the statutory
provisions and from the decisions rendered by this Court, stating:

Till 29-8-1956, the definition of workman under the ID Act was confined to
skilled and unskilled, manual or clerical work and did not include the categories
of persons who were employed to do 'supervisory' and 'technical' work. The
said categories came to be included in the definition w .e.f. 29-8-1956 by virtue
of the Amending Act 36 of 1956. It is, further for the first time that by virtue
of the Amending Act 46 of 1982, the categories of worker employed to do
'operational' work came to be included in the definition. What is more, it is
by virtue of this amendment that for the first time, those doing non-manual,
unskilled and skilled work also came to be included in the definition with
the result that persons doing skilled and unskilled work, whether manual or
otherwise, qualified to become workmen under the ID Act.
Considering the decisions in May & Baker (supra), Western India Match Co. (supra),
Burmah Shell Oil Storage (supra) as also SK Verma (supra) and other decisions following the
same, this Court in H R Adyanthaya (supra) observed:

However, the decisions in the later cases, viz., SK Verma ((1983) 3 SCR 799),
Delton Cable, ((1984) 3 SCR 169), and Ciba Geigy, ((1985 Supp (1) SCR 282) cases
did not notice the earlier decisions in May & Baker ((1964) 3 SCR 560), and
Burmah Shell ((1971) 2 SCR 758) cases and the very same contention, viz., if a
person did not fall within any of the categories of manual, clerical, supervisory
or technical, he would qualify to be workman merely because he is not covered
by either of the four exceptions to the definition, was canvassed and though
negatived in earlier decisions, was accepted. Further, in those cases the
development officer of the LIC, the security inspector at the gate of the factory
and the stenographer-cum-accountant respectively, were held to be workmen
on the facts of those cases. It is the decision of this Court in A Sundarambal case
((1988) 4 SCC 42) which pointed out that the law laid down in May & Baker case
((1961) 2 LLJ 940) was still good and was not in terms disowned.
A three-judge bench of the Supreme Court in Mukesh K Tripathi v. Senior Divisional
Manager, LIC94 while dealing with the above cases held:
(i) That Constitution bench though noticed the distinct cleavage of opinion in two lines
of cases but held:

... these decisions are also based on the facts found in those cases. They have,
therefore, to be confined to those facts. Hence, the position in law as it obtains
today is that a person to be a workman under the ID Act must be employed to
do the work of any of the categories, viz., manual, unskilled, skilled, technical,
operational, clerical or supervisory. It is not enough that he is not covered by
either of the four exceptions to the definition. We reiterate the said interpretation.

94 (2004) s sec 387.

 Workmen • 25 9

(iz) The said reasonings are, therefore, supplemental to the ones recorded earlier, viz.:
(i) They were rendered per incuriam; and (ii) May & Baker (supra) is still a good law.
(iii) Once the ratio of May & Baker (supra) and other decisions following the same had
been reiterated, despite observations made to the effect that SK Verma (supra) and
other decisions following the same were rendered on the facts of that case, we are of
the opinion that this Court had approved the reasonings of May & Baker (supra) and
subsequent decisions in preference to SK Verma (supra).
(iv) The Constitution bench, further, took notice of the subsequent amendment in the
definition of 'workman' and held that even the legislature impliedly did not accept
the said interpretation of this Court in SK Verma (supra) and other decisions.
(v) It may be true, that SK Verma (supra) has not been expressly overruled in H RAdyanthaya
(supra) but once the said decision has been held to have been rendered per incuriam, it
cannot be said to have laid down a good law. This Court is bound by the decision of
the Constitution bench.
In PB Sivasankaran v. Presiding Officers, First Additional Labour Court 95, a question arose
whether the petitioner who worked as supervisor in charge of a shift, having power to grant
leave, recommend confirmation of regularization and issue memos against the subordinate
workers, was a workman. On the facts of the case, the Madras High Court held that he was
not a 'workman' under Section 2(s) of the Act.

F. Specific Cases

1. Sales/Medical Representative: If Workman

In May & Baker India Ltd v. Their Workman,% the pharmaceutical concern employed the
petitioner as a representative for canvassing and procuring orders. However, he was also
required to do some clerical or manual work which was incidental to his main work. On
these facts, the Supreme Court held that he was not a 'workman' under Section 2 (s) of the
Act. The Supreme Court added that if the nature of duties is manual or clerical, then the
person must be held to be a workman. On the other hand, if the manual or clerical work is
only a small part of the duties of the person concerned and is incidental to the main work
which is not manual or clerical, then such a person would not be a workman.
In T P Srivastava v. Mis National Tabacco Co. of India 97, the Supreme Court was called
upon to decide a question whether a person looking after sales promotion is a 'workman'
under the Industrial Disputes Act, 1947. In this case, the appellant was employed to do
canvassing and promoting sales for the company. His duties among others included
suggesting ways and means to improve sales, study the type of status of the public to
whom the product has to reach and study the market conditions. He was also required to
suggest about the publicity in markets and melas, advertisements, including the need for
posters, holders and cinema slides. On these facts the Supreme Court held that persons
looking after sales promotion were not workmen under the Industrial Disputes Act.

95 2012 LLR 30 (Mad.).

96 AIR 1976 SC 678.
97 (1991) Lab. IC 2371 (SC).
260 • Industrial Relations and Labour Laws

In H R Adyanthaya v. Sandoz (India) Ltd 98 , a question arose whether a medical

representative was a 'workman' under Section 2(s). The Supreme Court answered the
question in negative and observed ' ... the word skilled has to be construed ejusdem generis
and thus construed would mean skilled work, whether manual or non-manual which
is of a general or other types of work mentioned in the definition clause 2(s). The work
of promotion of sales of products or services of the establishments is distinct from the
independent type of work covered by Section 2(s). Therefore, medical representatives are
not workmen.'
In Sharad Kumar v. Government ofNCT of Delhi99, the Supreme Court was called upon
to decide whether the area sales executive was a 'workman' under Section 2(s) of the ID
Act. While holding that he was not a 'workman', the Court laid down the following tests
for guidance:
(a) In order to fall under the purview of the expression 'workman' as defined under
Section 2(s) of the Act, the person has to discharge any one of the types of the works
enumerated in the first portion of Section 2(s).
(b) If the person does not come within the first portion of Section 2(s), then it is not
necessary to consider the further question whether he comes within any classes of
workmen excluded under the latter part of the section.
(c) Whether the person concerned comes within the first part of Section 2(s) depends upon
the nature of duties assigned to him and/or discharged by him.
(d) The duties of the employee may be spelt out (z) in the service rules or (ii) service
regulations or (iii) standing orders or (iv) the appoinbnent order; or (v) in any other
material in which the duties are assigned to him.
(e) When the employee is assigned to a particular type of duty and has been discharging the
same till date of dispute then there may not be any difficulty in coming to a conclusion
whether he is a workman within the meaning of Section 2(s). If on the other hand, the
nature of duties discharged by the employee is multifarious, then the further question
that may arise for consideration is which of them is his principal duty and which are
the ancillary duties performed by him.
(f) Designation of the employee is not of much importance and certainly not conclusive
in the matter as to whether or not he is a workman under Section 2(s) of the Act.

2. Part-time Employees: If Workman

In Div. Manager, New India Assurance Co. Ltd v. A Sankaralingam 100, the Supreme Court held
that part-time worker will be a workman. This is so because Section 2(s) of the Industrial
Disputes Act, 1947 which defines the term 'workman' does not make any distinction between
a full-time and part-time employee. When the attention of the Court was drawn in this case
to the Uttranchal Forest Hospital Trust v. Dinesh Kumar 101 wherein the Court had observed
that part-time workers do not fit into the scheme of law relating to retrenchments and are
not entitled to the benefits of Section 25-F of the Industrial Disputes Act, 1947, the Supreme

98 (1995) 1 LLJ 303 (SC}; See also M/s Pfizer Ltd v. State of UP, 2010 LLR 586.
99 (2002} 2 LLJ 275.
100 (2008) 10 sec 698.
101 (2008) 1 sec 542.
 Workmen • 261

Court said that it was merely an obiter in regard to the status of part-time employee where
the main issue before the Court was whether workman in fact had put in 240 days of service
which could have entitled him to the benefit of Section 25-F.
The question again came up for consideration before the Supreme Court in New
India Assurance Co. v. Vipin Behari Lal Srivastava 10'2. The Court held that a part-time worker
is covered under Section 2(s) and is entitled to the benefit of continuous service under
Section 25-B and cannot be retrenched without complying with the mandatory provisions
of Section 25-F of the Act.
In Devinder Singh v. Municipal Council 103, the Supreme Court held that the definition
of workman also does not make any distinction between full-time and part-time employees
or persons appointed on contract basis. There is nothing in the plain language of Section
2(s) from which it can be inferred that only a person employed on regular basis or a person
employed for doing whole-time job is a workman and the one employed on temporary,
part-time or contract basis on fixed wages or as a casual employee or for doing duty for
fixed hours is not a workman.

3. Creative Artists
In Bharat Bhawan Trust v. Bharat Bhawan Artists' Association 104, the Court was, inter alia, called
upon to consider whether the respondents, who were artists are 'workmen'. In this case,
Bharat Bhawan Trust was established under the Bharat Bhawan Nyas Adhiniyam, 1982 for
promotion of art and preservation of artistic talent. It is a national centre of excellence in
creative arts. The trust entered into various agreements with creative artists for production
of drama and theatre management. The said artists apprehending termination of their
services raised a dispute. The appropriate government referred the dispute to labour court
for adjudication. The labour court held that the trust was an 'industry' and artists were
'workmen'. On appeal, the Supreme Court held that it was doubtful if the trust can be held
to be an 'industry'. It also held that artists were not 'workmen'.

4. Teacher: If Workman
In Miss A Sundarmbal v. Govt of Goa, Daman & Diu 105, a question arose whether a teacher
employed in a school falls within the definition of 'workman' under Section 2(s) of the Act.
The Supreme Court answered the question in the negative and observed:

We are of the view that the teachers employed by educational institutions

whether the said institutions are imparting primary, secondary, graduate or
post-graduate education, cannot be called 'workman' within the meaning
of Section 2(s) of the Act. Imparting of education which is the main function
of teachers cannot be considered as skilled or unskilled manual work or
supervisory work or clerical work. Imparting of education is in the nature
of a mission or noble vocation. A teacher educates children, he moulds their

102 (2008) 3 SCC 446; See also Kan Singh v. Distt. Ayurved Officer, 2012 LLR 325 (Patna) and Himachal
Pradesh State Electricity Board v. Laxmi Devi, 2011 LLR 52 (H.P.).
103 2011 Lab. IC 2799.
104 (2001) 7 sec 630.
105 (1989) 1 LLJ 62 (SC); See also Amar Jyoti School v. Govt. of NCT. (2009) 122 FLR 354.
262 • Industrial Relations and Labour Laws

character, builds up their personality and makes them fit to become responsible
citizens. Children grow under the care of teachers. The clerical work, if any,
they do is only incidental to their principal work of teaching.
The Court added:

We may at this stage observe that teachers as a class cannot be denied the
benefits of social justice. We are aware of the several methods adopted by
unscrupulous management to exploit them by imposing on them unjust
conditions of service. In order to do justice to them, it is necessary to provide
for an appropriate machinery so that teachers may secure what is rightly due
to them.
The Court directed that 'if no such Act is in force in Goa, it is time that the state of Goa
takes necessary steps to bring into force an appropriate legislation providing for adjudication
of disputes between teachers and managements of educational institutions. The Court hoped
that the lacuna in the legislative area will be filled soon.
The aforesaid view was reiterated in Ahmedabad Pvt. Primary Teachers Association v.
Administrative officer .106

5. Doctor-If a Workman
Is a doctor who has been performing duties of technical nature a workman irrespective
of the fact whether the hospital is charitable or not, under the Industrial Disputes Act? In
Surendra Kumar v. Union of India 107, the petitioner was employed as assistant medical officer
Class II to treat patients who were employees of the railways and their families. He was
also required to meet the administrative requirement where he was in charge of the hospital
of a wealth unit. The staff was also under his administrative control. On these facts, the
division bench of Allahabad High Court held that the duties of the doctor were technical
and not supervisory. The Court accordingly held that the doctor was a 'workman' under
Section 2(s) of the Industrial Disputes Act, 1947. However, the division bench of the Kerala
High Court in Mar Basellos Medical Mission Hospital v. Dr Joseph Babu 108 held that a senior
doctor engaged in diagnosis and treabnent of patients was not a workman under the IDA.
The court gave the following reasons.
(i) A post-graduate doctor was engaged at a fairly high salary for treabnent of patients
as a senior doctor in the deparbnent of medicine.
(ii) His work is essentially to diagnose diseases of patients and treat the same.
(iii) A senior doctor is always assisted by a team of junior doctors, medical attendants,
nurses, etc., and it is the duty of the senior doctor to ensure examination of the patient
by way of x-ray, blood test, etc., and that the treabnent suggested by him is carried
out strictly in accordance with his instructions.
(iv) No one can doubt that any subordinate employee disobeying the doctor's instructions
will do so expect at the risk of disciplinary action.

106 (2004)1 sec 755.

107 1986 Lab. IC 1516 (Alld.)
108 2010 LLR 376.
 Workmen • 263

Thus, he was engaged in supervisory and technical work, even if a doctor's work is
only technical in nature.
InM M Wadia Charitable Hospital v. (Dr) Umakant Ramchandra Warerkar 109, the Bombay
High Court held that a doctor, though employed and rendering professional services will
not be a 'workman' under the Act. The Supreme Court in Workmen ofDimakuchi Tea Estate v.
Dimakuchi Tea Estate110 while construing Section 2 (s) (as it existed prior to 1956 amendment)
held that the duties performed by a medical practitioner were of a technical nature.

6. Apprentice: If Workman
Does an apprentice ipso facto become a 'workman' merely because Section 2(s) specifically
includes 'apprentice" within its fold? The Supreme Court in Workmen of Hindustan Lever
Ltd v. Hindustan Lever Ltd 111 held that if the employer takes the kind of work mentioned
in Section 2 (s) from the apprentice, the dispute between them would be settled under the
Industrial Disputes Act, 1947. But if the apprentices do not perform such work, the Industrial
Disputes Act will not apply to them.
InMukesh K Tripathiv. Senior Divisional Manager, LI C and Ors 112, the Supreme Court while
dealing with the case of apprentice observed that the definition of 'workmen' as contained
in Section 2(s) of the Industrial Disputes Act, 1947 includes an apprentice, but a 'workman'
defined under the Industrial Disputes Act, 1947 must conform to the requirements laid down
therein meaning thereby, inter alia, that he must be working in one or the other capacities
mentioned therein and not otherwise. The Court added:
(i) A 'workman' within the meaning of Section 2(s) of the Industrial Disputes Act, 1947
must not only establish that he is not covered by the provisions of the Apprenticeship
Act but must further establish that he is employed in the establishment for the
purpose of doing any work contemplated in the definition. Even in a case where a
period of apprenticeship is extended, a further written contract carrying out such
intention need not be executed. But in a case where a person is allowed to continue
without extending the period of apprenticeship either expressly or by necessary
implication and regular work is taken from him, he may become a workman. A
person who claims himself to be an apprentice has certain rights and obligations
under the statute.
(ii) In case any person raises a contention that his status has been changed from apprentice
to a workman, he must plead and prove the requisite facts. In absence of any pleading
or proof that either by novation of the contract or by reason of the conduct of the
parties, such a change has been brought about, an apprentice cannot be held to be a
workman.
In Dhampur Sugar Mills Ltd v. Bhola Singh 113, the Supreme Court held that an apprentice
or trainee appointed in terms of the Apprentices Act, 1961 is not a workman.

109 (1997) 2 LLJ 549.

110 Workmen of Dimakuchi Tea Estate v. Dimakuchi Tea Estate, (1958) 1 LLJ 500.
111 (1999} 1 LLJ 449.
112 (2004} 1 LLR 993.
113 (2005) LLR 320.
264 • Industrial Relations and Labour Laws

7. Trainees
In Trambak Rubber Industries Ltd v. Nasik Workers' Union 114, a question arose whether the
'trainees' where the entire production activity in the company was carried out with none
other than the trainees were workmen under Section 2(s) of Industrial Disputes Act, 1947.
The Supreme Court answered the question in the affirmative. In this case, the company
which employed only trainees to run the production activity were not allowed to resume
work on and from 14 August 1989 unless they gave an undertaking on the employer's
term. The employer terminated their services with effect from 15 November 1989. The
industrial court held that they were trainees because (i) neither the complainant union nor
the management had placed on record the appoinbnent letters that would have been issued
when the persons concerned were recruited in 1988; (ii) merely because the trainees were
employed for performing regular nature of work would not by itself make them workmen;
(iii) a trainee is not equivalent to a 'workman' unless there is sufficient evidence of existence
of employer-employee relationship. On a writ petition the High Court held that the persons
concerned whose engagement was terminated were not trainees but they were 'workmen'
and therefore, their services could not have been terminated without following the due
procedure. On a special leave, the Supreme Court observed:

According to the industrial court, the fact that the 'trainees' were employed for
performing the regular nature of work would not by itself make them workmen.
The question then is, would it lead to an inference that they were trainees? The
answer must be clearly in the negative ... .It is pertinent to note the statement
of the management's witness that in June-July 1989, the company did not
have any permanent workmen and all the person employed were trainees. It
would be impossible to believe that the entire production activity was being
carried on with none other than the so-called trainees. If there were trainees,
there should have been trainers too. The management evidently came forward
with a false plea dubbing the employees/workmen as trainees so as to resort
to summary termination and deny the legitimate benefits.
Can a trainee who has undergone 3 years' training claim status mentioning him to be
confirmed? This question was raised in Shri Vijay Kumar v. Presiding Judge, Labour Court 115 •
Dealing with this question, the Himachal Pradesh High Court held that where the petitioner
was only a trainee, never became workman and was never offered employment after
completion of training, the mere fact that a wage slip mentioned that petitioner has been
confirmed will not make him a confirmed employee. In order to become workman, there
should be a separate order confirming him on successful completion of training.

8. Probationer: If Workman
In Hutchiah v. Karnataka State Road Transport Corporation 11 6, a question arose whether a person
appointed on probation for doing work for the industry and receiving salary therefor was
a 'workman'. This issue was answered in the affirmative by the Karnataka High Court. 117
The Court observed:

114 (2003) 6 sec 416.

115 (1983) 1 LLJ 30.
116 Id. at 37.
117 (2000) lab. IC 2468.
 Workmen • 265

The definition of the word 'workman' given in Section 2(s) of the Act
without causing the least violence to the language used, is susceptible of
only meaning that every person employed in an industry irrespective of his
status-temporary, permanent or probationary, would be a workman. Only
such persons employed in an industry who fall within the excepted categories
specified in clauses (i) to (iv) of that provision would not be workmen for the
purpose of the Act. It is not the case of the corporation that a probationer falls
within any of the excepted categories.
The Court 'accordingly' held that exclusion of probationary from the purview of Section
2(s) would do violence to the language of the provision.

9. Domestic Servant - Not Workman

In Management of Som Vihar Apartment Owners Housing Maintenance Society Ltd v. Workmen
C/o Indian Engg. & General Management 118 , the Supreme Court ruled that service rendered
by a domestic servant is purely a personal or domestic matter and, therefore, falls outside
the purview of 'workman' under the Industrial Disputes Act. The Court referred to its
earlier decision in Bangalore Water Supply & Sewerage Board119 and observed that it is not an
authority for the proposition that domestic servants are also to be treated to be workmen
even when they carry out work in respect of one or many masters. The Court observed
that the whole purpose of the ID Act is to focus on resolution of industrial disputes and the
regulation will not meddle with every little carpenter or a blacksmith, a cobbler or a cycle
repairer who comes outside the ambit of industry and rendered service to the members of a
society, which is constituted only for the benefit of those members; employees engaged by it
for rendering such services cannot be said to be 'workmen' under Section 2(s) of the ID Act.
The aforesaid view was reiterated inMd. Manjur & Ors v. Syam Kunj Occupants' Society
& Others. 120

1O. Legal Representative of Deceased Workman: If Workman

Does the definition of 'workman' include heir or the legal representative of deceased
workman? This issue figured in Veerarnani v. Madurai District Cooperative Supply and
Marketing Society Ltd. 121 The Madras High Court, however, answered it in negative because
the definition of 'workmen does not include the heir or the legal representative of a deceased
workman.'

11. Gardener
The Supreme Court in M/s Bharat Heavy Electricals Ltd v. State of Uttar Pradesh122 was
called upon to determine whether gardeners engaged through contracts for upkeeping
parks inside factory premises and residential colonies were workmen under the Industrial
Disputes Act, 1947 read with Uttar Pradesh Industrial Disputes Act, 1947. In this case, the

118 (2000) Lab. IC 2468.

119 (2002) (9) sec 652.
120 (2004) LLR 863.
121 (1983) 2 LLJ 88 (Madras).
122 (2003) LLR 817.
266 • Industrial Relations and Labour Laws

respondents were engaged as gardeners (malis) to sweep, clean, maintain and look after
the lawns and parks inside the factory premises and the campus of the residential colony
of Ml s Bharat Heavy Electricals Ltd through the agency of the respondent. Their services
were terminated on 1 December 1988. They raised industrial dispute before the labour court.
The company took the plea that they were never employed by it and it was not liable to pay
any amount of compensation or to reinstate them in service. The labour court directed their
re-employment and payment of compensation. Aggrieved by the award, the appellant filled
writ petition before the High Court. The High Court dismissed the petition. Aggrieved by
this finding, the company filed an appeal before the Supreme Court. While dealing with
the status of gardeners, the Supreme Court ruled that where workman-labour is engaged
to produce goods or services and these goods or services are for the business of another,
the other is employer. The Court also held that the work of the respondent workmen is not
totally disassociated for the appellant to say that they were not employees of the appellant.
The Court held that the definition of 'employer' given in Section 2(i) (iv) of the Act is
an inclusive definition. If the respondents-workmen as a matter of fact were employed with
the appellant to work in their premises and which fact is found established after removing
the mask or facade of make-believe employment under the contractor, the appellant cannot
escape its liability.
The Court also drew attention to a vital fact that the appellant did not produce the
records alleging that they were not available and this led to adverse inference against it.
A perusal of the aforesaid judgement reveals that the Court distinguished this case
with the decision given by the Constitution bench of this Court in Steel Authority of India
Ltd & Ors. v. National Union Waterfront Workers 123 • Be that as it may, the judgement does not
meet the requirement of global competition which is the main demand of the employer.

12. Piece-Rated Workers

In Shining Tailors v. Industrial Tribunal 124, the Supreme Court held that tailors working
on piece rate basis in a big tailoring establishment were workmen of the owner of the
establishment. The Court cautioned that every piece-rated workman is not an independent
contractor and that piece-rated payment meaning thereby payment correlated to production
is a well-recognized mode of payment to industrial workmen.

13. Legal Assistant/Legal Advisor: If Workman

In Management of Sonepat Cooperative Sugar Mills Ltd v. Ajit Singh 125, the respondent was
appointed to the post of 'legal assistant', the qualification for which was a degree in law
with a practising licence. The nature of his duties was to prepare written statements and
notices, recording equity proceedings, giving opinions to the management, drafting, filing
the pleadings and representing the appellant in all types of cases. He was also conducting
deparbnental enquiries against workmen in the establishment. He was placed on probation
and his post was dispensed with, following which he was terminated. He raised an industrial
dispute. The question before the labour court was 'Whether the applicant was a workman';

123 JT (2001) (7) SC 268.

124 AIR 1984 SC 268.
125 (2005) LLR 309.
 Workmen • 267

labour court held he was a workman, which was upheld by High Court. Management
preferred an appeal to the Sugreme Court. Following its earlier decisions in A Sundarambal
v. Govt of Goa, Daman & Diu 26, and H R Adyanthaya v. Sandoz (India) Ltd, 127 and rejecting
SK Verma v. Mehesh Chandra (supra), this Court held:

Thus, a person who performs one or the other jobs mentioned in the
aforementioned provisions only would come within the purview of the
definition of workman. The job of a clerk ordinarily implies stereotyped
work without power of control or dignity or initiative or creativeness. The
question as to whether the employee has been performing clerical work or
not is required to be determined upon arriving at a finding as regards the
dominant nature thereof. With a view to give effect to the expression to do
any manual, unskilled, skilled, technical, operational, clerical or supervisory
work, the job of the employee concerned must fall within one or the other
category thereof. It would not be correct to contend that merely because the
employee had not been performing any managerial or supervisory duties,
ipso facto he would be a workman ... The respondent had not been performing
any stereotyped job. His job involved creativity. He not only used to render
legal opinion on a subject but also used to draft pleadings on behalf of the
appellant as also represent it before various courts/ authorities. He would
also discharge quasi-judicial functions as an inquiry officer in deparbnental
enquiries against workmen. Such a job, in our considered opinion, would not
make him a workman.
In Sonipat Central Cooperative Bank Ltd v. Presiding Officer, Industrial Tribunal-cum-Labour
Court128, the Punjab and Haryana High Court held that an advocate/legal advisor cannot
come under the definition of 'workman'.

14. Appraiser: If Workman

In Puri Urban Cooperative Bank v. Madhusudan Sahu 129, the Supreme Court held that the
appraiser engaged by a bank to appraise quality, purity and value of ornaments offered for
pledging to bank was not a 'workman' because there was no master and servant relationship
between the employer and the appraiser.

15. Research Fellow: If Workman

Delhi High Court in Jamia Hamdard v. KS Durrany 130 held that a research fellow of Jamia
Hamdard, a deemed university, doing his own research during the tenure of fellowship,
guiding research and helping the administration of the deparbnent's quarterly was not a
'workman' under Section 2(s) of the Industrial Disputes Act, 1947, because his functions
were purely academic.

126 2012 LLR 26.

127 AIR 1994 SC 2608.
128 2012 LLR 26.
129 1993 Lab. IC 1462.
130 (1992) 1 LLJ 874 (Delhi).
268 • Industrial Relations and Labour Laws

16. Driver: If Workman

In Mahajan Borewell Company v. Rajaram Bhat131, the Karnataka High Court held that a geologist
provided with a driver to drive his vehicle and a helper to assist him in transportation of
instruments was not exercising supervisory, administrative or managerial function. Hence
he was held to be a 'workman'.

17. Other Cases

Persons employed as carpenters with Kurukshetra University, Kurukshetra,132 a conductor
in Road Transport Corporation,133 employees employed to do skilled, manual, clerical
or technical work, irrespective of their salary,134 temporary employees of municipal
corporation completing 240 days of service,135 clerk who is miscalled the branch manager
of a central cooperative bank,136 employees of the cafetaria to provide food service to
the residents of the hostel and others in the G B Pant University of Agriculture and
Technology137, drivers of UP Scheduled Caste Finance and Development Corporation Ltd,
getting salary less than f500 /- per month as it then was,138 have been held to be workmen
within the meaning of Section 2(s). Pujaris of temples,139 persons supervising work of
maintenance in the capacity of maintenance engineers having power to grant leave 140, an
appraiser engaged by a bank to appraise quality, purity, value of ornaments offered for
pledging to bank, 141 and daily rated lower division clerks in the Famine Relief Section142
have been held not to be workmen under Section 2(s).

G. Current Approach of the Supreme Court on the Interpretation of Section 2(s)

In Devinder Singh v. Municipal Council, Sanaur 143, the Supreme Court ruled:
1. The source of employment, the method of recruibnent, the terms and conditions of
employment/ contract of service, the quantum of wages/pay and the mode of payment
are not at all relevant for deciding whether or not a person is a workman within the
meaning of Section 2(s) of the Act.
2. The definition of workman also does not make any distinction between full-time and
part-time employees or a person appointed on contract basis. There is nothing in the
plain language of Section 2(s) from which it can be inferred that only a person employed

131 (1998) LLR 363 (Karnataka).

132 2002 Lab. IC 2249.
133 R Mallesham v. The Additional Industrial Tribunal, Malakpet, Hyderabad, (1990) Lab. IC NOC 158 (Andh.

Prad.).
134 Iqbal Hussain Qureshi v. Asstt. Labour Commissioner, (1990) Lab. IC NOC 131 (MP).
135 Mam Chand v. State of Haryana. (1989) Lab. IC NOC 42 (P & H).
136 Nirmal Singh v. The State of Punjab, (1984), SLJ (P & H) 674.
137 GB Pant University of Agriculture & Technology v. State of U.P. (2000) SCC.
138 Nathaniel Masih v. UP Scheduled Caste Finance & Development Corporation Ltd, (1989) 2 Lab. IC 2276
(All).
139 Kesavo Bhat v. Sree Ram Ambulam Trust, (1990) Lab. IC NOC 104 (Kerala).
140 Vimal Kumar Jain v. Labour Court, Knapur, AIR (1988) SC 384.
141 Management of Puri Urban Cooperative Bank v. Madhusnhan Sahu, (1992) Lab. IC 1462 (SC).
142 State of Rajasthan v. Babu Khan, (1994) Lab. IC 181 (Rajas than).
143 2011 LLR 785 (SC).
 Workmen • 269

on regular basis or a person employed for doing whole-time job is a workman and the
one employed on temporary, part-time or contract basis on fixed wages or as a casual
employee or for doing duty for fixed hours in not a workman.
3. Whenever an employer challenges the maintainability of industrial dispute on the
ground that the employee is not a workman within the meaning of Section 2(s) of
the Act, what the labour court/industrial tribunal is required to consider is whether
the person is employed in an industry for hire of reward for doing manual, unskilled
skilled, operational, technical or clerical work in an industry. Once the test of
employment for hire or reward for doing the specified type of work is satisfied, the
employee would fall within the definition of 'workman'.
From the above, it appears that the definition does not exclude persons employed on
(i) temporary basis, (ii) part-time, (iii) contract basis on fixed wages, (iv) casual employees
or (v) for doing duty for fixed hours. The Court has also brushed aside various tests laid
down by it in its earlier decisions.

H. Recommendations of the [Second] National Commission on Labour

The [Second] National Commission on Labour has recommend that government may lay
down a list of such highly paid jobs which are presently deemed to be employing workmen
as being outside the purview of the laws relating to workmen and included in the proposed
law for the protection of non-workmen. Another alternative is that the government fix a
cut-off limit of remuneration which is substantially high, in the present context, such as
f25,000/-p.m. beyond which employees will not be treated as ordinary 'workmen'.
The Commission has also recommended that supervisors would be kept out of
definition of 'workers' and would be clubbed alongwith managerial and administrative
employees.

I. Employer
Section 2(g) of the Act defines an 'employer' to mean:
(i) in relation to an industry carried on by or under the authority of any deparbnent of
the Central Government or a state government, the authority prescribed in this behalf,
or where no authority is prescribed, the head of the deparbnent;
(iz) in relation to an industry carried on by or on behalf of a local authority, the chief
executive officer of that authority.
In Western India Automobile Association v. I. T. 144, the federal court held the statutory definition
to be neither exhaustive nor inclusive. Observed Justice Mahajan:
In relation to (industries carried on by government and local authorities) a definition
has been given of the term 'employer' ... No attempt, however, was made to define the
term 'employer' generally or in relation to other persons carrying on industries or running
undertakings. 145

144 Western India Automobile Association v. Industrial Tribunal, Bombay, (1949) LLJ 245 (FC).
145 Id. at 245,248.
270 • Industrial Relations and Labour Laws

The proposition has since not been challenged though, paradoxically, the provisions
of the Act have never been invoked to resolve industrial disputes arising in 'an industry
carried on by or under the authority of any deparbnent of the Central or a state government'.
An' employer' does not cease to be an' employer' merely because, instead of employing
workmen himself, he authorizes his agents or servants to employ them. 146 Further, in
view of the provisions of Section 18, judicial pronouncements have extended the coverage
of expression 'employer' to include his heirs, successors and assignees. However, only
those who are currently employees of the transferee-employer can be lawful participants
in an 'industrial dispute' and raise a dispute concerning such erstwhile emrloyees of the
transferor-employer as have not been employed by the transferee employer .14 The erstwhile
employees of the transferor-employer cannot, unless they are employed by the transferee-
employer, themselves raise an industrial dispute with the transferee-employer. 148 This is
so because of the requirement of master and servant relationship between the disputants.

146 Purushottam Pottery Works, Dharangdhara, (1958) 2 LLJ 523 (IT); Bombay Dock Labour Board v. Stevedore
Workers, (1954) 2 LLJ 200 (IT).
147 Dahingeapara Tea Estate v. Their Workmen, (1956) 1 LLJ 187 (LAT) Kays Construction Co. (P) Ltd v. Its
Workmen, (1958) 2 LLJ 660 (SC).
148 Anakapalla Cooperative Agricultural & Industrial Society v. Its Workmen (1962) 2 LLJ 621 (SC).
Settlement of
Industrial Disputes 17
Labour management relations involve dynamic socio-economic process. Both parties,
namely, labour and management, constantly, strive to maximize their preferred values by
applying resources to institutions. In their efforts, they are influenced by and are influencing
others.
The objectives of labour and management are not amenable to easy reconciliation. For
instance, labour and management are interested in augmenting their respective incomes and
improving their power position. Since, however, the resources are limited, interest of one
party conflicts with the other. Further, the means adopted to achieve the objective which
vary from simple negotiation to economic warfare adversely affectthe community's interests
in maintaining an uninterrupted and high level of production. Moreover, in a country like
ours where labour is neither adequately nor properly organized, unqualified acceptance of
the doctrine of 'free enterprise', particularly between labour and management strengthens
the bargaining position of already powerful management.
In order, therefore, to protect the interest of the community as well as that of labour
and management, legislature has found it necessary to intervene in labour management
relations. Thus, the Industrial Disputes Act, 1947 provides for the constitution of various
authorities to preserve industrial harmony. At the lowest level is the works committee.
The various machineries for investigation and settlement of industrial disputes under the
Act are (i) conciliation (ii) court of inquiry (iii) adjudication and (iv) voluntary arbitration.
Quite apart from the aforesaid statutory machineries, several non-statutory machineries
such as code of discipline, joint management council, tripartite machinery and joint
consultative machinery play an important role in the process of preventing and settling
industrial disputes.

The institution of works committee was introduced in 1947 under the Industrial Disputes Act
1947, to promote measures for securing and preserving amity and good relations between
272 • Industrial Relations and Labour Laws

employers and workmen. 1 It was meant to create a sense of partnership or comradeship

between employers and workmen. 2 It is concerned with problems arising in day-to-day
working of the establishment and to ascertain grievances of the workmen.3

A. Constitution of Works Committee

Industrial Disputes (Central) Rules
The Industrial Disputes Act, 1947 empowers the appropriate government to require an
employer having 100 or more workmen to constitute a works committee. Such a committee
shall consist of representatives of employers and workmen engaged in the establishment.
However, the number of representatives of the workmen shall not be less than the number
of representatives of the employer.
The Industrial Disputes (Central) Rules, 1957, Rule 39 contemplates that the number of
representatives of the workmen shall not be less than the number of representatives of
the employer and further that the total number of members shall not exceed 20. Rule 40
contemplates that the representatives of the employer shall be nominated by the employer
and shall, as far as possible, be officials in direct touch with or associated with the working
of the establishment. Rule 41 envisages that the employer shall ask the registered trade union
of the workmen in the concerned establishment to inform the employer in writing as to how
many of the workmen are members of that union and how their membership is distributed
among the sections, shops or deparbnents of the establishment. In other words, the employer
is required to ask the registered trade union to supply him the nominal roll of members of
the trade union. The election held without consultation with the trade union is liable to be
set aside.4 Rule 42 provides that on receipt of the said information from the registered trade
union, the employer shall provide for the election of representatives of the workmen on the
works committee in two groups: (i) those to be elected by the workmen who are members of
the registered trade union and (ii) those to be elected by the workmen who are not members
of the registered union. It is further provided that the number of two groups should bear
same proportion to each other as the union members in the establishment bear to the non-
members. The first proviso to this rule contemplates that where more than half the workmen
are members of the union or any one of the unions, the above kind of division in two groups
shall not be made. This shows that where in an industrial establishment the majority of workers
are members of a registered trade union, the distribution of the elected representatives as
provided in Rule 42 in two groups will not be necessary5. In other words, in that situation, the
representatives of the workmen will be elected in a single group without any kind of division.
It is not provided that if the union has majority of the workers as its members, then nomination
of the representatives of the workmen may be done by the employer in consultation with the
trade union. Thus, there cannot be any nomination of representatives of workmen on the
works committee. The scheme of these rules for constitution of works committee has been
fully explained in Union of India v. MTS S D Workers Union, 6 as follows:

1 Section 3(2) of the Industrial Disputes Act, 1947.

2 See RF Rustamji, The Law of Industrial Disputes in India, (1962}, 219.
3 See Kemp and Co. Ltd v. Its Workmen, (1955) 1 LLJ 48 (LAT}.
4 Praful Mohan Das v. SAIL, (1992} 1 LLJ 621.
5 Bangali Raje v. Union of India, (1993} Lab. IC 812.
6 AIR 1988 SC 633.
 Settlement of Industrial Disputes • 273

(a) Where there is a registered trade union having more than 50 per cent
membership of the workers in that establishment, the total number of
members of the works committee will be elected without distribution of any
constituencies, (b) if in an industry no trade union registered under Trade
Unions Act represents more than 50 per cent of the members, then only the
election will be held in two constituencies, one from the members of the
registered trade union or unions and the other from non-members of the
trade unions and it is only in this contingency, it is further provided that if
the employer thinks proper, (he) may further subdivide the constituency into
deparbnent, section or shed.
In B Chinna Rao v. Naval Civilian Employees Union 7, Andhra Pradesh High Court was
invited to interpret Rule 41 of the Industrial Disputes (Central) Rules, 1957 which reads as
under:
Rule 41: Consultation with trade unions:
(i) Where any workmen of an establishment are members of a registered trade
union; the employer shall ask the union to inform him in writing (a) how
many workmen are members of the union, and (b) how their membership is
distributed among the sections, shops or deparbnents of the establishment.

(ii) Where an employer has reason to believe that the information furnished to
him under sub-rule (i) by any trade union is false, he may, after informing
the union, refer the matter to the assistant labour commissioner (central)
concerned for his decision; and the assistant labour commissioner, after
hearing the parties shall decide the matter and his decision shall be final.
While interpreting the aforesaid provisions, the Court held that reference to the
commissioner has to be made when the employer has 'reason to believe that the information
furnished to him by the trade union is false'. False doubt expressed by the employer need
not necessarily entail a reference. If a mere perusal of the list furnished by a trade union
enables an employer to form a definite opinion, he can certainly act accordingly. Since the
reference to the commissioner would have the effect of postponing the election, recourse
must be had only when it is otherwise necessary and mandatory.

B. Functions of Works Committee

The main function of the works committee is 'to promote measures for securing and
preserving amity and good relations between the employers and workmen and, to that end,
to comment upon matters of their common interest or concern and endeavour to compose
any material difference of opinion in respect of such matters.' 8 Thus, the works committees
are normally concerned with problems of day-to-day working of the concern. They are 'not
intended to supplant or supersede the union for the purpose of collective bargaining. They are
also not entitled to consider real or substantial changes in the conditions of service. Their task
is only to reduce friction that might arise between the workmen and the management in the
day-to-day working. The decision of works committee is neither agreement nor compromise

7 2011 (1) SLR 375.

8 See Section 3(2).
274 • Industrial Relations and Labour Laws

nor arbitrament. Further, it is neither binding on the parties nor enforceable under the
Industrial Disputes Act. It is true that according to the Supreme Court the 'comments' of
the works committee are not to be taken lightly but it is obvious that the observation has
relevance only where a third party gets involved in the claim adjusbnent process. As between
the disputants, these comments, have only added persuasive value. But, by no stretch of
imagination can it be said that the duties and functions of the works committee include the
decision on such an important matter as an alteration in conditions of service.'9

C. Operation and Assessment

We shall now turn to discuss the functioning of the works committee and assess its working.
A survey of the functioning of the works committee reveals that during 1997, 869
works committees were actually formed in the central sphere establishment involving
8,16,924 workers out of the 1,131 works committees to be formed involving 11,79,577
workers. 10 Be that as it may, the works committees on the whole failed to deliver the goods.
Several factors are responsible for the same. First, in the absence of strong industry-wise
labour organization, the politically-oriented trade unions consider works committees to
be just another rival. The elaborate provisions for securing representation of registered
trade unions for proportional representation of union and non-union workmen and the
possibility of further splitting of electoral constituencies into groups, sections, deparbnents
or shops not only accentuates the problem of rivalry but also weakens the strength of
workmen in such committees. Second, notwithstanding the parity between workmen's and
employers' representatives, the fact that the chairman of the committee is nominated by
the employer from amongst his own representatives, has often helped the management to
maintain an upper hand in the proceedings. Unwelcome items on the agenda are promptly
declared to be out of order on one ground or the other. Absence of statutory provisions
defining jurisdiction of these committees only helps the recalcitrant employer. Lastly,
although tribunals and courts feel that' agreed solution between the works committee and
the management are always entitled to great weight and should not be readily disturbed',
the fact remains that there is no machinery to enforce the decisions of these committees.
Indeed, there is nothing to prevent by-passing of works committee. Perhaps it will be
incorrect to say that most of the disputes that come up for adjudication have never been
discussed in the works committee. Confronted with this situation, particularly in the
absence of statutory provisions, the tribunals and courts have invariably held that non-
discussion is no bar to reference by the government.

D. Remedial Measures
The [First] National Commission on Labour suggested the following measures for the
successful functioning of a works committee:
(a) A more responsive attitude on the part of management
(b) Adequate support from unions
(c) Proper appreciation of the scope and functions of the works committee
(d) Whole-hearted implementation of the recommendations of the works committee

9 See M/s Northbrook Jute Co. Ltd v. Their workmen, AIR 1960 SC 879.
10 See Government of India, Ministry of Labour, Annual Report (1997) 29.
 Settlement of Industrial Disputes • 2 7 5

(e) Proper coordination of the functions of the multiple bipartite institutions at the plant
level now in vogue
The Commission also added:

It is the creation of an abnosphere of trust on both sides. Unions should feel that
management is not sidetracking the effective union through a works committee.
Management should equally realize that some of their known prerogatives are
meant to be parted with. Basic to the success of such unit level committees is
union recognition. 11
It is submitted that for the success of a works committee, the following steps should
be taken: (i) Trade unions should change their attitude towards the works committee. The
unions should feel that management is not sidetracking the effective union through a works
committee, (iz) The management should also realize that some of their known prerogatives
are meant to be parted with, (iii) Recognition of trade unions should be made compulsory
and the provisions therefore should be incorporated in the Trade Unions Act, 1926.

Experience shows that in the day-to-day running of business, disputes between the employer
and workmen are resolved by administrative process referred to as grievance procedure. 12
The Indian Labour Conference has also adopted a similar concept of a grievance in its
following recommendations: 13

Complaints, affecting one or more individual workers in respect of their wage

payments, overtime, leave, transfer, promotion, seniority, work assignment,
working conditions and interpretation of service agreement, dismissal and
discharges would constitute grievance. Where the points of dispute are of
general applicability or of considerable magnitude, they will fall outside the
scope of grievance procedure.
The aforesaid concept has also been adopted in the guiding principles for a grievance
procedure appended to the Model Grievance Procedure in India. 14 Further, Clause 15 of
the Model Standing Orders in Schedule I of the Industrial Employment (Standing Orders)
Central Rules, 1946, specifies that' all complaints arising out of employment including those
relating to unfair treabnent or wrongful exaction on the part of the employer or his agent,
shall be submitted to the manager or the other person specified in this behalf with the right
to appeal to the employers.' Moreover, the state governments have framed rules under the
Factories Act, 1948 requiring a welfare officer to ensure settlement of grievances.

11 See Government of India, Report of the [First] National Commission on Labour, (1969) 343.
12 I L I, Labour Law and Labour Relations (Ed. Suresh C Srivastava (2007) 53.
13 IL O,ReportNo. VII (2), (1966). SeealsoGovemmentoflndia,Reportof [First] National Commission
on Labour, (1969), 23.
14 Likewise, in the United States, a grievance has been defined as 'a formal complaint over an allegation
by an employees' union... that... a collective bargaining contract, company policy or agreement has
been violated.' See Society of the Advancement of Management, Glossary of Personnel Management and
Industrial Relations Terms, New York. (1959), 18.
276 • Industrial Relations and Labour Laws

The Voluntary Code of Discipline adopted by the Sixteenth Session of the Indian
Labour Conference in 1958 also provides that: (a) the management and unions will establish,
upon a mutually agreed basis, a grievance procedure which will ensure a speedy and full
investigation leading to settlement, and (b) they will abide by the various stages in the
grievance procedures. 15 However, there is no legislation in force which provides for a well-
defined and adequate procedure for redressal of day-to-day grievances in an industrial
establishment. In order to meet the shortcoming, the Industrial Disputes (Amendment) Act,
1982, provides for setting up of grievance settlement authorities and reference of certain
individual disputes to such authorities. Section 9C of the amended Act provided:
(1) The employer in relation to every industrial establishment in which 50 or more
workmen are employed or have been employed on any day in the preceding 12 months,
shall provide for, in accordance with the rules made in that behalf under this Act, a
grievance settlement authority for the settlement of industrial disputes connected with
an individual workman employed in the establishment.
(2) Where an industrial dispute connected with an individual workman arises in an
establishment referred to in sub-section (1), a workman or any trade union of workmen
of which such workman is a member, refer, in such manner as may be prescribed, such
dispute to the grievance settlement authority provided for by the employer under that
sub-section for settlement.
(3) The grievance settlement authority referred to in sub-section (1) shall follow such
procedure and complete its proceedings within such period as may be prescribed.
(4) No reference shall be made under Chapter III with respect to any dispute referred to in
this section unless such dispute has been referred to the grievance settlement authority
concerned and the decision of the grievance settlement authority is not acceptable to
any of the parties to the dispute.
However, the aforesaid provisions of the Industrial Disputes (Amendment) Act,
1982, have not been enforced, presumably because the Hospitals and Other Institutions
(Settlement of Disputes) Bill, 1982, has not so far been passed. Further, no rules were framed
under the unenforced Section 9C. The (Second) National Commission on Labour in 2002
has recommended that a grievance redressal committee for organizations employing 20 or
more workers be constituted. But no legislative or administrative action was taken till 2010.

Grievance Redressal Machinery

In 2010, the Industrial Disputes (Amendment) Act, 2010 16 inserted new chapter IIB on
grievance redressal machinery. Section 9C of the Amendment Act provides as follows:
(1) Every industrial establishment employing 20 or more workmen shall have
one or more grievance redressal committees for the resolution of disputes arising
out of individual grievances.
(2) The grievance redressal committee shall consist of equal number of
members from the employer and the workmen.
(3) The chairperson of the grievance redressal committee shall be selected
from the employer and from among the workmen alternatively on rotation
basis every year.

15 Government oflndia, Code of Discipline in Industry (1961) 2-3.

16 The Amendment Act came into force w.e.f. 15th September, 2010.
 Settlement of Industrial Disputes • 277

(4) The total number of members of the grievance redressal committee shall
not exceed six:
Provided that there shall be, as far as practicable, one woman member if the
grievance redressal committee has two members and in case the number of
members are more than two, the nwnber of women members may be increased
proportionately.
(5) Notwithstanding anything contained in this section, the setting up of
grievance redressal committee shall not affect the right of the workman to
raise industrial dispute on the same matter under the provisions of this Act.
(6) The grievance redressal committee may complete its proceedings within 30
days on receipt of a written application by or on behalf of the aggrieved party.
(7) The workman who is aggrieved of the decision of the grievance redressal
committee may prefer an appeal to the employer against the decision of
grievance redressal committee and the employer shall, within one month from
the date of receipt of such appeal, dispose of the same and send a copy of his
decision to the workman concerned.
(8) Nothing contained in this section shall apply to the workmen for whom
there is an established grievance redressal mechanism in the establishment
concerned.

A. General
Conciliation is a persuasive process of settling industrial disputes. It is a process by which
a third party persuades disputants to come to an equitable adjusbnent of claims. The
third party, however, is not himself a decision maker: he is merely a person who helps the
disputants through persuasion to amicably adjust their claims. The ultimate decision is of
the disputants themselves. For this purpose, the Industrial Disputes Act, 1947, provides
for the appoinbnent of conciliation officers and constitution of board of conciliation by the
appropriate government for promoting settlement of industrial disputes. For the successful
functioning of the conciliation machinery, the Act confers wide powers and imposes certain
duties upon them.
Conciliation as a mode of settling industrial disputes has shown remarkable success in
many industrialized countries. It is said that it has proved to be a great success in Sweden. 17
In India, it has generally been reported that conciliation machinery has played an
important role in resolving industrial disputes. Statistics no doubt, supports this claim.
During 2008-2009, the Central Industrial Relations Machinery (CIRM) intervened in 397
threatened strikes and its conciliatory effort succeeded in averting 362 strikes which represent
a success rate of 95.5 per cent. In the year, the number of disputes received by CIRM were
8,586, number of disputes in which formal conciliation was successful were 1,377 and nwnber
of disputes in which conciliation proceeding ended in failure were 1,798.

17 See Foenander, Industrial Conciliation and Arbitration in Australia, (1959), 95.

2 7 8 • Industrial Relations and Labour Laws

The statistics of the working of the conciliation machinery reveal that the conciliation
machinery at central level is extremely high in many states. It has, however, made no
remarkable success in several states. Several factors may be accounted for the same. First,
failure of conciliation proceeding may lead to the reference to adjudicating authorities
under the Industrial Disputes Act, 1947. 18 Second, lack of proper personnel, inadequate
training and low status enjoyed by conciliation officers and frequent transfers of conciliation
officers result in the failure of conciliation. 19 Third, undue emphasis on legal and formal
requirements also leads to the failure of conciliation. Fourth, considerable delay in conclusion
of conciliation proceedings also makes the conciliation machinery ineffective. Fifth, failure
of conciliation machinery has been attributed to lack of adequate powers of conciliation
authorities.

B. Conciliation Authorities
1. Constitution of Conciliation Authorities
(a) Appointment of Conciliation Officer. Under Section 4, the appropriate government is
empowered to appoint conciliation officers for promoting settlement of industrial
disputes. These officers are appointed for a specified area or for specified industries
in a specified area or for one or more specified industries,2° either permanently or for
a limited period.
(b) Constitution of Board ofConciliation. Where dispute is of complicated nature and requires
special handling, the appropriate government is empowered to constitute a board
of conciliation. The boards are preferred to conciliation officers. However, in actual
practice it is found that boards are rarely constituted. Under Section 10(1) (a), the
appropriate government is empowered to refer the existing or apprehended dispute
to a board. The board is constituted on an ad hoe basis. It consists of an independent
person as chairman and one or two nominees respectively of employers and workmen
as members. 21 The chairman must be an independent person. A quorum is also
provided for conducting the proceedings.

2. Qualifications and Experiences

Unlike the adjudicating authorities, the Act does not prescribe any qualification and/
or experience for conciliation officer or member of a board of conciliation. A report of
the study committee of the [First] National Commission on Labour, however, reveals
that one of the causes of failure of conciliation machinery is lack of proper personnel in
handling the dispute. The conciliation officer is sometimes criticized on the ground of
his being unaware about industrial life and not having received the requisite training.
It is, therefore, suggested that the Act should prescribe qualification and experience for
conciliation officer which may include proper and adequate training and knowledge of
handling labour problems.

18 Section 12(5).
19 See Government of India, Report of the National Commission on Labour, 322-23.
20 Section 4(2).
21 Section 5(2).
 Settlement of Industrial Disputes • 279

3. Filling of Vacancies
The proviso to Section 5(4) requires that where the services of the chairman or any other
member have ceased to be available, the board shall not function until the appoinbnent of
chairman or member, as the case may be, is made. Section 8 deals with the manner in which
the vacancy in the office of chairman or other members of a board will be filled.

4. Jurisdiction
Conciliation officers are appointed by the Central and state governments for industries
which fall within their respective jurisdiction.

5. Powers of Conciliation Authorities

(a) Powers of Conciliation Officer. The Act empowers conciliation officer to conciliate and
mediate between the parties. He is deemed to be a public servant within the meaning
of Section 21 of the Indian Penal Code.22 He is empowered to enforce the attendance
of any person for the purpose of examination of such person or call for and inspect the
documents which he considers (i) to be relevant to the industrial dispute or (ii) to be
necessary for the purpose of verifying the implementation of any award or carrying
out any other duty imposed on him under the Act. For this purpose, he enjoys the same
powers as are vested in the civil court under the Code of Civil Procedure, 1908.23 The
conciliation officer is also empowered for the purposes of inquiry into any existing or
apprehended industrial dispute to enter the premises occupied by any establishment
to which the dispute relates after giving reasonable notice. 24 Failure to give any such
notice does not, however, affect the legality of conciliation proceedings.25
(b) Powers of the Board of Conciliation. The board of conciliation acts in a judicial capacity
and enjoys more powers than conciliation officers. Under the Act, every board of
conciliation enjoys the same powers as are vested in a civil court under the Code of
Civil Procedure, 1908, when trying a suit. It can enforce the attendance of any person
and examine him on oath, compel the production of documents and material objects,
issue commission for examination of witnesses, make discovery and inspection, grant
adjournment and receive evidence taken on affidavit.26 Every inquiry by a board is
deemed to be judicial proceeding within the meaning of Sections 193 and 228 of the
Indian Penal Code27 and Sections 345,346 and 348 of the Code of Criminal Procedure,
1973.28 The proceedings are normally held in public but the board ma~ at any stage
direct that any witness be examined or proceedings be held in camera. 9

22 Section 11(6).
23 Section 11(4).
24 Section 22(2).
25 State ofBihar v. Kripa Shanker Jaiswal, AIR 1961 SC 304.
26 The Industrial Disputes (Central) Rules, 1957, Rule 24.
27 The former section punishes giving or fabricating false evidence; while the latter section punishes
insulting or interrupting judicial proceedings.
28 These sections deal with the court's power to punish for contempt of court.
29 The Industrial Disputes (Central) Rules, 1957, Rule 30.
280 • Industrial Relations and Labour Laws

The board is empowered, subject to the rules in this behalf, to follow such procedure
as it may think fit. 30 The rules provide for the place and time of hearing of the industrial
dispute by adjudication or arbitration authorities as the case may be,31 administration of
oath by adjudication or arbitration authorities,32 citation or description of the parties in
certain cases,33 the issuance of notices to the parties,34 the circumstances when the board
can proceed ex-parte35 and correction of clerical mistakes or errors arising from accidental
slip or omission in any award. 36 The board also has to keep certain matters confidential in
the award. 37 The board can accept, admit or call for evidence at any stage of the proceedings
before it in such manner as it thinks fit. 38 The representatives of the parties have the right
of examination, cross-examination and addressing the board when any evidence has been
called. 39 The witnesses who appear before a board are entitled for expenses in the same
way as witnesses in the civil court. 40

6. Duties of Conciliation Authorities

Duties of Conciliation Officers. The Industrial Disputes Act provides for the appoinbnent of
conciliation officer, 'charged with the duty of mediating in and promoting the settlement of
industrial disputes.'41 Where an industrial dispute exists or is apprehended, the conciliation
officer may, or where the dispute relates to a public utility service and a notice under
Section 22 has been given, he shall hold conciliation proceeding in the prescribed manner.
He may do all such things which he thinks fit for the purpose of inducing the parties to
come to a fair and amicable settlement of the disputes.'42 Further, Section 12 (2) directs the
conciliation officer to investigate 'without delay' the dispute and all matters affecting merits
and right settlement thereof. 43 If the settlement is arrived at, the conciliation officer shall
send a report together with memorandum of settlement signed by the parties to the dispute,
to the appropriate government or an officer authorized on his behalf.44 If no settlement is
arrived at, the conciliation officer is required to send a report to the appropriate government
containing (z) a full report setting forth the steps taken by him for ascertaining the facts and
circumstances of the dispute and for bringing about a settlement thereof, (iz) a full statement
of facts and circumstances leading to the dispute, and (iii) the reasons why a settlement

30 Section 11(1) of the Industrial Disputes Act 1947.

31 Rule 13 of the Industrial Disputes (Central) Rules, 1957.
32 Rule 16 of the Industrial Disputes (Central) Rules, 1957.
33 Rule 19 of the Industrial Disputes (Central) Rules, 1957.
34 Rule 20 of the Industrial Disputes (Central) Rules, 1957.
35 Rule 22 of the Industrial Disputes (Central) Rules, 1957.
36 Rule 28 of the Industrial Disputes (Central) Rules, 1957.
37 Rule 15 of the Industrial Disputes (Central) Rules, 1957.
38 Rule 21 of the Industrial Disputes Act (Central), 1957.
39 Rule 29 of the Industrial Disputes Act, (Central) Rules, 1957.
40 Rule 33 of the Industrial Disputes (Central) Rules, 1957.
41 See, Section 4(1) of the Industrial Disputes Act, 1947.
42 Madhavan Kutty v. Union of India (1982} 2 LLJ 212 (Kerala).
43 Sub-section 2 of Section 12 lays down: 'the conciliation officer shall, for the purpose of bringing
about a settlement of the dispute without delay, investigate the dispute and all matters affecting
the merits and the right settlement thereof and may do all things as he thinks fit for the purpose of
inducing the parties to come to a fair and amicable settlement of the disputes.'
44 Section 12 (3).
 Settlement of Industrial Disputes • 281

could not be arrived at. 45 It is a mandatory duty on the part of the conciliation officer to
submit the failure report. His omission to do so is culpable, if not motivated. 46 Be that as
it may, it is for the appropriate government to consider whether on the basis of the failure
report and other relevant materials, it should refer the dispute for adjudication or not. If
on a consideration of the report, the appropriate government is satisfied that there is a case
for reference to board or adjudicating authority, it may make a reference. Where it does
not make a reference, it shall record and communicate to the parties concerned its reasons
therefor. 47 Sub-section 6 of Section 12 provides that the report 'shall be submitted' either
within 14 days of the commencement of the conciliation proceedings or earlier if required
by the appropriate government, or later if all the parties to the dispute agree in writing.
The Industrial Disputes Act 1947, draws a distinction between public utility services
and non-public utility services. Thus, while in a public utility service, the conciliation officer
is bound to hold conciliation, he is not bound to do so in a non-public utility service.48
The powers of the conciliation officer are not adjudicatory but are intended to promote
a settlement of dispute. However, a special responsibility has been vested in conciliation
officer to see that the settlement arrived at is fair and reasonable and he should then give
his concurrence. This is so because the settlement arrived at in the course of conciliation
proceedings is binding not only on all parties to the industrial dispute but all other parties
summoned to appear in the proceedings and where a party is an employer, his heirs,
successors or assignees in respect of the establishment to which the dispute relates; and where
a party is composed of workmen, all persons who were employed in the establishment or
part of the establishment, as the case may be to which the dispute relates on the date of the
dispute and all persons who subsequently become employed in that establishment or part.
Section 12, however, raises several important issues:
(i) What will be the effect of the failure of a conciliation officer to submit the report
within 14 days of the commencement of the conciliation proceedings? Two views
are discernible. One view is that the conciliation officer becomes functus officio on the
expiry of 14 days from the commencement of conciliation proceedings and thereby
invalidates the conciliation proceedings. The other view is that failure to submit the
report within 14 days of the commencement of the conciliation proceedings does
not affect the legality of the proceedings. The latter view found the approval of the
Supreme Court in the State of Bihar v. Kripa Shankar Jaiswal. 49 In this case, the conciliation
officer had not sent his report to the appropriate government within 14 days of the
commencement of the conciliation proceedings. A question arose whether failure to
submit the report by the conciliation officer within the prescribed period will affect
the legality of the conciliation proceedings. The Supreme Court answered the question
in negative. The Court observed that the failure of the conciliation officer to submit
his report after the prescribed period does not affect the legality of the proceedings.
However, contravention of Section 12 (6) may amount to a breach of duty on the part
of the conciliation officer. This decision is, however open to several objections. First,
protracted conciliation proceedings tend to be fruitless. Second, since under Section 22 of

45 Section 12 (4).
46 All India Bombay Tyres International Employees' Federation v. CB Dinagre (1993} Lab. IC 817.
47 Section 12 (5).
48 Britannia Biscuit Co. Ltd Employees' Union v. Assistant Commissioner of Labour, (1983} 1 LLJ 181.
49 State ofBihar v. Kripa Shankar Jaiswal, AIR 1961 SC 340.
282 • Industrial Relations and Labour Laws

the Industrial Disputes Act a strike or lockout cannot be declared during the pendency
of any conciliation proceedings... and 7 days after (its) conclusion and, on the other
hand in order to make the strike or lockout legal it must take place within 6 weeks of
the date of notice, the time limit must be certain. Third, management too is debarred by
Section 33 from exercising certain of its prerogatives during conciliation proceedings
and since this means deprivation of a right, the canons of statutory interpretation
suggest that the period of deprivation should be definite and tailored to meet the
needs of the situation. Fourth, for industrial peace and harmony, it is essential that
the dispute must be settled at an early date. Under the circumstances, it is suggested
that the Supreme Court may reconsider its view in the light of the aforesaid reasoning.
(iz) Whether a conciliation officer has jurisdiction to initiate conciliation proceedings
at a place where the management's establishment is not situated? This issue was
raised in M/s. Juggat Pharma (P) Ltd v. Deputy Commissioner of Labour, Madras. 50 In
this case, the management's establishment was situated at Bangalore. The company
employed certain workmen therein as sales representatives at Madras to look after its
business. The management later terminated their services. On these facts, a question
arose whether the conciliation officer at Madras had jurisdiction under Section 12
over the management whose establishment was situated at Bangalore and the sales
representatives appointed by them were looking after their work at Madras. The
answer to the question depends upon whether a dispute existed or was apprehended
between the management and the workmen in Madras. The Court observed that
Section 2 (k), which defines an industrial dispute, is not controlled by the location of
the management's establishment in Bangalore or the absence of such establishment in
Madras. The fact that the management had no establishment or branch office in Madras
did not alter the fact that termination of the workmen's service was in connection
with their employment in Madras. The Court accordingly held that it was open to the
conciliation officer to initiate conciliation proceedings under Section 12(1).
(iii) Is a notice necessary for a settlement to be in the course of conciliation proceedings?
This question was raised in Delhi Cloth & General Mills Co. Ltd v. Union of India. 51 In
this case, the conciliation officer neither initiated any proceeding for conciliation nor
issued any notice for holding the conciliation proceedings. He also made no attempt to
induce the parties for reaching a settlement de hors conciliation proceedings. The Delhi
High Court held that there was no settlement in the course of conciliation proceedings.
(iv) Whether a conciliation officer could go into the merit of the dispute and decide various
points in issue one way or the other? The Kerala High Court52 answered the question
in the negative and observed that a conciliation officer was not competent to decide
the various points at issue between the opposing parties. All that he could do was to
persuade the parties to come to a fair and amicable settlement. Although wide powers
are conferred upon a conciliation officer to use his resourcefulness to persuade the
parties but he has no power to decide anything at all. After having commenced the
conciliation proceedings under Section 12, the conciliation officer exceeded his power
and acted beyond his jurisdiction by passing the order. The Court highlighted the
duties of a conciliation officer:

50 (1982) 2 LLJ 71.

51 (1984) 1 LLJ 174.
52 Madhavan Kutty v. Union of India, (1982) 2 LLJ 212.
 Settlement of Industrial Disputes • 283

The provision in sub-section (4) of Section 12 of the Act relating to the sending
to the government a full report as contemplated thereunder is mandatory in
nature. Having failed to bring about or arrive at a settlement of the dispute, it
was the bounden duty of the conciliation officer .... to send to the appropriate
government a full report as mandatorily enjoined under Section 12(4) of the Act
setting forth the steps taken by him for ascertaining the facts and circumstances
relating to the dispute and for bringing about a settlement thereof together with
a full statement of such facts and circumstances and the reasons on account
of which, in his opinion, a settlement could not be arrived at. Thereafter, by
virtue of the provisions in Section 12(5), it is for the appropriate government
to consider whether it should make a reference or refuse to make a reference.
The Court accordingly held that by disposing of the conciliation proceedings on the
close of the investigation, the conciliation officer not only failed to perform the statutory
function vested in him under Section 12 (4) but also exceeded his power under Section 12 (1).
(v) Whether a writ of mandamus can be issued to the conciliation officer, on whose
intervention a settlement was arrived at between the management and workmen, directing
him to take all measures to see that settlements are implemented or to prohibit the
management from laying-off the staff? The Court53 answered the question in the negative
and observed that the labour commissioner, while acting under Section 12 as conciliation
officer, was not empowered to adjudicate an industrial dispute. All that he could do was
to try to persuade the parties to come to a fair and amicable settlement. In other words,
his duties were only administrative and incidental to industrial adjudication. There was
nothing either in the Act or in the rules empowering the labour commissioner to implement
the settlement arrived at between the parties under Section 12 (3). If any of the parties to
the settlement were aggrieved by the non-implementation of the terms of settlement by the
other party, then the remedy would be to move the government for sanction to prosecute
the party in breach of settlement under Section 29.
The scope of Section 12 was raised in Manoharan Nair v. State of Kerala 54 where the
Central Government rejected the demand of the trade unions regarding minimum wages and
dearness allowance. Consequently, the workmen went on strike but later it was called off.
The negotiations commenced on the Central Government's counter-proposal but the trade
unions rejected the proposal. The regional joint labour commissioner's efforts to convene
another conference also failed. The additional labour commissioner, however, succeeded
in persuading three of these unions to accept the Central Government's proposal and a
settlement was arrived at to this effect, which was countersigned by the additional labour
commissioner. The validity of this settlement was challenged on two main grounds:
The conciliation officer erred in holding that the trade unions, who were parties to
the settlement, represented the majority of the workmen in the establishment and (ii) the
jurisdiction of the conciliation officer to resolve that dispute, which related to the matters
mentioned in clause 6 did not bind the workmen in other matters. As to the first contention,
the Kerala High Court, following the Supreme Court decision in Ramnagar Cane & Sugar Co. v.
Jatin Chakravarthy,55 negatived it by holding that a settlement made with the minority would

53 Workmen of Buckingham & Carnatic Mills v. State of Tamil Nadu, (1982) 2 LLJ 90.
54 (1983) 1 LLJ 13.
55 AIR 1960 SC 1012.
284 • Industrial Relations and Labour Laws

bind all the workmen of the establishment when it was countersigned by the conciliation
officer unless, a collusive settlement, designed to defeat certain kinds of claims, is arrived
at with those who could not speak for even a small section of the interested workmen.
As to the second contention, the Court held that no manner was prescribed for raising
an industrial dispute (whether existing at the commencement or cropping up during the
pendency of proceedings). It accordingly, rejected the contention that the conciliation officer
was incompetent to countersign the final settlement.
If the conciliation officer fails to effect a settlement, the appropriate government
may, after considering the report of the conciliation officer, refer the dispute to a board
or adjudicating authorities and, in particular, not to a court of inquiry. The power is
discretionary. But, if the appropriate government decides not to refer the matter, it must
record the reasons there of, and communicate the same to the parties concerned. It follows
that conciliation officer's report is considered by the appropriate government. But unlike the
board of conciliation, the conciliation officer is not required to make recommendation for the
determination of dispute under the Act. It is suggested that the conciliation will prove to be
more effective if the conciliation officer is also be required to make a recommendation to the
appropriate government whether or notthe matter is fit for adjudication. It is also suggested
that the recommendation of a conciliation officer should be given due consideration by the
appropriate government.
(vi) Can conciliation proceedings pertaining to industrial disputes be initiated and
continued by legal heirs even after death of the workman? This question was answered
in the affirmative by the division bench of the Karnataka High Court in Dhanalakshmi v.
Reserve Bank of India, Bombay.56 The Court held that despite the death of the workman, the
point sought to be settled by legal heirs remains an 'industrial dispute' for the purpose of
adjudication under the Industrial Dispute Act, 1947.
(vii) Can the registrar of a cooperative society nullify a settlement pertaining to wages
made before the conciliation officer between cooperative societies and their employees?
This question was answered in the negative by the Madras High Court in S Jina Chandran
v Registrar of Cooperative Societies, Madras. 57

7. Duties of Board of Conciliation

A board to which a dispute is referred must investigate the dispute and all matters affecting
the merits and the right settlement thereof and do all things for the purpose of inducing the
parties to come to a fair and amicable settlement of the dispute without delay. 58
If a settlement is arrived at, the board should send a report to the appropriate
government together with a memorandum of the settlement signed by the parties to the
dispute. 59 If no settlement is reached, the board must send a full report together with its
recommendation for the determination of the dispute. 60
In case of failure of settlement by a board, the 'appropriate government' may refer
the dispute to a labour court, tribunal or national tribunal. The government is, however,

56 (1999) LLR 278.

57 (1999) LLR 230.
58 Section 12 (1).
59 Section 13 (1).
60 Section 13 (3).
 Settlement of Industrial Disputes • 285

not bound to make a reference. But where the government does not make a reference in a
public utility service after receiving a report from a board, it must record and communicate
to the parties concerned its reasons for not doing so. 61
A board is required to submit its report within two months of the date on which the
dispute was referred to it or within such shorter period as may be fixed by the appropriate
government. The time limit for the submission of a report can be extended by the appropriate
government or by agreement in writing by all the parties to the dispute. 62

8. Conciliation Proceedings
The study of conciliation proceedings requires examination of: (i) when and how conciliation
machinery is set in motion? and (iz) what is the duration of conciliation proceedings? These
questions are of great practical significance. It is important because the management is
prohibited from exercising its prerogative during the pendency of conciliation proceedings
before a conciliation officer and board of conciliation in respect of an industrial dispute.
Further, workmen and employers in public utility services are prohibited from declaring
strike or lockout as the case may be during the pendency of any conciliation proceedings
before a conciliation officer. In non-public utility services, management and workmen are
prohibited to declare lockout or strike during the pendency of conciliation proceeding before
a board of conciliation and 7 days thereafter.
Let us now turn to examine when a conciliation machinery is set in motion and what
is the duration of conciliation proceedings before the conciliation officer and board of
conciliation.
(i) Cognizance
(a) By Conciliation Officer. In case of public utility services, where a notice of strike
or lockout has been given under Section 22, it is mandatory for the conciliation
officer to intervene under the Act. 63 But in non-public utility services, where an
industrial dispute exists or is apprehended, conciliation officer my exercise his
discretion to conciliate or not. 64 In practice, it has been found that the optional
provision is acquiring compulsory status in non-public utility services also. 65 The
conciliation officer may take note of an existing or apprehended dispute either
suo motu or when approached by either of the parties. His power under the Act is
essentially confined to investigation and mediation of industrial dispute.
(b) By Board of Conciliation. The board assumes jurisdiction over the existing or
apprehended dispute when it is referred to it by the appropriate government.
(ii) Pendency of conciliation proceeding before a conciliation officer
The opening clause of Sections 22 (1) (d), 22 (2) (d) and 33, namely,'during the pendency
of any conciliation proceeding before a conciliation officer' prescribes the period of
prohibition of strikes and lockouts in public utility services as well as on the exercise

61 Section 13 (4).
62 Section 13 (5).
63 Section 12 (1). See also Rule 9 of the rules framed thereunder.
64 See Rule 10 of the Industrial Dispute (Central) Rule, 1957. See also East Asiatic Allied Companies v.
Shelka, (1961} 1 LLJ 162 (Bombay).
65 See Government oflndia, Report of [First] National Commission on Labour, (1969} 322.
286 • Industrial Relations and Labour Laws

of management's prerogative. These critical words, however, have to be read with

other provisions of the Act and the rules framed thereunder.
(a) The commencement of proceedings. Sub-section (1) of Section 20 provides that in
public utility services, the starting point of the prohibition is the date on which
the conciliation officer receives a notice of strike or lockout under Section 22.
(b) The termination of proceedings. Sub-section (2) of Section 20 provides the other
terminus of the period of prohibition:
A conciliation proceeding shall be deemed to have concluded-
(a) where a settlement is arrived at, when a memorandum of the settlement is signed
by the parties to the disputes;
(b) where no settlement is arrived at, when the report of the conciliation officer
is received by the appropriate government or when the report of the board is
published under Section 17, as the case may be; or
(c) where reference is made to a court, labour court, tribunal or national tribunal under
Section 10 during the pendency of conciliation proceedings.
Of these, clause (b) alone which has given some ground for anxiety, need detain us.
The Supreme Court, however, in Industry Colliery 66 while construing the word
'received' in Section 20(2) (b) interpreted it to mean 'when the report is actually received
by the appropriate government' and imposes criminal liability where the employer or the
workmen could not possibly know that he was doing an illegal act by declaring a strike
or lockout illegal and put prohibition on the use of instruments of economic coercion by
the parties which can hardly be justified on the ground of maintaining harmonious labour
management relations to facilitate settlement of disputes.
The facts are as follows: On 13 October 1949, the workmen gave a notice to the
management under Section 22(1) of a one day strike to take place on 6 November 1949. The
regional labour commissioner (central) held conciliation proceedings on 22 October 1949.
The workmen declined to participate in the conciliation proceedings. On the same day,
the regional labour commissioner sent the failure report to the chief labour commissioner
stating that no settlement was arrived at in the conciliation proceedings and that he 'was
not in favour of recommending a reference of the dispute to the industrial tribunal' for
adjudication. The failure report of the chief labour commissioner, Delhi was, however,
received by the Ministry of Labour only on 19 November 1949. In the meanwhile, the
workmen went on a one day strike as per their notice on 7 November 1949. The question
arose whether the strike was illegal. This question depended on whether the strike occurred
'during the conclusion of such proceedings'. The Supreme Court pointed out that under
Section 24 (1), a strike was illegal if it commenced or was declared during pendency of a
conciliation proceedings .... and 7 days after the conclusion of such proceedings' which is
prohibited under clause (1) of Section 22 (1) and the proceeding is deemed to have concluded'
where no settlement is arrived at, when the report of the conciliation officer is received by
the appropriate government.' The Court dealt with the word 'received' occurring under
Section 20(2) (b) as follows:

' ... while the word 'send' is used in Section 12 (4) and the word 'submitted'
in Section 12 (6), the word used in Section 20 (2) (b) is 'received'. That word

66 Workmen of Industry Colliery v. Industry Colliery, (1953) 1 LLJ 190 (SC).

 Settlement of Industrial Disputes • 287

obviously implies the actual receipt of the report. To say that the conciliation
proceedings shall be deemed to have concluded when the report should, in the
ordinary course of business, have been received by the appropriate government
would introduce an element of uncertainty, for the provisions of Section 22 (1)
(d) clearly contemplate that the appropriate government should have a clear
7 days' time after the conclusion of the conciliation proceedings to make up
its mind as to the further steps it should take. It is, therefore, necessary that
the beginning of the seven days' time should be fixed so that there would be
certainty as to when the seven days' time would expire. It is, therefore, provided
in Section 20 (2) (b) that the proceedings shall be deemed to have concluded,
where no settlement is arrived at, when the report is actually received by the
appropriate governments.'
(iii) Pendency of proceedings before a board of conciliation
(a) The commencement of proceedings. The proceeding is deemed to have commenced
on the date of the order referring the dispute to the board. 67 The effect of this
provision can be interpreted only with reference to the provisions of Section 5
and Rule 6 of the Industrial Disputes (Central) Rules, 1957. These provisions do
not provide sufficient safeguards to the workmen or the employer. What if the
employer declares a lockout or the workmen declare a strike between the date
of notice under Rule 6 and the date of order referring the dispute to the board of
conciliation?
(b) The termination of proceedings. Under sub-section (2) of Section 20, conciliation
proceedings shall be deemed to have concluded-
(i) where a settlement is arrived at, when a memorandum of the settlement is
signed by the parties to the dispute
(iz) where no settlement is arrived at, .... when the report of the board is published
under Section 17
(iii) when a reference is made to a labour court, tribunal or national tribunal under
Section 10

9. Settlement in Conciliation
After having discussed the proceedings in conciliation, it is necessary to examine the
settlement in conciliation. The settlement in conciliation requires consideration of several
aspects such as concept and nature of settlement, form of settlement, publication of
settlement, period of operation of settlement, persons on whom settlement is binding and
enforceability of settlement.
(a) Concept of settlement. Section 2 (p) defines 'settlement' to mean: a settlement arrived
at in the course of conciliation proceeding and includes a written agreement between
the employer and the workmen arrived at otherwise than in the course of conciliation
proceeding, where such agreement has been signed by the parties thereto in such
manner as may be prescribed and a copy thereof has been sent to an officer authorized
in this behalf by the appropriate government and the conciliation officer.

67 Sub-section 1 of Section 20 of the Industrial Disputes Act, 1947, provides that conciliation proceedings
shall be deemed to have commenced... on the date of the order referring the dispute to a board.
288 • Industrial Relations and Labour Laws

An analysis of the aforesaid definition reveals that there are two modes of settlement
of industrial disputes: (i) settlement arrived at in the course of conciliation proceedings,
i.e., one which is arrived at with the assistance and concurrence of the conciliation officer,
who is duty-bound to promote a settlement and to do everything to induce the parties to
come to a fair and amicable settlement of the dispute,68 and (iz) a written agreement between
employer and workmen arrived at otherwise than in the course of conciliation proceedings. 69
It also appears from the above definition that 'unless an agreement arrived at between
the parties is a settlement in its grammatical or ordinary signification, such an arrangement
although arrived at in a conciliation proceedings70 will not be a settlement within the meaning
of Section 2 (p).' Further, the expression 'in the course of conciliation proceedings' refers to
the duration when the conciliation proceedings are pending. 71 Moreover, for the validity
of this kind of settlement 'it is essential that the parties thereto should have subscribed to it
in the prescribed manner and a copy thereof should have been sent to an officer authorized
in this behalf by the appropriate government and the conciliation officer .172
(b) Nature of settlement. The nature of proceedings before the conciliation officer is not
judicial or quasi-judicial but administrative.73 Let us examine the requirements therefor.
(i) Settlement must be 'in writing'. The Industrial Disputes Act, 1947, requires the
settlement arrived at in the course of conciliation proceedings by the conciliation
officer and board of conciliation74 to be 'in writing'. The purpose is to minimize
area of disputes over the contents thereof and to have permanent record in matters
affecting labour management relations.
(ii) Settlement must be signed by the parties. The Industrial Disputes Act 1947, requires the
'settlement arrived at in the course of conciliation proceedings by the conciliation
officer75 or by the board 76 to be signed by the parties to the dispute. Thus, clause
(2) of Rule 58 of the Industrial Disputes (Central) Rules provides:

The settlement shall be signed by (a) in the case of employer, by the employer
himself, or by his authorized agent, or when the employer is an incorporated
company or other body corporate, by the agent, manager or other principal
officer of the corporation; (b) in case of workmen, by an officer of a trade union
of the workmen or by five representatives of the workmen duly authorized in
this behalf at a meeting of the workmen held for the purpose.
The aforesaid provision raises several problems. First, what if the parties do not sign
it? Second, what is the position of an individual workman who is not a member of any union
whatsoever and his erstwhile co-workers are not prepared to help him? Third, what is the
position of an individual workman who is made a scapegoat by his own union?

68 See Bata Shoe Co. (P) Ltd v. Ganguli (D N), AIR 1961 SC 1158.
69 See Tata Chemical Ltd v. Workmen, (1978) 2 LLJ 22 (SC}.
70 See Indian Tobacco Company Ltd v. Government of West Bengal, (1971} 1 LLJ 89 at 94 (Calcutta).
71 Bata Shoe Co. Ltd v. Ganguli, AIR 1961 SC 1158 at 1161.
72 See Tata Chemicals Ltd v. Its workmen, (1978) 2 LLJ 22 at 26.
73 See Royal Calcutta Gold Club Mazdoor Union v. State of West Bengal, AIR 1956 Calcutta 550 and Caltex
(India) Ltd v. The Commissioner of Labour and Conciliation Officer, AIR 1956 Madras 441.
74 Section 16 (1) of the Industrial Disputes Act, 1947.
75 Section 12(3) of the Industrial Disputes Act, 1947.
76 Section 13 (2) of the Industrial Disputes Act, 1947.
 Settlement of Industrial Disputes • 289

As to the first, it is significant to note that Sections 12 (3) and 13 (3) make it obligatory
upon the conciliation officer and the board of conciliation to submit the report with a
'memorandum of the settlement signed by the parties to the dispute'.
The second and third problems are not easy to answer. It would be observed that Rule
59(2) (b) does not at all recognize an individual workman. This is all the more so in view of
the fact that his erstwhile co-workers are not prepared to help him. Under the circumstances,
he will be helpless, and will be bound by the settlement arrived at by the union. This view
is fortified by the provisions of Section 18.
(c) Settlement must be in the prescribed form. Should the settlement be one document
signed by both the parties, or can it be gathered from documents which have been
separately signed by the parties, e.g., correspondence? Clause (i) of Rule 58 which
provides that 'a settlement arrived at in the course of conciliation proceedings or
otherwise, shall be in form 4' suggests that the written agreement must be embodied
in one document.
(d) Publication of the settlement by board of conciliation. Section 17 (1) which deals with the
publication of award by the appropriate government, provides:

Every report of a board ... together with any minute of dissent recorded
therewith .... shall, within a period of thirty days from the date of its receipt by
the appropriate government, be published in such manner as the appropriate
government thinks fit.
The aforesaid provision raises several issues: the key question is whether the aforesaid
provision is mandatory or directory? Second, what will be the effect of withholding the
publication of the report? Third, whether the publication of the report after the expiry of
statutory period of 30 days will make the settlement invalid or unenforceable? Fourth,
whether the report will be taken to have been published on the date of the government's
notification or the date on which such notification appeared in the gazette?
(e) Settlement must be fair, just and bonafide. The apex Court in KC P Ltd. v. The Presiding
Officer,77 held that a court or tribunal must satisfy itself that a settlement was not ex
facie unfair, unjust or malafide.
(f) Period ofoperation ofsettlement. (z) Commencement. Sub-section (1) of Section 19 provides:
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 settlement is signed by the parties to the dispute.
Thus, the settlement shall come into operation on the date agreed upon by the parties
or, if none, the date on which the memorandum of settlement is signed by them.
(ii) Termination. Sub-section (2) of Section 19 provides for other terminus of the
settlement.
Such settlement shall be binding for such period as is agreed upon by the
parties, and if no such period is agreed upon, for a period of six months from
the date on which the memorandum of settlement is signed by the parties to
the dispute, and shall continue to be binding on the parties after the expiry of

77 (1997) 1 LLJ 308 : AIR 1997 SC 2334.

29 o • Industrial Relations and Labour Laws

the period aforesaid, until the expiry of two months from the date on which
a notice in writing of an intention to terminate the settlement is given by one
of the parties to the other party or parties to the settlement.
The object of the provision under sub-sections 1 and 2 of Section 19 is to ensure that
once a settlement is arrived at, there prevails peace, accord and cordiality between the
parties during the period agreed upon and if the settlement does not require to be altered
for some reason or the other, the same climate prevails by extension of the settlement by
operation of law. Section 19 is not dead and freezing (in) all manner ... There is an option
given to either party to terminate the settlement by a written intimation after the expiry
of two months from the date of such notice. This is in accord with the policy of settlement
of industrial disputes which is the principal object underlying the provisions of the Act. 78
Section 19 (2) has given rise to a controversy whether a settlement made for a specified
period expires by efflux of the said period. Answering the question, the Supreme Court in
Shukla Manseta Industries Pvt. Ltd v. The Workmen 79 observed:

To avoid uncertainty and speculation, Section 19 prescribes a terminus ad quo

and a terminus ad quern. If in a settlement there is no time limit agreed upon
between the parties, the period of operation is a space of six months from
the date of signing the settlement and will also last until the expiry of two
months from the date of receipt of the notice of termination of settlement. If
the period is fixed, it commences from the date as specified in the settlement
and will theoretically end as agreed upon but shall continue to operate under
the law until the expiry of the requisite period of two months by a clear
written notice. 80
Jaypore Sugar Company Ltd v. Their Employees 81 decided the other issue, namely, when
a settlement would terminate if no period was agreed upon? Here, settlement was reached
between the management and workers in the course of conciliation proceedings. It stated
that the workers' union gave an undertaking that there 'shall be no strike till the end of
the next crushing season.' No period was, however, agreed upon for such settlement and
no notice was given to terminate such settlement. The labour appellate tribunal observed:

Under Section 19 (2) of the Industrial Disputes Act, this will be binding for a
period of six months and also shall continue to be binding for a further period
of two months after notice to terminate it. In this case, we find that no such
notice to terminate this settlement was given by either party and the settlement
is still in force. 82
The Supreme Court in South Indian Bank Ltd v. Chako 83 held that binding 'nature of
award' and 'operation of award' are two different expressions.

78 India Construction Corporation Limited, (1953) LIC 568 (Calcutta).

79 Shukla Manseta Industries Pvt. Ltd v. The Workmen, (1977) 2 LLJ 339 (SC}.
80 Id. at 342.
81 Jaypore Sugar Company Ltd v. Their Employees, (1955) 2 LLJ 444 (LAT).
82 Jaypore Sugar Company Ltd v. Their Employees, op. cit., 446.
83 South Indian Bank Ltd v. Chako, (1964) 1 LLJ 19 (SC}.
 Settlement of Industrial Disputes • 291

The notice under Section 19 (2) must be given by a party representing the majority of
persons bound by the settlement.84 Further, such a notice can be inferred from correspondence
between the parties.
In Cochin State Power Light Corporation Ltd v. Its Workmen 85, the employer and the
employees arrived at a settlement on 25 November 1954, which was to remain in force upto
30 September 1959. The employer contended that the settlement was never terminated by
notice in writing, so it continued to be in force when the reference was made. Hence, the
tribunal had no jurisdiction to adjudicate the dispute. The workmen had presented a charter
of demands on 14 October 1959 in which there was a reference to the settlement and it was
stated therein that the union had on 18 October 1959 resolved to terminate the existing
settlement. It was contended that this did not put an end to the settlement as required by
Section 19 (2) of the Act because there was no reference to the termination of settlement by
the charter. While rejecting the contention, Justice Wanchoo observed:

There is, however, no form prescribed for terminating settlement under Section
19 (2) of the Act and all that has to be seen is whether the provisions of Section 19
(2) are complied with in substance and a notice is given as required thereunder. 86
The Court rejected the employer's contention and held that as there was a reference
under the charter of demands to a resolution in which specific statement that the settlement
was being terminated thereby was made, it was sufficient notice as required under Section
19 (2) of the Act.
The above view was approved by the Supreme Court in Indian Link Chain Manufacturers
Ltd v. Their Workmen. 87 But at the same time, the Court warned:

It is true that though a written notice can be spelled out of the correspondence,
there must be some certainty regarding the date or which such a written notice
can be construed to have been given because a settlement notwithstanding
such notice continues to be in force for a period of two months from that date. 88
The lacuna in the law on this point is that unlike the provisions for termination of
operation of award under Section 19 (3), the Act does not expressly provide for termination
of the operation of a settlement. It is, therefore, suggested that the Parliament should make
an express provision in the Act for the termination of operation of settlement.
In Management ofKarnataka State Road Transport Corporation v. KSRTC Staffand Workers
Federation 89, a settlement was arrived at between the Karnataka State Road Transport
Corporation (KSRTC) and union federation of KSRTC emerging as sole bargaining agent
on 28 July 1988. The payroll check-off facility was made available to the union as per the
settlement. The settlement was to last till recognition of federation or until both parties
terminate it by mutual consent. On 10 May 1993, a memorandum of understanding
was reached subject to the approval of board of directors and state government. On

84 The Indian Link Chain Manufactures Ltd v. Their Workmen, (1972} Lab. IC 200.
85 Cochin State Power Light Corporation Ltd v. Its Workmen, (1964) 2 LLI 100 (SC}.
86 Ibid. at 101.
87 The Indian Link Chain Manufactures Ltd v. Their Workmen, op. cit., 200 and 206.
88 Ibid.
89 JT 1999 (1) SC 554: 1999 LLR 390 (SC}; (1999} 1 LLJ 489 (SC}.
2 9 2 • Industrial Relations and Labour Laws

21 September 1999, the Karnataka State Road Transport Corporation by notification withdrew
the responsibility of collection of donation or monthly subscription called payroll check-off
facility. On these facts, a question arose whether (z) there was sufficient notice and (ii) the
settlement was legally terminated. The Supreme Court answered the question in the negative
and held that the government orders and consequential notification withdrawing payroll
check-off facility was illegal and ultra-vires of Section 19 (1) of the ID Act. The agreement of
1988 continued to be binding on parties and KSRTC could not act unilaterally.
(g) Persons on whom settlement is binding. The Industrial Disputes Act, 1947 draws a
distinction between a settlement arrived at by agreement between the parties and
settlement arrived at in the course of conciliation proceedings. Whereas the first
category of settlement 'shall be binding only on the parties to the agreement' 90, the
second one is binding not only on 'all parties to the industrial dispute' but also on:
(a) all other parties summoned to appear in the proceedings as parties to the dispute
unless the board, arbitrator, labour court, tribunal or national tribunal as the case
may be, records the opinion that they were so summoned without proper clause;
(b) where a party referred to in clause (a) or clause (b) is an employer, his heirs,
successors or assignees in respect of the establishment to which the dispute relates;
(c) where a party referred to in clause (a) or clause (b) is composed of workmen, all
persons who were employed in the establishment or part of the establishment, as
the case may be, to which the dispute relates on the date of the dispute and all
persons who subsequently become employed in that establishment or part. 91
It is evident from above that the settlement arrived at in the course of conciliation
proceedings shall be binding on all categories of persons mentioned above. In extending
the operation of such a settlement beyond the parties thereto, Section 18 (3) of the Industrial
Disputes Act makes a departure from the ordinary law of contract which leads towards
collective bargaining. 92 The object of this section is to promote industrial peace and harmony
between the parties. It is with this object that wide coverage has been given to Section 18 (3)
and this can possibly be done when settlement would bind all the parties.
In Virudhachalam P v. Mgmt of Lotus Mills 93, the Supreme Court ruled that once a
written settlement is arrived at during the conciliation proceedings, such settlement under
Section 12 (3) has a binding effect not only on the signatories to the settlement but also on
all parties to the industrial dispute which would cover the entire body of workmen, not
only existing workmen but also future workmen. Such a settlement has the same legal
effect as an award of labour court, tribunal or national tribunal or an arbitration award.
They all stand on par. It is easy to visualize that settlement contemplated by Section 12(3)
necessarily means a written settlement which would be based on a written agreement where
signatories to such settlement sign the agreement. Therefore, settlement under Section 12(3)
during conciliation proceedings and all other settlements contemplated by Section 2(p)
outside conciliation proceedings must be based on written agreements. Written agreements
would become settlements contemplated by Section 2(p) read with Section 12(3) of the Act
when arrived at during conciliation proceedings or even outside conciliation proceedings.
Thus, written agreements would become settlements after relevant procedural provisions

90 Section 18 (1) of the Industrial Disputes Act, 1947.

91 Section 18 (3) of the Industrial Disputes Act, 1947.
92 See Jharkhand Collieries v. Central Government Industrial Tribunal, (1975) Lab. IC 137, 139 (SC).
93 (1998) 1 LLJ 389 (SC): AIR 1998 SC 554.
 Settlement of Industrial Disputes • 2 9 3

for arriving at such settlements are followed. Thus, all settlements necessarily are based on
written agreements between the parties.
The scope of Section 18 (3) (d) has been the subject-matter of judicial interpretation in
a series of cases decided by the high courts and the Supreme Court. The debatable issue has
been whether settlement with one or more concerned union in a conciliation proceeding
would bind all other workmen of unions of establishment who were not made parties to the
settlement. This issue was raised in Ramnagar Cane and Sugar Co. Ltd v. Jatin Chakravarty. 94
In this case, Ramnagar Cane and Sugar Co. Ltd, a public utility concern, carried on the
business of manufacturing sugar. The management employed 545 permanent and 703
seasonal workers (excluding casual labourers). Majority of these workmen belonged to
the Ramnagar Cane Sugar Co. Employees' Union (hereinafter referred to as the workers'
union). On 9 December 1953, the workers' union submitted a charter of demands to the
management. On 20 January 1954, a similar charter of demands was also submitted by the
employees' union to the management. On the same day, the workers' union gave a strike
notice to the management. On 1 February 1954, the conciliation officer started conciliation
proceedings which were attended by the employees' union and the management. Workers'
union, apparently did not attend the meeting even though a notice was served upon the
said union. On 2 February 1954, the management suggested to the conciliation officer to
discuss the disputed matter with the representatives of two unions separately. The workers'
union objected to this suggestion and informed the conciliation officer that it assumed that
the conciliation has failed. Consequently, on 2 February 1954, the conciliation officer sent
his report about the failure of conciliation with workers' union. On 25 February 1954, the
management and employees' union, arrived at a settlement, which was recorded in a form of
memorandum of settlement signed by them. Meanwhile on 13 February 1954, the workers'
union went on strike which was alleged to be in contravention of the provisions of the
Industrial Disputes Act. Accordingly, the members of the workers' union were prosecuted.
Here, we are concerned with a limited issue, namely, whether workers belonging to the
worker's union were bound by the settlement arrived at between the workers-members of
employees' union and the management. Answering the question in the affirmative, Justice
Gajendragadkar observed:

In order to bind the workmen it is not necessary to show that the said workmen
belong to the union which was a party to the dispute before conciliator ..... [Thus]
if a conciliation proceeding is pending between one union and the employer and
itrelates to matters concerning all the employees of the employer, the pendency
of the said conciliation proceeding would be a bar against all the employees
of the employer employed in a public utility service to go on a strike during
the pendency of the proceeding under Section 22 (1) (d).In our opinion, this
construction would be consistent with the specific provisions as to the effect
of conciliation settlements prescribed by Section 18 (3) (d) and is harmonious
with the general policy of the Act; otherwise, it would unnecessarily disturb
industrial peace, if one union employed in a public utility service is allowed
to go on strike even though demands common to the members of the said
union as well as the rest of the workmen are being considered in conciliation
proceedings between the said employer and his other employees represented
by another union.

94 Ramnagar Cane and Sugar Co. Ltd v. Jatin Chakravarty, AIR 1960 SC 1012 at 1015.
294 • Industrial Relations and Labour Laws

The Court accordingly held that the settlement arrived at between the management
and the employees' union in the course of conciliation proceedings on 25 February 1954
was binding not only upon the members of the said employees' union but on all the four
categories of persons bound by such settlement as are specified in sub-section (3) of Section
18 including workmen employed by the management at that time.
The aforesaid view was reiterated in Tata Chemical Ltd v. Workmen. 95
In G M Security Paper Mills v. R S Sharma%, the Supreme Court once again laid down
the scope and objective of Section 18 (3) of the Act in the following words:

Even though a conciliation officer is not competent to adjudicate upon the

dispute between the management and its workmen, he is expected to assist
them to arrive at a fair and just settlement. He has to play the role of an advisor
and friend of both the parties and should see that neither party takes undue
advantage of the situation. Any settlement arrived at should be a just and fair
one. It is on account of this special feature of the settlement, sub-section (3)
of Section 18 of the Industrial Disputes Act, 1947 provides that a settlement
arrived at in the course of conciliation proceeding under that Act shall be
binding on (i) all parties to the industrial dispute (ii) where a party referred
to in clause (i) is an employer, his heirs, successors or assignees in respect of
the establishment to which the dispute relates and (iii) where a party referred
to in clause (i) is comprised of workmen, all persons who were employed in
the establishment or part of the establishment as the case may be to which the
dispute relates on the date of the dispute and all persons who subsequently
become employed in that establishment or part. Law thus attaches importance
and sanctity to a settlement arrived at in the course of a conciliation proceeding
since it carries a presumption that it is just and fair and makes it binding on all
the parties as well as the other workmen in the establishment or the part of it
to which it relates as stated above. But in the case of a settlement not arrived at
in the course of the conciliation proceeding, it has to be in writing and signed
by the parties in the prescribed manner and a copy thereof should be sent to
the officer authorized by the appropriate government in this behalf and to the
conciliation officer. Such a settlement arrived at by agreement between the
employer and workmen otherwise than in the course of conciliation proceeding
is binding only on the parties to the agreement as provided in Section 18 (1)
of the Industrial Disputes Act, 1947. Such a settlement is not binding on the
other workmen who are not parties to the settlement.
From the above, it is evident that a settlement arrived at in the course of conciliation
proceeding shall be valid and binding on all the present and future employees of the
establishment but not to past or retired workmen. 97 It is not necessary that if there are
several unions in the establishment, all the unions must be represented. It is enough if one
of such unions enters into a settlement with the management in the course of conciliation
proceedings. 98

95 Tata Chemicals Ltd v. Workmen, (1978) 1 LLJ 22 (SC}.

96 (1986) Lab. IC 667. 670 (SC}.
97 Management of Pandian Roadways Corporation v. Labour Court, (1994) Lab. IC 1817.
98 See Bata Shoe Co. (Pvt.) Ltd v. Ganguli D N, AIR 1961 SC 158: See also Ram Pukar Singh v. Heavy
Engineering, (1995) LLR 201.
 Settlement of Industrial Disputes • 2 9 5

The decision is, however, open to criticism. Assume that there are 4,000 workers
employed in an establishment. Out of these 4,000 workers, 2,000 workers belong to Union
A, 1,800 workers belong to Union Band 200 workers belong to a Union C (management
sponsored union). Assume further that in an industrial dispute between labour and
management, Union C arrived at a settlement with the management in the course of
conciliation proceedings. According to the Supreme Court, the settlement entered into
between the management and Union C representing 200 workers shall be binding on the
other two unions representing 3,800 workers. ls it desirable in the interest of industrial peace
and harmony that such a settlement should bind all the workmen? It is highly doubtful if
the fate of 3,800 workers should be allowed to be determined by a management-sponsored
union having only 200 workmen as its members.
In Praga Tools Ltd v. Praga Tools Mazdoor Sabha 99, the Court extended the aforesaid
principle in cases where the conciliation officer arrived at a settlement between the
workmen and management after the submission of the failure report. In this case, the
issue was whether a settlement brought about after the submission of failure report by
the conciliation officer binds all workmen including the workmen of the union which was
not represented in a conciliation proceedings. The High Court answered the question in
the affirmative and held that such a settlement was binding on all the workmen including
the workmen of a union who did not join the conciliation proceedings. Be that as it may,
the aforesaid view encouraged the minority union. This has invited the attention of the
Supreme Court in Herbert Sons Ltd v. Workman, 100 wherein the court ruled that a settlement
arrived at with a majority union precludes a minority union from raising dispute on the
same subject-matter thereby making such settlement binding even on members of the
minority unions. However, if there is a dispute that the settlement is not bona fide in nature
or that it has been arrived at on account of fraud, misrepresentation or concealment of facts
or even corruption and other inducements, it can be the subject-matter of an industrial
dispute which an appropriate government may refer for adjudication after examining the
allegation prima facie. The appropriate government must satisfy itself prima facie whether
the allegation needs to be adjudicated, more so when there is a settlement which is reached
with the help of the conciliation officer in which case, there is a basic assumption that the
settlement must be fair and reasonable. A settlement which is sought to be assailed has to
be scanned and scrutinized.
In National Engineering Industries v. State of Rajasthan 101 , showing its concern about
the above issue, the Supreme Court observed that every trade union registered under the
Trade Unions Act, 1926 having a few members, if allowed to raise industrial disputes for
reference, will defeat the very purpose of a settlement. That is why it is only a representative
union which has been given the right to raise an industrial dispute. Under the Voluntary
Code of Discipline and also under various state laws there can be, at a given point of time,
only one representative union. Under the Rajasthan Act, a representative union means a
union for the time being registered as a representative union under the said Act. Although,
representative union is not defined in the Act but in common parlance, it means the union
which has been registered as the majority union and thus entitled to represent all the workers
and thereby precluding the minority union from raising an industrial dispute on the same

99 In Fraga Tools Ltd v. Fraga Tool Mazdoor Sabha, (1975) 1 LLJ 218: Sec also A L F Hindustan Zinc Ltd
v. HZ Workers' Union, (1988) Lab. IC 1361.
100 (1977) Lab IC 162 (SC).
101 (2000) 1 sec 371.
296 • Industrial Relations and Labour Laws

subject-matter. Further, it is the representative union which alone can give notice under
Section 19(2) of the ID Act terminating the settlement. Any notice given by a union which
does not represent the majority of the persons bound by the settlement or which is not a
representative union is illegal. The Court further held that merely because a settlement in
the course of conciliation proceedings was arrived at between the majority union and the
management on a holiday, it cannot render such a settlement invalid. There is no bar in
having conciliation proceedings under the Act on a holiday. To arrive at a settlement, a
holiday abnosphere is more relaxed and more congenial.
It may be noted that the Second National Commission on Labour has recommended
that a union, which does not have at least 10 per cent membership amongst the employees
in an establishment, should have no locus standi in that establishment.
The Supreme Court in ITC Ltd. Workers' Welfare Association v. Management of ITC
Ltd102 decided five important issues connected with the settlement arrived at in the course of
concilation proceedings namely, (z) Is it open to the industrial tribunal to ignore the settlement?
(iz) What is the effect of a settlement arrived at in the course of conciliation proceedings? (iii)
What preswnption can be drawn if a settlement is arrived at in the conciliation proceedings?
(iv) What weight should be attached to a settlement arrived at in the course of conciliation
proceedings? and (v) Can the validity of the settlement arrived at in the course of conciliation
proceeding be tested on the touchstone of Article 14 of the Constitution?
As to the first issue, the Supreme Court held that the industrial adjudicator has to keep
in the forefront of his mind the settlement reached under Section 18(3) of the Act. Once it
is found that the terms of the settlement operate in respect of the dispute raised before it,
it is not open to the industrial tribunal to ignore the settlement or even belittle its effect by
applying its mind independent of the settlement unless the settlement is found to be contrary
to the mandatory provisions of the Act or unless there is non-conformity with the norms
by which the settlement could be subjected to limited judicial scrutiny.
Regarding the second issue, the Court held that a settlement arrived at in the course
of conciliation proceedings with a recognized majority union has extended application
as it will be binding on all workmen of the establishment, even those who belong to the
minority union which had objected to the same. To this extent, it departs from the ordinary
law of contract. The object obviously is to uphold the sanctity of settlements reached with
the active assistance of the conciliation officer and to discourage an individual employee
or a minority union from scuttling the settlement.
Coming to the third issue, the Court observed that the settlement arrived at in the
course of conciliation proceedings carries a presumption that it is just and fair. An unjust,
unfair or mala fide settlement militates againstthe spirit and basic postulates of the agreement
reached as a result of conciliation and, therefore, such settlement will not be given effect
to while deciding an industrial dispute. Of course, the issue has to be examined keeping in
view the presumption that is attached to the settlement under Section 12(3).
As to the fourth issue, the Court said that a settlement which is a product of collective
bargaining is to be given due weight and consideration, more so when a settlement is arrived
at in the course of conciliation proceeding. The settlement can only be ignored in exceptional
circumstances, viz., if it is demonstrably unjust, unfair or the result of mala fides such as
corrupt motives on the part of those who were instrumental in effecting the settlement.
Keeping that apart, the settlement has to be judged as a whole, taking an overall view.

102 (2000) 1 sec 371.

 Settlement of Industrial Disputes • 297

As regards the last issue, the Court held that there may be some facets which apply in
common to determine the crucial issue whether the settlement on the whole is just and fair
but that is not to say that the settlement is liable to be tested on the touchstone of Article
14 of the Constitution.

A. Constitution
A procedure similar to the constitution of a board of conciliation is provided for bringing
into existence a court of inquiry as well. While a board of conciliation may be constituted
for promoting the settlement of an industrial dispute; the purpose for which a court of
inquiry may be constituted is' for enquiring into any matter appearing to be connected with
or relevant to an industrial dispute.' 103 The idea of a court of inquiry is borrowed from the
British Industrial Courts Act, 1919. This Act enables the minister on his own motion and
irrespective of the consent of the parties to a dispute, to set up a court of inquiry to enquire
into the report on the causes and circumstances of any trade dispute, together with such
recommendations as the court may make for the resolution of the dispute. Perhaps because
of the extended field of operation of the court of inquiry, the legislature thought it fit to allow
the parties to use instruments of economic coercion during pendency of proceeding before it.

B. Jurisdiction of the Court of Inquiry

The Act empowers the appropriate government to constitute a court of inquiry to inquire into
any matter appearing to be connected with or relevant to an industrial dispute. 104 The court
of inquiry consists of one or more independent persons at the discretion of the appropriate
government. Where a court consists of two or more members, one of them shall be appointed
as a chairman. 105 The court having the prescribed quorum, may act notwithstanding the
absence of the chairman or any of its members or any vacancy in its number. However, if the
appropriate government notifies that the services of the chairman have ceased to be available,
the court shall not act until a new chairman has been appointed. 106 Court can inquire into
matters'connected with or relevantto an industrial dispute' but not into the industrial dispute.

C. Duties of the Court

It is the duty of the court of inquiry to inquire into matters referred to it and submit its
report to the appropriate government, ordinarily within 6 months from the commencement
of its inquiry. 107 This period is, however, not mandatory and the report even after the said
period would not be invalid.

D. Publication of the Report

The Act requires that the report of appropriate government shall be published within 30
days of its receipt.

103 Section 6 (1).

104 Ibid.
105 Section 6 (2).
106 Section 6 (3).
107 Section 14.
298 • Industrial Relations and Labour Laws

Voluntary arbitration is one of the effective modes of settlement of an industrial dispute;

it supplements collective bargaining. When negotiation fails, arbitration may prove to be a
satisfactory and most enlightened method or resolving an industrial dispute. It provides 'a
new focus for set-up animosities.' It has been found that in 'many arbitration cases, in which
the parties start out by being angry at each other, they end up being less so. The winning
party is satisfied, and the losing party is likely to feel aggrieved, not at the other party, but
at the arbitrator.' 108 Further, informal arbitration offers an opportunity to dissipate hard
feelings which the industrial dispute may have aroused. 109
It is important because it is (z) expected to take into consideration the realities of the
situation; (iz) expected to meet the aspiration of the parties: (iii) based on voluntarism; (iv) does
not compromise the fundamental position of the parties and (v) expected to promote mutual
trust. 110 However, it is unfortunate that despite government's stated policy to encourage
collective bargaining and voluntary arbitration, India adopted only compulsory adjudication
system ever since independence and did not give legal sanctity to voluntary arbitration till
1956. The severe criticism111 of conciliation and adjudication led to the introduction of Section
10 A relating to voluntary arbitration through the Industrial Disputes (Amendment) Act, 1956.
The 1956 Amendment to some extent has tried to give legal force to voluntary arbitration but
still it stands on a lower footing than adjudication as it permits the parties to adopt recourse
to arbitration prior to reference to adjudication. Further, 1956-Amendment also did not place
an arbitrator on the same footing as that of adjudicators. The 1964 Amendment did try to
bridge the gap but still the disparity lies in several respects.

A. Choice of Dispute Settlement

Section lOA (1) 112 of the Industrial Disputes Act, 1947 authorizes the parties to make
reference to a voluntary arbitrator. But before the reference may be made to the arbitrator,
four conditions must be satisfied:
1. The industrial dispute must exist or be apprehended.

108 See Julius G Getman, Grievance Arbitration: 'Law and Policy in India',American Labour Supplement,
New Delhi, December 15, 1976.
109 Ibid.
110 See Manohar Lal. 'Problems of Arbitration from Management's Point of View', Arbitration News,

Vol. 1, 1966, 32.

111 A somewhat similar scheme of settlement operating in Australia was severely criticized, as early as

1929 by the British Economic Commission wherein it intended to consolidate the contesting parties
into two opposing camps (See RF Rustomji, The Law of Industrial Disputes in India, (2nd ed. 1954),
484-85. The ILO gave renewed emphasis to such criticism. In 1951, it recommended voluntary
arbitration as a better mode of settlement of industrial disputes. [See !LI, Labour Law and Labour
Relations (Sharma ed). (1968), 179].
112 This provision is similar to Section 10 (2), where the parties can request the appropriate government

to refer the dispute to the appropriate government for adjudication. The government must do so
if satisfied that the persons applying represent the majority.
 Settlement of Industrial Disputes • 299

2. The agreement must be in writing.

3. The reference must be made before a dispute has been referred under Section 10 to a
labour court, tribunal or national tribunal.
4. The name of arbitrator/ arbitrators113 must be specified.

B. The Conditions Precedent

A perusal of the aforesaid provision may conveniently be delineated with reference to:

1. Parties to arbitration. Under the Industrial Disputes Act, 1947, a reference

to the voluntary arbitrator under Section 10 A can only be made if a dispute
arises between employers and employers, or between employers and workmen,
or between workmen and workmen.

2. Subject-matter of reference. The Industrial Disputes Act, 1947 seeks to

resolve the industrial disputes. The parties can only make a reference of an
'industry dispute' to an arbitrator. If, for instance, parties refer a dispute, which
is not an 'industrial dispute', the arbitrator will have no jurisdiction to make
a valid award.11 4

3. Time for making the agreement. Section lOA of the Industrial Disputes Act,
inter alia, provides that the reference to the arbitrator should be made at any
time before the dispute has been referred under Section 10 to a labour court,
tribunal or national tribunal.

C. Selection of Arbitrator
The next phase is the selection of the arbitrator. The parties acting under Section lOA are
required to select any person or persons including the presiding officer of a labour court,
tribunal or national tribunal to arbitrate in a dispute. Further, the parties may select or
appoint as many arbitrators as they wish. However, where a reference is made to an even
number of arbitrators, the parties by agreement should provide for appoinbnent of an
umpire who shall enter upon the reference and if the arbitrators are equally divided in their
opinion, the award of umpire shall prevail and be deemed to be the 'award'. However,
Section lOA unlike the 'procedure for voluntary arbitration of labour disputes' as approved
by the National Arbitration Promotion Board or Section 7 (1) of the Industrial Relations
Bills, 1978, does not provide for any agreement if the parties on their own fail to agree to
an arbitrator or arbitrators.

D. Arbitration Agreement
1. Agreement must be in writing. Once the parties agree to refer the dispute to
arbitration, it is required to make such arbitration agreement in writing. 115

113 The presiding officer of a labour court or tribunal may also be an arbitrator.
114 SeeRaza Textiles Labour Union v. Mohan, (1964) 2 LLJ 65 (Allahabad): Rohtas Industries Ltd v. Its
Workmen, (1968) 1 LLJ 710 (Patna); and Sindhu Hochtief v. Pratap Dialdas, (1968) 2 LLJ 515 (Bombay).
115 Sub-section (1) of Section 10 A
300 • Industrial Relations and Labour Laws

2. Form of the agreement. Section lOA (2)(d) requires that the arbitration agreement
should be in the prescribed form and Rule 7 of the Industrial Disputes (Central) Rules, 1957,
provides that it should be in Form C. How far and to what extent the aforesaid requirement
should be complied with formed the subject-matter of dispute in North Orissa Workers'
Union v. State of Orissa.11 6 The Court held that it is not necessary that the agreement must
be made in the prescribed form 'C'. It would be enough if the requirements of that form
are substantially complied with.
3. Signature of the parties. Section lOA (2) further requires that an arbitration agreement
shall be signed by the parties thereto in such manner as may be prescribed in the rules framed
by the appropriate government. However, decided cases reveal that the validity of the
award or arbitration agreement has often been questioned on the basis of non-compliance of
signature of all parties on the arbitration agreement. This has been a ground for not issuing
the notification by the appropriate government and enabling the government to refer such
dispute to labour tribunals. This tendency of appropriate government has, however, been
scrutinized by the judiciary.
4. Consent of arbitrator(s). Even though the Act does not expressly require that the
arbitration agreement must be accompanied by the consent of arbitrator, the Industrial
Disputes (Central) Rule, 1957 provides that the arbitration agreement must be accompanied
by consent, in writing, of the arbitrator or arbitrators. But for the purposes, it is enough if
there is substantial compliance with this rule.11 7
5. Submission of the copy of arbitration agreement. Once an arbitration agreement
has been entered into and executed in the prescribed form under Section lOA, a copy of the
arbitration agreement shall be forwarded to the appropriate government and the conciliation
officer.11 8 Non-submission of a copy of the arbitration agreement to the appropriate
government would make the award made thereon outside the purview of Section lOA of
the Industrial Disputes Act, 1947 because Section lOA (4) is interlinked with Section lOA
(3) and only on satisfaction of the mandates of Section lOA there would be an investigation
into the dispute and the award would be made by the arbitrator and then forwarded to the
appropriate government. 119
6. Publication of arbitration agreement. The appropriate government comes into
picture in the process of reference to arbitrator only after the receipt of a copy of a valid
arbitration agreement. If this is done:
.... the appropriate government shall, within one month from the date of the receipt
of such copy publish the same in the official gazette. 120
The aforesaid provision raises a question whether the publication of the agreement is
mandatory or directory. A corollary of this issue is: whether the appropriate government can
override the wishes of the parties to refer the matter for arbitration by making a reference
to labour court, tribunal or national tribunal. This issue may be discussed under two heads:
(i) Publication of arbitration agreement, and
(iz) time of publication.

116 North Orissa Workers' Union v. State of Orissa, (1971) LLJ 199 (Orissa).
117 Ibid.
118 SectionlOA (3) of the Industrial Disputes Act, 1947.
119 Moorco (India) Ltd v. Government of Tamil Nadu, (1993) Lab. IC 1663.
120 sub-section (3) of the Section lOA of the Industrial Disputes Act, 1947.
 Settlement of Industrial Disputes • 301

(i) Publication of arbitration agreement. In Karnal Leather Karamchari Sangathan v. Liberty

Footwear Co.,121 the Supreme Court was invited to consider whether the publication of
arbitration agreement under Section 10A(3) is obligatory. The Supreme Court answered
the question in the affirmative and observed:

The voluntary arbitration is a part of the infrastructure of dispensation of

justice in industrial adjudication. The arbitrator thus falls within the rainbow
of statutory tribunals. When a dispute is referred to arbitration, it is therefore,
necessary that the workers must be made aware of the dispute as well as the
arbitrator whose award ultimately will bind them. They must know what is
referred for arbitration, who is their arbitrator and what is in store for them.
They must have an opportunity to share their views with each other and if
necessary, place the same before the arbitrator.
The Court held that the arbitration agreement must be published before an arbitrator
considered the merits of the disputes. Non-compliance of this requirement will be fatal to
the arbitration award.
(ii) Time for publication. The high courts are divided on the issue: whether the
requirement of publication of agreement within one month is mandatory or directo~f While
the division bench of the Madhya Pradesh High Court in K P Singh v. S K Gokhale 1 and the
Orissa High Court in North Orissa Workers' Union v. State of Orissa 123 have taken the view that
the requirement is mandatory, the High Court of Punjab and Haryana in Landra Engineering
and Foundary Workers v. Punjab State124, the Delhi High Court in Mineral Industrial Association
v. Union of India 125, Madhya Pradesh High Court in Modern Stores Cigarettes v. Krishnadas
Shah 126 and Aftab-e-Jadid, Urdu Daily Newspapers v. Bhopal Shramjivi Patrakar Sangh 127 has
taken the opposite view and held that the requirement is only directory. The decisions of
these three high courts which held the provisions to be directory said:

... on the true construction of ... Section 10A(3) that the other requirement
namely, its notification within one month from its receipt is only directory
and not imperative.

E. Voluntary Labour Arbitrator

1. Nature of Voluntary Arbitrator. It is exceedingly difficult to maintain a distinction
between statutory and private arbitrator on the basis of nomenclature because both are
products of statute: the fonner is made under the Industrial Disputes Act, 1947 while the latter
under the Arbitration Act, 1940. But such a distinction has not come to stay through a series

121 (1989) 2 LLJ 550 (SC). Also see Kathayee Cotton Mills Ltd v. District Labour Officer (1988) 1 LLJ 417
(Ker.): Krishnaveni Transports v. Special Deputy Commissioner of Labour, Madras, (1989) 2 LLJ 245.
122 K P Singh v. SK Gokhale, (1970) 1 LLJ, 125.
123 North Orissa Workers' Union v. State of Orissa (1971) 2 LLJ 199.
124 Landra Engineering & Foundary Workers v. Punjab State, (1969). Lab. IC 52.
125 Mineral Industrial Association v. Union of India, (1971) Lab. IC 837.
126 Modern Stores Cigarettes v. Krishadas Shah, (1970) Lab. IC 196.
127 Aftab-e-jadid, Urdu Daily Newspapers v. Bhopal Shramjivi Patrakar Sangh, (1985) 1 LLJ 272.
302 • Industrial Relations and Labour Laws

of judicial decisions. Thus, in R V National Joint Council for the Craft of Dental Technicians, 128
Chief Justice Goodard drew such a distinction when he said:

There is no instance of which I know in the books, where certiorari or prohibition

has gone to any arbitrator, except a statutory arbitrator, and a statutory
arbitrator is a person to whom by statute, the parties must resort.
The aforesaid distinction was adopted by the Supreme Court in Engineering Mazdoor
Sabha v. Hind Cycles Ltd129 wherein Justice Gajenderagadkar introduced the concept of
'statutory arbitrator' in India by holding:

Having regard to several provisions contained in the Act and rules framed
thereunder, an arbitrator appointed under Section lOA cannot be treated to
be exactly similar to a private arbitrator to whom a dispute has been referred
under an arbitration agreement under the Arbitration Act. The arbitrator under
Section lOA is clothed with certain powers. His procedure is regulated by
certain rules and the award pronounced by him is given by statutory provisions
a certain validity and a binding character for a specified period. Having regard
to these provisions, it may perhaps be possible to describe such an arbitrator
in a loose sense, a statutory arbitrator.
2. Conduct of the Arbitrator. The Industrial Disputes Act, 1947 does not prescribe
how the conduct of the arbitrator can be regulated. However, the decided cases130 of the
Supreme Court and high courts reveal that an arbitrator should be impartial and must build
a relationship of confidence with both the parties. Thus, he or any of his near relatives should
not accept any hospitality or favour from any party to the disputes before him because justice
should not only be done but it must be seen to be done. 131 If he does so, it would be an act
of misconduct. 132Similarly, if he does not hear the party or exceeds his jurisdiction or fails
to determine an important question referred to him, his decision is liable to be interfered. 133
3. /urisdiction of the Voluntary Arbitrator. An arbitrator under Section lOA comes
into existence when appointed by the parties, and he derives his jurisdiction from the
agreement of the parties. If the arbitrator decides matters not referred to him by the parties,
he acts beyond his jurisdiction. For instance in Raza Textile Labour Union v. Mohan, 134 three
disputes upon which the arbitrator gave the award were not covered by 167 matters of
disputes which were referred to him. The Court quashed the award as these matters were
beyond the jurisdiction of the arbitrator. Similarly, in Rohtas Industries Ltd v. Workmen 135,
the Patna High Court held that the award regarding dearness allowance was vitiated by the

128 R V National Joint Council for the Craft of Denal Technicians, (1953) All ER 327.
129 Engineering Mazdoor Sabha v. Hind Cycle Ltd (1962) 2 LLJ 760 (SC).
130 Air Corporation Employees' Union v. D V Vyas, (1962) 1 LLJ 31 (Bombay); Sindhu Hochiejv. Pratap
Dialdas, (1968) 2 LLJ 515 (Bombay).
131 Ibid.
132 See National Project Construction Corporation Ltd v. Their Workmen, (1960) Lab. IC 907 (Patna).
133 See Gujarat Steel Tubes Ltd v. Their Workmen, (1980) 1 LLJ 137; Hindustan Construction Co. Ltd v. All

India Hindustan Construction Workers Union, (1974) 2 LLJ 212. (Kerala); National Project Construction
Corporation Ltd v. Their Workmen, 1970 Lab. IC 907 (Patna).
134 Raza Textile Labour Union v. Mohan, (1964) 2 LLJ 65 (Allahabad).
135 Rohtas Industries Ltd v. Workmen, (1968) 1 LLJ 710.
 Settlement of Industrial Disputes • 303

fact that it was not in accordance with the terms of agreement. Likewise, the Madras High
Court in Vaikuntam Estate v. Arbitrator136 quashed the interim award of arbitrator where
he exceeded the terms of reference. Further, unlike the jurisdiction of adjudicatory bodies,
the arbitrator cannot arbitrate upon matters 'incidental to' 137 or 'any matter appearing to
connected or relevant' 138 to the dispute. But unlike adjudicatory authorities under the Act,
the arbitrator has wider power to decide upon all 'industrial disputes' referred to him under
an arbitration agreement irrespective of the fact whether they fall under Schedule II or III
of the Industrial Disputes Act, 1947.

4. Powers of Arbitrator: Section 11A merely provides:

Where an industrial dispute relating to the discharge or dismissal of a workmen

has been referred to a labour court, tribunal or national tribunal for adjudication
and, in the course of the adjudication proceedings, the labour court, tribunal
or national tribunal, as the case may be, is satisfied that the order of discharge
or dismissal was not justified, it may, by its award, set aside the order of
discharge or dismissal and direct reinstatement of the workman on such terms
and conditions, if any, as it thinks fit, or give such other relief to the workman
including the award of any lesser punishment in lieu of discharge or dismissal
as the circumstances of the case may require.
The aforesaid Section 11 A does not specifically mention 'arbitrator'. It, therefore,
raises a question whether the arbitrator has the power to interfere with the punishment
awarded by the management. Justice Krishna Iyer in Gujarat Steel Tubes Ltd v. Gujarat Steel
Tubes Mazdoor Sabha 139 answered the question in affirmative. He stated:

Section 11 did clothe the arbitrator with similar powers as tribunals, despite
the doubt created by the abstruse absence of specific mention of 'arbitrator'
in Section 11 A.
In Rajinder Kumar v. Delhi Administration,140 the Supreme Court explained the powers
of the arbitrator:

'In exercise of the jurisdiction conferred by Section llA of the Industrial

Disputes Act, 1947 both arbitrator and ... (the Supreme Court) can reappraise
the evidence led in the domestic inquiry and satisfy themselves whether the
evidence led by the employer established misconduct against the workman.
It is too late in the day to contend that the arbitrator has only the power to
decide whether the conclusions reached by the inquiry officer were plausible
or deducible from the evidence led in the inquiry and not to re-appraise the
evidence itself and to reach the conclusion whether the conduct alleged against
the workman has been established or not. 141

136 Viakuntam Estate v. Arbitrator, (1968) 1 LLJ 79 (Madras).

137Section 10 (4).
138 Section 10 (1) (d).
139 Gujarat Steel Tubes Ltd v. Gujarat Steel Tubes Mazdoor Sabha (1980) 1 LLJ 137.
140 1986 Lab. IC 374 (SC).
141 Id. at 380--81.
304 • Industrial Relations and Labour Laws

The Court added:

Where the findings of misconduct are based on no legal evidence and the
conclusion is one to which no reasonable man would come, the arbitrator
appointed under Section lOA or this court in appeal under Article 136 can
reject such findings as perverse. The industrial tribunal or the arbitrator or a
quasi-judicial authority can reject not only such findings but also the conclusion
based on no legal evidence or if it is merely based on surmises and conjectures
unrelated to evidence on the ground that they disclose total non-application
of mind.

F. Signing of an Award
Sub-section (4) of Section lOA requires that the arbitration award shall be signed by
the arbitrator or all the arbitrators, as the case may be. The provisions of the section are
mandatory. The award of arbitrator shall be void and inoperative in the absence of signature
in view of mandatory term of the section.

G. Submission of an Award
Section lOA (4A) of the Act enjoins the arbitrator to investigate the dispute and submit its
award to the appropriate government. The non-submission would render the award in-
operative.142

H. Publication
Sub-section (3) of Section lOA requires that a copy of the arbitration agreement shall be
forwarded to the appropriate government and the conciliation officer and the appropriate
government shall within one month from the date of receipt of such copy, publish the same
in the official gazette.
Can the award of the arbitrator under Section lOA be set aside on its non-publication
in the official gazette? The Supreme Court in Karnal Leather Karmchari Sanghatan v. Liberty
Footwear Company 143 answered the question in the negative and observed:

Now look at the provisions of sub-section (3). It is with respect to time for
publication of the agreement. But publication appears to be not necessary for
validity of the agreement. The agreement becomes binding and enforceable as
soon as it is entered into by the parties. Publication is also not an indispensable
foundation of jurisdiction of the arbitrator. The jurisdiction of the arbitrator
stems from the agreement and not by its publication in the official gazettee.
Why then publication is necessary? Is it an idle formality? Far from it, it
would be wrong to construe sub-section (3) in the manner suggested by
counsel for the appellant. The Act seeks to achieve social justice on the basis
of collective bargaining. Collective bargaining is a technique by which dispute
as to conditions of employment is resolved amicably by agreement rather

142 Sec K P Singh v. S K Gokhale, op. cit., 125.

143 (1989) 2 LLJ 550 (SC).
 Settlement of Industrial Disputes • 305

than coercion. The dispute is settled peacefully and voluntarily although

reluctantly between labour and management. The voluntary arbitration is a
part of infrastructure of dispensation of justice in industrial adjudication. The
arbitrator thus falls within the rainbow of statutory tribunals. When a dispute
is referred to arbitration, it is, therefore, necessary that the workers must be
made aware of the dispute as well as the arbitrator whose award ultimately
would bind them. They must know what is referred to arbitration, who is
their arbitrator and what is in store for them. They must have an opportunity
to share their views with each other and if necessary to place the same before
the arbitrator. This is the need for collective bargaining and there cannot be
collective bargaining without involving the workers. The union only helps the
workers in resolving disputes with their management but ultimately it would
be for the workers to take decision and suggest remedies. It seems to us that
the arbitration agreement must be published before the arbitrator considers
the merits of the dispute. Non-compliance of this requirement would be fatal
to be arbitral award.
The aforesaid view was followed in SK M Sangh v. General Manager, W C Ltd144•

I. Power of Superintendence of the High Court: Article 227 of the Constitution

over Voluntary Arbitrators
In addition to Article 226, Article 227 confers upon high courts the power of superintendence
over all lower courts and tribunals within their jurisdiction. A question, therefore, arises
whether a high court can interfere under Article 227 with an award of an arbitrator (under
Section lOA). The Supreme Court in Engineering Mazdoor Sabhav. Hind Cycles Ltd145 answered
it in negative and placed Article 227 at par with Article 136. It held: Like Art. 136, Art. 227
refers to courts and tribunals and what we have referred to the requirements of Art. 136
may prima facie apply to the requirements of Art. 227. 146
The net effect of the aforesaid statement is that the high court is not competent to
have power of superintendence over voluntary arbitrators under Section lOA because the
'arbitrator' was not a 'tribunal'.
But in Rohtas Industries Ltd v. Rohtas Industries Staff Union 147, Justice Krishna Iyer even
though conceded that the position of arbitrator under Section lOA (as it then stood) vis-
a-vis Article 227 might have been different but in view of the changed situation after the
amendment in the Industrial Disputes Act by XXXVI of 1964 observed:

Today, however, such an arbitrator has power to bind even those who are not
parties to the reference or agreement and the whole exercise under Section
lOA as well as the source of the force of the award on publication derive from
the statute. It is legitimate to regard such an arbitrator now as part of the
methodology of the sovereign's dispensation of justice, thus falling within the
rainbow of statutory tribunals amenable to judicial review.

144 (1998) 1 LLJ 150, 152.

145 Engineering Mazdoor Sabha v. Hind Cycles Ltd, op cit., 760.
146 Id at 884.
147 Rohtas Industries Ltd v. Rohtas Industries Staff Union, (1976) 1 LLJ 272 (SC), as per Krishna Iyer J.
306 • Industrial Relations and Labour Laws

The aforesaid view was reiterated in the majority judgement in Gujarat Steel Tubes
case. 148
However, one is tempted to ask whether the Court's decision would have been different
if the government did not issue a notification under sub-section 3A of Section lOA on the
ground that persons making a reference do not represent the majority of each party. An
answer in affirmative would revive the view stated in Engineering Mazdoor Sabha (supra).
Under the circumstances, it is suggested that the Parliament may clarify the position by
legislative amendment.

J. Relief under Article 136 of the Constitution from Arbitration Award

The question that arose before the Supreme Court was whether an appeal would lie to it
under Article 136149 of the Constitution from an arbitration award under Section lOA of the
Industrial Disputes Act. The Supreme Court in Engineering Mazdoor Sabha v. Hind Cycles 150
answered the question in negative. It stated:

..... the arbitrator is not a tribunal because the State has not invested him with
its inherent judicial power and the power of adjudication which he exercises is
derived by him from the agreement of the parties. His position thus, may be said
to be higher than that of a private arbitrator and lower than that of a tribunal.
Accordingly, the Court held that the decision of arbitrator would not amount to
'determination' or 'order' for the purposes of Article 136. But, this position appears to have
been changed in Rohtas Industries v. Rohtas Industries Staff Union. 151 The Court in view of the
amendment in 1964 of the Industrial Disputes Act appears to have extended the application
of Article 136 to an award of an arbitrator under Section lOA. This view was reiterated in
Gujarat Steel Tubes Ltd v. Gujarat Steel Tubes Mazdoor Sabha. 152
The aforesaid view removes one of the stated hurdles in the progress of arbitration,
namely, that in law, no appeal is maintainable against the award of the arbitrator.

K. Recommendation of the (Second) National Commission on Labour

The (Second) National Commission on Labour felt that arbitration as a dispute settlement
machinery is better than adjudication.

The final stage in the settlement of industrial disputes (where the parties are unable to settle
either through bipartite negotiations or through the good offices of the conciliation machinery

148 (1980)1 LLJ 137.

149 Under Article 136, the Supreme Court is empowered to grant special leave to appeal from any
judgement, degree, determination, sentence or order in any cause or matter passed or made by any
court or tribunal in the territory of India other than those constituted by or under any law relating
to armed forces in the territory of India.
150 Engineering Mazdoor Sabha v. Hind Cycles, op. cit., 760.
151 Rohtas Industries v. Rohtas Industries Staff Union, op. cit. 274.
152 Gujarat Steel Tubes Ltd v. Gujarat Steel Tubes Mazdoor Sabha, op. cit.
 Settlement of Industrial Disputes • 307

or through voluntary arbitration) is compulsory arbitration which envisages governmental

reference to statutory bodies such as labour court, industrial tribunal or national tribunal.
Disputes are generally referred for adjudication on the recommendation of the conciliation
officer who had dealt with them earlier. However, the appropriate government has discretion
either to accept or not to accept his recommendation and accordingly, to refer or not refer
the case for adjudication. The percentage of disputes referred to adjudication varied from
state to state. 153
The system of adjudication by labour court, tribunal and national tribunal has perhaps
been one of the most important instruments of regulating the rights of the parties in general
and wages, allowances, bonus, working conditions, leave, holidays and social security
provisions in particular. Such norms setting which in advanced countries is done through the
process of collective bargaining between the employers and the trade unions, is done in India
by adjudication system because the trade union movement is weak and is in no position to
negotiate with the employeronanequalfooting. However, this system has been criticized for its
unfavourable effects on the trade union movement. Further, undue dependence on compulsory
adjudication has deprived the trade unions of the incentive to organize themselves on a strong
and efficient basis and has rendered the unions mere petitioning and litigant organizations
arguing their cases before tribunals, etc. The system of adjudication has also been criticized
because of long delays involved in the final settlement of disputes, particularly, where one
or the other party chooses to go in appeal against an award. Such delays, it is argued, are
themselves responsible for much industrial strife. 154 Be that as it may, it is beyond doubt that
the labour judges occupy a very important position in adjudicating the disputes between
the management and the labour. The disputes which are brought before the labour judiciary
involve huge stakes, both for the management as well as the workers.

A. Origin and Growth of Adjudication System

In the era of laissez fair, employers enjoyed unfettered right to 'hire and fire'. They had vastly
superior bargaining powers and were in a position to dominate workmen in every conceivable
way. They preferred to settle terms and conditions of employment of workmen and abhorred
statutory regulation unless, it was to their advantage. However, this tendency coupled with
rise in the incidence of strikes and lockouts made it necessary for the government to intervene
in labour management relations. While voluntary and persuasive processes had been playing
their role in settling industrial disputes since 1929, World War II marked the beginning of
compulsory adjudication. Rule 81A of the Defence of India Rules, 1942 empowered the
government inter alia, to refer any trade dispute to adjudicators and to enforce the awards.
After the end of hostilities, these measures with a nwnber of innovations and modifications
were incorporated in the Industrial Disputes Act, 1947. The Act 'substitutes for free bargaining
between the parties a binding award by an impartial tribunal'. The tribunal is not bound
by contractual terms between the parties but can make a suitable award for bringing about
harmonious relations between the employer and the workmen. 'The industrial tribunal is
not fettered by any limitation on its power. The only limitation on its power is to bring about
harmonious relationship between the employer and the workmen.' In the original Act only one
constituting body, namely, industrial tribunal was designated for the compulsory settlement

153 Govemment of India, Report of theStudy Group on Industrial Relations (North Region) of the National
Commission on Labour, 19-20.
154 Govemment of India, Report of the Study Group on Industrial Relations, op. cit., 20.
308 • Industrial Relations and Labour Laws

of industrial disputes. Within a short span of 9 years of its working, it was found that a large
number of cases were referred to it. This led to the introduction of three-tier system, viz., the
labour court, tribunal and national tribunal in 1956.

B. Composition of Labour Court, Tribunal and National Tribunal

The issue of composition of labour courts and tribunals has an important bearing on their
working. The present system of reference to adjudication is, however, open to several
criticisms. First, from 'the workers' side it is often argued that with various restrictions placed
on strikes, the recourse to judicial determination of disputes should not be barred by the
government.'155 Second, the decision to refer disputes or to withhold reference is sometimes
not made on any strict principle and the system is open to pressurization. 156
The Industrial Disputes (Amendment and Miscellaneous Provisions) Act, 1956
introduces a three tier system for industrial adjudication. The machinery provided under
the Act consists of labour courts, industrial tribunals and national tribunals. The appropriate
government is empowered under Section 7 and 7A to constitute one or more labour courts
and industrial tribunals with limited jurisdiction, to adjudicate 'industrial disputes', and
the Central Government is authorized under Section 7B to constitute the national tribunal.
The labour courts, industrial tribunals and national tribunals are ad hoe bodies and consist
of a single member called presiding officer. The appoinbnent of the tribunal may, however,
be for a limited duration. 157
Appointment of Assessors. There is no provision for the appoinbnent of assessors
in labour courts, but in case of industrial tribunal or national tribunal, the appropriate
government may appoint two persons as assessors to advise the tribunal in the proceedings
before it. 158 The assessors are supposed to be experts having special knowledge of the matter
under consideration and can be appointed only when the dispute involves technical matters
and requires expert knowledge for its settlement. This provision has hardly been used and
for all practical purposes, this is defunct.

C. Appointment, Qualifications and Disqualifications of Presiding Officer of

Labour Court, Tribunal and National Tribunal
Industrial peace, prosperity and progress depend upon the efficiency of the labour judiciary.
The labour judiciary is, thus the centre of the system of industrial adjudication in India. These

155 Government oflndia, Report of the Study Group for Sugar Industry, (1969) 48.
156Ibid.
157 This was explained by the Supreme Court in Minerva Mills Ltd v. Its Workers, AIR 1953 SC 505,507
in the following words:
Section 7 (now Section 7A) does not restrict or limit the powers of the government in any
manner and does not provide that a tribunal cannot be constituted for a limited period.
It is quite clear that such tribunals are not to be constituted permanently. It is only when
some industrial disputes arise that such tribunals are constituted and normally such
tribunals function so long as the disputes referred to them are not disposed of. But from
these circumstances, it cannot be inferred that it is not open to the government to fix a time
limit for the life of these tribunals in order to see that they function expeditiously and do
not prolong their own existence by acting in a dilatory manner.
158 Section 7A (4) of the Industrial Disputes Act, 1947.
 Settlement of Industrial Disputes • 309

appoinbnents of the presiding officers of the labour judiciary are made by the appropriate
Central Government. But at the same time, in a large number of industries, State is one of
the parties taking the part as the employer. In this context, the method of appoinbnent of the
labour judiciary assumes great significance. It is absolutely necessary that the labour judges
should be highly qualified, experienced, independent and committed to the Constitution of
India. In other words, labour judiciary should be independent of the executive government
as is the case of the judiciary under the Constitution. It is, therefore, desirable that the labour
judiciary must be taken out of the control of the executive government. 159
The Supreme Court in the State ofMaharashtra v. Labour Law Practitioner's Association and
others160 considered the relevant provisions of the Industrial Disputes Act and the Bombay
Industrial Relations Act and came to the conclusion that the labour court judges and judges
of the industrial court belong to 'Judicial Service', as that expression is understood in Charter
VI of the Constitution of India. According to the Court, the expression 'District Judge" covers
a judge of any principal civil court of original jurisdiction and includes the hierarchy of
specialized civil courts, such as labour courts and industrial courts. The tenn 'Courts' will cover
all tribunals, which are basically courts performing judicial functions, giving judgement, which
are binding. They are exercising sovereign judicial power transferred to them by the State.
Men, who could be described as 'independent' and having sufficient judicial experience, must
alone according to their lordships, be selected as labour court judges. The court accordingly
held that persons presiding over industrial and labour courts constitute a judicial service and
their recruibnent should be in accordance with Article 234 of the Constitution.
In case of labour courts, there is a wider range of alternatives in the qualifications for
appoinbnent. They are as follows: (a) he is, or has been, a judge of a high court; or (b) he
has, for a period of not less than 3 years, been a district judge or an additional district judge;
or (c) he has held any judicial office in India for not less than 7 years; (d) he has been the
presiding officer of a labour court constituted under any Provincial Act or State Act for not
less than 5 years. (e) He is or has been a deputy chief labour commissioner (central) or joint
commissioner of the state labour deparbnent, having a degree in law and at least 7 years'
experience in the labour deparbnent including 3 years of experience as conciliation officer:
Provided that no such deputy chief labour commissioner of joint labour commissioner
shall be appointed unless he resigns from the service of the Central Government or state
government, as the case may be, before being appointed as the presiding officer; or he is an
officer of Indian Legal Service in Grade III with 3 years' experience in the grade.
Qualifications for appoinbnent to tribunals are the same as prescribed for labour
courts in Section 7, clauses (a), (b), (f) and (g).Thus, the range of alternatives is narrower.
For national tribunals, the range of alternative qualifications for appoinbnent is further
narrower, namely, he is or has been a judge of a high court.
The requirements of Section 7C are applicable to all the three bodies, i.e., labour courts,
tribunals and national tribunals. Section 7C lays down disqualifications in regard to age
and independence of persons appointed. It requires that the person to be appointed must
be (a) an independent person and (b) less than 65 years of age. 161

159 (1998) 1 LLJ 868. This decision was followed by the full bench of the Gujarat High Court in Gujarat
Mazdoor Sabha v. State of Gujarat, (1999) 1 LLJ 39.
t6olbid.
161 Section 7 C.
3 1o • Industrial Relations and Labour Laws

In actual practice it is, however, found that insistence is made on judicial qualification
in the appoinbnent of presiding officer of labour courts and industrial tribunals. Further,
generally retired personnel are chosen to serve as a presiding officer. It is submitted that
the appoinbnent should be made in consultation with the Chief Justice of the high court.
This will ensure the appoinbnent of independent persons by the appropriate government as
presiding officer of labour courts and industrial tribunals. Further, the appoinbnent should
be made on a permanent basis with promotional avenues open to them.

D. Jurisdiction of Labour Court, Tribunal and National Tribunal

The labour court has jurisdiction162 to adjudicate industrial disputes which may be referred
to it under Section 10 of the Act by the appropriate government and which relates to: (1)
The propriety or legality of an order passed by an employer under the standing orders;
(2) the application and interpretation of standing order; (3) discharge or dismissal of
workmen including reinstatement of, or grant of relief to, workmen wrongfully dismissed;
(4) withdrawal of any customary concession or privilege; (5) illegality or otherwise of strike
or lockout; and (6) all matters other than those specified in the Third Schedule.
The industrial tribunals have jurisdiction to adjudicate industrial disputes referred
under Section 10 which relates to: (1) wages, including the period and mode of payment;
(2) compensatory and other allowances; (3) hours of work and rest intervals; (4) leave with
wages and holidays; (5) bonus, profit sharing, provident fund and gratuity; (6) shift working
otherwise than in accordance with standing orders; (7) classification by grades; (8) rules of
discipline; (9) rationalization; (10) retrenchment of workmen and closure of establishment;
and (11) any other matter that may be prescribed.
The national tribunals have jurisdiction to adjudicate industrial disputes which in
the opinion of the Central Government involve questions of national importance or are of
such a nature that industrial establishments situated in more than one state are likely to be
interested in or affected by such disputes and which may be referred to them by Central
Government.
Under the Industrial Disputes Act, 1947, the labour court, tribunal and national tribunal
can acquire jurisdiction only when there is existence or apprehension of an industrial
dispute and a reference of such dispute has been made by the appropriate government
under Section 10. The labour courts, tribunals and national tribunals are also required to
deal with complaints. Labour courts are also required to decide the question of amount of
money due under Section 33 C (2) of the Industrial Disputes Act, 1947.

E. Powers and Functions of Labour Court, Tribunal and National Tribunal

The labour court, tribunal and national tribunal have a statutory duty to hold the proceedings
expeditiously and, as soon as it is practicable on the conclusion163 thereof submit its award to
the appropriate government. They are empowered, subject to the rules in this behalf, to follow

162 Section
7 (1).
163 Section15. The Industrial Disputes Act, 1947 provides that where an industrial dispute has been
referred to a labour court, tribunal or national tribunal for adjudication, it shall hold its proceedings
expeditiously and shall within the period specified in the order referring such industrial dispute
or the further period extended under the second proviso to sub-section (2A) of Section 10, submit
its award to the appropriate government.
 Settlement of Industrial Disputes • 3 11

such procedure as they may think fit. 164 The rules provide for place and time of hearing of the
industrial dispute by adjudication or arbitration authorities as the case may be. 165

F. No Power to Pass 'No Dispute' Award

The Central Government in exercise of powers conferred by Section 38 of the Industrial
Disputes Act, 1947 has framed the rules, namely 'The Industrial Disputes (Central) Rules,
1957'. Rule 10B(9) of the aforesaid Rules which is as under, prescribes that the labour court
may proceed with the reference ex-parte in absence of any party and decide the reference:
lOB. Proceeding before the labour court, tribunal or national tribunal. (1) ...
(9) In case any party defaults or fails to appear at any stage, the labour court, tribunal
or national tribunal, as the case may be, may proceed with the reference ex-parte and decide
the reference application in the absence of the defaulting party:
Provided that the labour court, tribunal or national tribunal, as the case may be, shall
submit its award to the Central Government within one month from the date of arguments,
oral hearing or within the period mentioned in the order of reference, whichever is earlier.
From the aforesaid Rule, it is clear that it is obligatory on the part of the labour court to
answer the reference after considering merits of the case. However, in Satendra Singh Gujar
v. Bank of India 1f£>, the labour court had no power to pass an award as 'no dispute award'
on the ground that one party did not appear before the labour court. Further, the labour
court committed an error of law in rejecting the application for restoration of dispute filed
by the petitioner. Earlier, the division bench of the Madhya Pradesh High Court in the case
of Sital v. Central Government Industrial Tribunal-cum-Labour Court, Jabalpur 167 held that the
labour court has no power to dismiss the reference in defaults. The Court observed:
We think that the work' determination' used in the definition of'award' under Section
2(b) implies adjudication upon relevant material by the labour court or the tribunal. So,
it has been held that once a reference has been made under Section 10(1) of the Act, it
cannot be rescinded or cancelled: State of Bihar v. Ganguli168. It cannot also be dismissed for
default because that would amount to putting an end to the proceedings otherwise than
by adjudicating upon the dispute.

G. Power to Set Aside an Ex-parte Award

Even though there is no provision either in the Industrial Disputes Act to empower the
labour tribunals to set aside an ex-parte award, the Supreme Court169 through the process of
judicial legislation has invested in them such powers. However, industrial tribunal becomes
functus officio if the application is not moved within 30 days of the publication of the award
in the official gazette. Thereafter, the interim award stands vacated. 170

164 The Industrial Disputes Act, 1947, Section 11 (1).

165 Industrial Disputes (Central) Rules, 1957, Rule 13.
166 2011 LLR 62.
167 1969 MPLJ 33; 1969 JLJ 68.
168 (1958) 2 LLJ 834 (SC}.
169 Grindlays Bank Ltd v. Central Government Industrial Tribunal, (1981} 1 LLJ 327 (SC}; Satnam Verma v.
Union of India, (1985) Lab. IC 738.
170 DDA v. Shri Radhey Shyam Tyagi, (1996} LLR 216 (Delhi}.
3 12 • Industrial Relations and Labour Laws

H. Power to Cancel Order of Promotion and Grant ad hoe Increase in Wages

The tribunal may also cancel the promotion order passed by the management where it finds
that persons were superseded on account of mala fide victimization. 171 In this regard, the
tribunal may also frame rules of promotion in consultation with the management and union
and direct the management to give promotions or upgradation in accordance with those
norms/ rules. 172 Industrial tribunal while deciding upon the wage scales of the employees of
an establishment has full liberty to propose ad hoe increase of salaries as a part of the revision
of wages. 173 Further, figment into the revised scale is a part of revision of pay scales. 174

I. Power under Section 36A

The tribunal, however, under Section 36A has no power to determine the question about
propriety, correctness or validity of any provision or the powers conferred under any statute.
Further, the tribunal has no power to amend or modify its award after it became final except
to correct clerical mistakes and the powers under Section 11(3) could be exercised by the
tribunal after the proceedings pending before it have terminated. 175

J. Power to Grant interim Relief

The Supreme Court in Hotel Imperial v. Chief Commissioner 176 ruled that interim relief may
be granted (i) if there is a prima facie case, (ii) tribunal interference is necessary to protect a
party from irreparable loss or injury, and (iii) the balance and convenience. The Bombay
High Court in Bharat Petroleum Corporation Ltd v. R JTiwari 177 held that even full wages may
be granted by way of interim relief.
But 'where a quasi-judicial tribunal or arbitrator records findings based on no legal
evidence and the findings are either his ipse dixit or based on conjectures and surmises, the
inquiry suffers from the additional infinity of non-application of mind and stands vitiated.
The industrial tribunal or the arbitrator or a quasi-judicial authority can reject not only such
findings but also the conclusion based on no legal evidence or on surmises and conjectures
unrelated to evidence on the ground that they disclose total non-application of mind.'178

K. Powers of Tribunal under Section 11 A

The labour court, tribunal, national tribunal179 and voluntary arbitrator are also empowered
to go into the question of adequacy of the punishment. 180 Under Section 1lA, they may direct
'reinstatement of the workman on such terms and conditions, if any, as (they) think fit or give
such relief to the workman including the award of any lesser punishment in lieu of discharge

171 Workmen of Williamson Magar & Co. Ltd v. Williamson Magar & Co. Ltd, (1982} 1 LLJ 33 (SC}.
172 Ibid.
173 Tata Consultating Engineers v. Workmen, (1981} 2 LLJ 146, 156.
174Ibid.
175 Kaloo Singh v. Madan Lal, (1985) Lab. IC 130 (Rajasthan}.
176 (1959) 2 LLJ 553; see also EID Parry (India) Ltd v. Industrial Tribunal (1993} 2 LL N 168
177 (1995) LLR 259.
178 Rajender Kumar Kindra v. Delhi Administration, (1986} Lab. IC 374,381 (SC}.
179 Section 11 A
180 See MPFA. Dairy Development Corporation Ltd v. V K Durga Rao, (1988} Lab. IC 833 (Andhra Pradesh}.
 Settlement of Industrial Disputes • 3 13

or dismissal as the circumstances of the case require.' The purpose for which Section llA
has been enacted is to enlarge the powers of the labour court, tribunal or national tribunal,
as the case may be, so that in appropriate cases, even if they find that the inquiry had been
held properly and the charge is borne out by the evidence, they may still give some relief to
the worker if they find the punishment to be disproportionate to the charges held proved.
1. Jurisdiction to Record Evidence under Section 11A
(i) It is exercisable even in cases where opportunity of hearing was given and principles
of natural justice complied with before passing the order of dismissal but the appellate
authority find it necessary to record evidence in order to draw its own conclusion as to
whether the person dismissed was or was not guilty of the charges framed against him.
(ii) Where the employer had filed an application to produce evidences in support of the
charges and the appellate authority without disposing of that application set aside
the order of dismissal merely on the omission to hold domestic inquiry, the appellate
authority committed a grave error.
(iii) Omission to afford opportunity during domestic inquiry is curable by adducing
evidence before the appellate authority. 181
2. Scope of Consideration of Labour Courtffribunal under Section 11A
(i) Where domestic inquiry conducted by management is found defective.
(ii) Labour court may grant opportunity to the management and workmen to adduce
evidence.
(iii) On evidence, if labour court agrees with the management's conclusion that misconduct
was proved, it may declare dismissal order justified. 182
3. Production of Additional Evidence
The Supreme Court in Bharat Forge Company Ltd v. A B Zodge183 held that under Section llA
of the Industrial Disputes Act, 1947, employer is entitled to adduce evidence for the first
time before the tribunal even if the employer had not conducted any inquiry or the inquiry
conducted by him is found to be perverse. A domestic inquiry may be vitiated either for
non-compliance of rules of natural justice or for perversity. Disciplinary action taken on the
basis of a vitiated inquiry does not stand on a better footing than a disciplinary action with no
inquiry. The right of the employer to adduce evidence in both the situations is well recognized.
4. When Can the Labour Court Permit Parties to Adduce Evidence
In Rajendra Jha v. Labour Court 184, the Supreme Court held that even when the application
for permission to adduce further evidence is not made in the pleading, labour court is
empowered to permit the management to adduce evidence before it and to prove the
misconduct. However, the court has observed that the request of the employer to adduce
evidence should be made at the earliest opportunity or delay be explained. 185 However,
such request must be made before the closure of the proceedings. 186

181 See United Plantation Association of Southern India v. KG Sangameshariya, (1997} 4 SCC 741.
182 Punjab Dairy Development Corporation Ltd v. Kala Singh, (1997) 6 SCC 159.
183 1996 LLR 385.
184 1984 (Supp.) sec 520.
185 Adichancellor Farmers Service Co-operative Bank v. L C, (1996) LLR 659.
186 See Shankar Chakravarty v. Britannia Biscuit Co. Ltd, (1979) 3 SCR 1165; Delhi Cloth & General Mills v.
Ludh Budh Singh, (1972) 1 LLJ 180 (SC); Bharat Forge Co. Ltd v. A B Zodge, 1996 LLR 385 (SC).
3 14 • Industrial Relations and Labour Laws

5. No Obligation of Asking the Parties to Adduce Evidence

The tribunal is neither under a duty to give opportunity to the parties to adduce evidence
nor under an obligation to acquaint parties before it for their rights to adduce evidence
under Section llA. 187
6. Recommendation of the (Second) National Commission on Labour
The Second National Commission on Labour has recommended that Section llA of the
ID Act 1947 may be retained. However, the law may be amended to the effect that where
a worker has been dismissed or removed from service after a proper and fair inquiry on
charges of violence, sabotage, theft and/or assault, and if the labour court comes to the
conclusion that the grave charges have been proved, then the court will not have the power
to order reinstatement of the delinquent worker.
7. Powers of the High Court under Article 226
The High Court, in exercise of writ jurisdiction, can exercise similar powers and discretion
as exercised by labour court under Section llA 188 •

L. Powers of the Labour Court to Review the Award

The above power is restricted only to: (i) typographical mistake or (ii) accidental slip or
omission. 189

M. Discharge or Dismissal of a Workman and the Date of its Effect

When domestic inquiry is found defective, it relates back to the date on which the
management passed the order and not from the date of judgement. 190

N. Disposal of Preliminary or Technical Objections

It has been held in a catena of cases that all issues, preliminary or otherwise, should be
decided together so as to rule out the possibility of any litigation at the interlocutory stage.191

0. Discretion of Labour Court to Deny Relief to Workmen when the Claim was
Made after a Long Time
InHaryana State Co-operative Land Development Bankv. Neelam 19'2, a typist was appointed on
ad hoe basis in a bank. Her services were finally terminated after 17 months of service. She
joined some other establishment and continued to work there. While this was so, some of
the employees who were placed and terminated similarly as the said typist approached the

(1972) 1 LLJ 180; Shambhu Nath v. Bank of Baroda, AIR 1984 SC 289 and Adichancellor
187 Delhi Cloth Mills,
Farmers Service Co-operative Bank v. Labour Court, 1996 LLR 654.
188 See Oriental Containers Ltd v. Engg. Workers Association, (1996) LLR 739.
189 Mis Expo Modern Ltd v. Labour Court, (1995) LLJ 816.
190 Thiruvirkolam v. Presiding Officer, (1997) 1 SCC 9 and PH Kalyani v. Air France, (1964) 2 SCR 104 and
Desh Raj Gupta v. IT, (1991) 1 sec 249.
191 See Cooper Engineering Ltd. v. PP Mukherjee, (1976) 1SCR361; SK Varma v. Mahesh Chandra, (1983) SLR

799, D Maheshwari v. Delhi Administration, (1983) 3 SCR 949 and Taj Service Ltd. v. Delhi Administration,
(1990) LLR 25.
192 (2005) 1 LLJ 1153 (SC).
 Settlement of Industrial Disputes • 3 15

labour court and got certain relief. After more than 7 years, the said typist also raised an
industrial dispute. On reference, the labour court refused to grant any relief, inter alia, on
the ground that there was no justification for such delay. Thereafter, the appellant filed an
appeal before the Supreme Court. The Court upheld the award of labour court by observing
that: (i) The Industrial Disputes Act does not contain any provision which mandates the
industrial court to grant relief in every case to the workman. The extent to which a relief
can be moulded will inevitably depend upon the facts and circumstances obtaining in each
case. In the absence of any express provision contained in the statute in this behalf, it is not
for the Court to lay down a law which will have a universal application, (iz) It is right that
the courts and tribunals having preliminary jurisdiction have discretionary power to grant
appropriate relief to the parties. The aim and object of the Industrial Disputes Act may be to
impart social justice to the workman but the same by itself would not mean that irrespective
of his conduct, a workman would automatically be entitled to relief. The procedural laws
like estoppel, waiver and acquiescence are equally applicable to industrial proceedings. A
person in certain situation may even be held to be bound by the doctrine of acceptance sub
silentio. The employee did not raise any industrial dispute questioning the termination of
her services within a reasonable time. She even accepted an alternative employment and
has been continuing therein. (iii) The conduct of the employee in approaching the labour
court after more than 7 years is relevant factor for refusing to grant any relief to her. Such a
consideration on the part of the labour court cannot be said to be an irrelevant one.

P. Other Powers of Tribunals and Execution of Award

Every labour court, tribunal and national tribunal enjoys the same powers as are vested in
a civil court under the Code of Civil Procedure, 1908, when trying a suit. It can enforce the
attendance of any person and examine him on oath; compel the production of documents
and material objects; issue commission for examination of witness, make discovery and
inspection193 grant adjournment; and receive evidence on affidavit. 194 Further, every award
made, order issued or settlement arrived at by or before labour court or tribunal or national
tribunal shall be executed in accordance with the procedure laid down for execution of orders
and decree of a civil court under order 21 of the Code of Civil Procedure, 1908. Moreover,
the labour court or tribunal or national tribunal, as the case may be, is required to transmit
any award, order or settlement to a civil court having jurisdiction and such civil court shall
execute the award, order or settlement as if it were a decree passed by it195 •
The tribunal is required to abide by the provisions of the Indian Evidence Act in
matters relating to the proof of a document and the claim for privilege. 1% The labour court
or the industrial tribunal while adjudicating industrial dispute referred to it by appropriate
government, may summon a party other than employer and employee whose presence would
help the concerned court in adjudication of dispute finally, effectively and completely. 197
Every inquiry by a labour court, tribunal or national tribunal are judicial proceedings within
the meaning of Sections 193 and 228 of the Indian Penal Code 198 and Sections 345,346 and

193 Section 11.

194 The Industrial Dispute (Central) Rule, 1957, Rule 24.
195 Inserted by the Industrial Disputes (Amendment) Act, 2010 wef 15 September, 2010.
196 Punjab National Bank v. Vitro Pharma Products Ltd (1998} Lab. IC 444 (Bombay).
197 Petlad Turkey Red Dye Works Ltd v. Dyes & Chemical Workers Union, (1969} 1 LLJ 548 (SC}.
198 These sections deal with the Court's power to punish for contempt of Court.
3 16 • Industrial Relations and Labour Laws

348 of the Code of Criminal Procedure, 1973. 199 But the legal practitioners are allowed
to represent the parties before the adjudication authorities with the consent of the other
parties to the proceedings and with the permission of the authorities. 200 The proceedings are
normally held in public, but the labour court, tribunal or national tribunal as the case may
be can, at any stage, direct that any witness be examined or proceedings be held in camera.
These provisions reveal that the tribunal in discharging functions is very near to those of a
court, although, it is not a court in the technical sense of the word. 201

Q. Other Duties of Tribunal

In addition to the above, the labour court, tribunal and national tribunal act in a judicial
capacity in settling industrial dispute, the functions and duties of the industrial tribunal
are very much like those of a body discharging judicial functions, although it is not a
court. 202 The duty of the tribunal was best described by the Supreme Court in Hindustan
Lever Ltd v. The Management. 203 In this case, the Court held that it was the duty of the
tribunal 'not to travel beyond the pleadings and is precluded or prohibited from raising
to writ if the employer does not question the status of the workmen. It further added
that the tribunal cannot suo motu raise the issue and proceed to adjudicate upon the same
and throw out the reference on the sole ground that the concerned workman was not a
workman within the meaning of the Act. In settling the industrial dispute, 'the functions
of the tribunal are not confined to administration in accordance with law. It can confer
rights and privileges on either parties which it considers reasonable and proper though
they may not be within the terms of existing agreement. It is not merely to interpret to
give effect to contractual rights or obligations of the parties but it can create new rights
or obligations between them which it considers essential for them for keeping industrial
peace.'204

R. Filling of Vacancies
Section 8 authorizes the appropriate governmentto fill vacancies when the presiding officers of
labour courts and industrial tribunals cease to be available. If for any reason, a vacancy occurs,
it is open to the governmentto fill the same whether the vacancy is permanent or temporary. 205
In case of a national industrial tribunal, only the Central Government is empowered to fill
the vacancy by appointing any person in accordance with the provisions of the Act. The high
court cannot examine whether the services of a tribunal have ceased to be available. It is for
the appropriate government to say so.206 Section 8 does not apply to such tribunals which are
constituted for a limited period and whose proceedings could not be continued by the new
tribunal from the stage at which the same was left by the previous tribunal. 207

199 The Industrial Disputes Act, 1947, Section 36 (4).

200 Toe Industrial Disputes (Central) Rules, 1957, Rule 30.
201 Bharat Bank v. Employees of Bharat Bank, (1950) LLJ 921 (SC).
202 Bharat Bank v. The Employees of Bharat Bank, (1950) LLJ 921.
203 (1984} 2 LLJ 388.
204 Ibid.
205 United Commercial Bank Ltd v. Their Workmen, (1951) 1 LLJ 621.
206 Union of Workmen v. R SN Co., AIR 1951 Assam. 96; (1956) 1 LLJ 49.
207 (1956) 1 LLJ 49.
 Settlement of Industrial Disputes • 3 17

S. Response of the National Commission on Labour

The [First] National Commission on Labour set up by the Government of India in 1966
found the working of the industrial relations machinery under the Industrial Disputes Act,
1947 unsatisfactory. It, therefore, emphasized the need for 'a formal arrangement which is
independent in character, expeditious in its functioning and which is equipped to build up
the necessary expertise.'208 The Commission, therefore, recommended: (i) the setting up of a
National Industrial Relations Commission by the Central Government to deal with disputes
which involve questions of national importance or which are likely to affect establishments
situated in more than one state. (ii) The setting up of an Industrial Relations Commission at
the state level for settlement of disputes for which the state government is the appropriate
government. (iii) The proposed national and state industrial relations commissions would
be presided over by a person having prescribed judicial qualifications and experience
appointed by the Union and state government respectively in consultation with the Chief
Justice of India or Chief Justice of the high court concerned as the case may be, and the
Union Public Service Commission or the State Public Service Commission as the case may
be. The Commission shall also constitute two non-judicial members, who will be officers in
the field of industry, labour or management. The main functions of the proposed machinery
are three-fold: (i) adjudication of industrial disputes; (ii) conciliation; and (iii) certification
of unions as representative unions. However, no step has yet been taken to implement
these recommendations. This line of approach was also reiterated by the Second National
Commission on Labour with some modification.

T. Court Fee
The [Second] National Commission on Labour has recommended levy of a token court fee
in respect of all matters coming up before labour courts and labour relations commissions.

U. Representation of Parties
Section 36 of the Industrial Disputes Act deals with the representation of a party to a dispute.
Under sub-section 1 of Section 36, a workman who is a party to a dispute shall be entitled
to be represented in any proceeding under the Act by (a) any member of the executive or
other office-bearers of a registered trade union of which he is a member; or (b) any member
of the executive or other office-bearers of a federation of trade unions to which the trade
union referred to in clause (a) is affiliated; (c) where the worker is not a member of any trade
union, by any member of the executive or other office bearers of any trade union connected
with, or by any other workmen employed in the industry in which the worker is employed
and authorized in the prescribed manner.
Similarly, under Section 36(2), an employer who is a party to a dispute shall be entitled
to be represented in any proceeding under this Act by (a) an officer of an association of
employers of which he is a member; (b) an officer of a federation of associations of employers
to which the association referred to in clause (a) is affiliated; (c) where the employer is not
a member of any association of employers, by an officer of any association of employers
connected with, or by any other employer engaged in the industry in which the employer
is engaged and authorized in such manner as may be prescribed.

208 Govemment oflndia, Report of the National Commission on Labour, (1969) 332.
3 18 • Industrial Relations and Labour Laws

Section 36 (3), however, imposes a total ban on representation of a party to the dispute
by a legal practitioner in any conciliation proceeding or in any proceedings before a court
of inquiry.
Section 36 (4) permits a party to dispute to be represented by a legal practitioner with
the prior consent of the other party to the proceeding and with the leave of the labour court,
tribunal or national tribunal as the case may be. Thus, a party to a dispute may be represented
by a lawyer upon fulfilment of two conditions viz. (1) consent of the other party, (2) leave
of the tribunal. These two conditions are mandatory in nature. Consent of the other party
is a requirement which cannot be given a go by. Question of any inference in regard to the
consent does not and cannot arise. The requirement is to be complied with in order to give
effect to the provisions under Section 36 (4). However, the high courts are divided on the
issue whether the consent should be express or implied. While the Calcutta High Court209
held that the consent must be express and not implied, the Kerala High Court210 held that
the consent may even be implied. Thus, in the latter case when Vakulathnama was accepted
by the Court on the first posting date and no objection was raised by the opposite party,
there was implied consent of the opposite party and leave of the Court.
In Laxmi Engineering Industries v. State of Rajas than and Others211 , the validity of section
36 of the Industrial Disputes Act, 1947 was challenged. It was contended that (z) Section
36 which provides that a lawyer cannot appear before the labour court/industrial tribunal
except with the consent of the opposite party and the leave of the labour court/industrial
tribunal was violative of Article 14 of the Constitution of India and the principles of natural
justice and (iz) Section 36 ran against Section 14(1)(b) of the Bar Council Act. The Rajasthan
High Court answered the questions in the negative.
In Prasar Bharati Broadcasting Corporation ofIndia v. Shri Suraj Pal Sharma212, the workman
had not objected earlier to the appearance of a legal practitioner on behalf of the management.
On these facts, the Delhi High Court held that since the workman had not at any time given
his consent under Section 36(4), the failure of the workman to object to the representation
of the management by the additional central government standing counsel at early stages
cannot preclude the workman from raising the objection at later stage.
In Britannia Engineering Products & Services Ltd v. Second Labour Court & Ors. 213,
the company, after receiving notices of adjudication proceedings appeared before the
labour court and filed letters of authority authorizing G S Sengupta, advocate along with
A Dasgupta, manager (personnel and administration) of the company to represent the
company. At no stage of the proceedings the workmen raised any objection disputing such
representation by the company through the said advocate. Later, the company obtained no
objections from their erstwhile advocate and filed fresh authorization in favour of DK Ghosh.
At that stage, the workmen raised an objection and refused to give consent for representation
of the company through this advocate. The labour court, accordingly, refused to accept the
authorities of representation by the present advocate of the company. Aggrieved by this
order, the company filed a writ petition before the Calcutta High Court. The court observed

209 Deepak Puri v. Fifth Industrial Tribunal, (1986} Lab. IC 132 (Calcutta).
210 Francis Gomez v. President, Thiruvanathapuram Shops and Commercial Establishments Employees' Union,
1999 LLR 166.
211 (2003} LLR 816.
212 (1999} LLR 352.
21 3(2002} 4 CHN 704.
 Settlement of Industrial Disputes • 3 19

that there was implied consent of workmen for representation of the company through its
advocate. Once consent is given, it is not open to the workmen to withdraw such consent
nor can the court or tribunal recall the lease granted to a party. Thus, at the time of change
of the lawyer, a party need not obtain fresh leave nor does it require consent to be obtained
from the other party; the choice of the legal practitioner lies with the party concerned and
it is not open to the other side to object to change of lawyer.

V. Form of Consent
The consent need not be in a particular manner or in a particular form as there is no form
prescribed either under the Act or the Rules. 214 If that be so, the consent of a party which
is the basis for the grant of leave to the other party for being represented by a lawyer in
a proceeding under the Industrial Disputes Act can be inferred from the surrounding
circumstances as also the conduct of the consenting party. Section 36(4) does not insist upon
a written consent. Consent once given, cannot be withdrawn or revoked at a later stage
because there is no provision in the Industrial Disputes Act enabling such withdrawal or
revocation. 215 To be represented in the proceeding by a lawyer would ensure to his benefit
till the proceeding is finally disposed of. 216 Thus, if sub-section (1), (2) and (3) of Section
36 foreclose the possibility of judicial discretion being exercised against granting audience
to persons mentioned in clauses (a), (b), (c) of sub-sections (1), (2) and (3), sub-section (4)
regulates the right of parties to authorize advocates to plead their cause and, thereby without
coming in conflict with the provisions of Section 30 of the Advocates Act, sought to keep
the arena of labour-management relations free from lawyers.
The scope of the aforesaid section has been delineated by the Supreme Court as well
as the high courts. In particular, four issues have arisen: (i) Can there be representation by
worker himself? (ii) Can there be representation of workman by trade unions for the purpose
of Section 36? (iii) Whether an employee's right to be represented by any office-bearer in sub-
section (1) is qualified or restricted on the ground that such an officer is a legal practitioner?
(iv) Can Indian Chamber of Commerce be entitled to appear on behalf of employer?
Issue no 1. InAmeteep Machine Tools v. Labour Court2 17, the Supreme Court decided the
first issue. The Court ruled that Section 36 does not impose any obligation upon a workman
who is a party to the dispute to be represented by someone else. He may participate in the
conciliation proceedings and if a settlement is arrived at, then it is a valid settlement and
binding on the parties even if the workmen who were parties to the dispute presumably
participated in the proceedings and were not represented by any persons mentioned in
Section 36 (1).
Issue no 2. Modella Textile Workers Union v. Union of India 218 decided the second issue,
namely, whether the trade unions have locus standi to file writ petition to challenge the
government's order refusing to make a reference to adjudication pertaining to termination
of employees. The Punjab and Haryana High Court held that not only a workman who is a

214 Deepak Puri v. Fifth Industrial Tribunal, (1986} Lab. IC 132 at 134 (Calcutta).
21slbid.
216 Calicut Co-operative MilkSupply Union v. Calicut Co-operative Milk Supply Workers' Union, (1986} Lab.
IC 1681 (Kerala).
217Ameteep Machine Tools v. Labour Court, (1980} 2 LLJ 453 (SC}.
218 Modella Textile Workers Union v. Union of India, (1980} Lab. IC 949.
320 • Industrial Relations and Labour Laws

member of a trade union but even in the absence of his membership of any trade union, a
workman is entitled to obtain assistance from any trade union connected with the industry
and observed:

Thus, the trade union or any member of its executive or other office bearer
is entitled to canvass the cause of the workman concerned for the purposes
of pursuing conciliation proceedings, issuing a demand notice and making
a demand on the government to refer a dispute to the industrial tribunal or
the labour court. If in pursuance of a demand notice, a dispute is referred to
the tribunal or the court, as the case may be, under the Act the trade union
concerned is also empowered to represent the case of the workman on whose
behalf demand notice had been issued to the government by the union before
the tribunal. In these circumstances, if a trade union has been given the power
by the legislature to represent a workman and espouse his cause before the
tribunal or the court, there is no reason to deprive such a union of the right to
challenge the order of the government declining a reference by way of writ
petition under Art. 226 of the Constitution.219
The Court added:

The power of representation of the cause of another person is intended to be

given its full scope at all stages. Thus, it cannot be held that the trade union,
the present petitioner, was not interested in the industrial dispute which is
the subject-matter of adjudication in this writ petition and was not aggrieved
by the decision of the government declining to make a reference. In view of
the wide scope of Section 36 of the Act, the trade union petitioner was widely
interested in the dispute and there is no reason or warrant to deprive it of the
locus standi to file the writ petition under Art. 226.220
From the aforesaid decision, it is evident that courts are inclined to permit the workman
himself to represent his case in any proceedings under the Industrial Disputes Act or may
be represented through trade unions (even if he is not a member of such a trade union)
even in writ proceedings.
Issue no. 3. The third issue was answered in the negative by the Supreme Court in
Paradip Port Trust v. Their Workmen. 221 Observed Justice Goswami:

If however, a legal practitioner is appointed as an officer of a company or

corporation and is in their pay (roll) and under their control and is not a
practising advocate, the fact that he was earlier a legal practitioner or has
a legal degree will not stand in the way of the company or the corporation
being represented by him. Similarly, if a legal practitioner is an officer of an
association of employers or of a federation of such association, there is nothing
in Section 36(4) to prevent him from appearing before the tribunal under the
provisions of Section 36 (2) of the Act. Again an office-bearer of the trade
union or a member of its executive even though he is a legal practitioner will

219 (1980) Lab. IC 949 at 952.

220 Ibid.
221 Paradip Port Trust v. Their Workmen, AIR 1977 SC 36.
 Settlement of Industrial Disputes • 3 21

be entitled to represent the workman before the tribunal under Section 36(1) in
the former capacity. The legal practitioner in the above two cases will appear
in the capacity of an officer of the associationin the case of an employer and
in the capacity of an office-bearer of the union, in the case of workmen and
not in the capacity of a legal practitioner.222
He added:

It must be made clear that there is no scope for inquiry by the tribunal into
the motive for appoinbnent of such legal practitioner as office-bearers of the
trade unions or as officers of the employers' association.
The Court accordingly overruled the full bench decision of the labour appellate tribunal
in Hosiery Workers' Union v. J K Hosiery Factory, Kanpur 223 and Rajasthan High Court in
Duduwala and Co. v. LT. 224 and affirmed the ruling of Calcutta High Court in Hall & Anderson
Ltd v. SK Neogi225 and Bombay High Court in K K Khadilkar v. Indian Hume Pipe Co. Ltd. 226
Quite apart from the aforesaid principles, it may be observed that neither the Industrial
Disputes Act, 1947 nor any of the rules made thereunder provide for the form or the manner
in which the consent of the other party is to be given. Any leave granted by a court or a
tribunal should ordinarily be in writing. Likewise, in ordinary cases, the consent of the other
party should also be given in writing. This does not, however, mean that implied consent
is negatived by Section 36 (4). 227
Issue no. 4. The last issue was decided in the negative by the Madras High Court
in RM Duraiswamy v. Labour Court. 228 In this case, the court held that employers can
be represented by an (i) executive or office-bearers of the trade union, (ii) association of
employers or an executive of association of employers. (iii) officers like deputy manager (law),
assistant manager (law), who are qualified law graduates. But they cannot be represented
by the Indian Chamber of Commerce.

A. Judicial Interpretation of 'Award'

Section 2 (b) of the Industrial Disputes Act, 1947, defines 'award' to mean an interim or
a final determination of any industrial dispute or any question relating to thereto by any
labour court, tribunal or national tribunal and includes an arbitration award made under
Section lOA. Thus, quantification of the back arrears and other attendant circumstances
falls within the ambit of award. 229

222 AIR 1977 SC 36 at 42.

223 Hosiery Workers' Union v. J K Hosiery Factory, Kanpur, (1952) (LAT).
224 Duduwala and Co. v. IT., AIR 1958 Raj. 20.
225 Hall & Anderson Ltd v. SK Neogi, (1954) 1 LLJ 628 (Calcutta).
226 K K Khandilkar v. Indian Hume Pipe Co., Ltd, AIR 1967 Born. 531, and Shastri v. S D Patil, (1975) 1 LLJ

458 (Bombay) was also to the same effect but was not referred to in the judgement.
227MSCO (P) Ltd v. S D Rana, (1982) 1 LLJ 431,437.
228 1998 LLR 478.
229 AM Sainalabdeen Musaliar v. District Collector, (1994) Lab. IC 57.
322 • Industrial Relations and Labour Laws

The aforesaid definition of' award' has two parts. The first part covers a determination,
final or interim, of any industrial dispute. The second part takes in determination of any
questions relating to an industrial dispute. The basic postulate common to both parts of the
definition is the existence of an industrial dispute, actual or apprehended. The'determination'
contemplated by the definition is of industrial dispute or questions relating thereto on merits.
It is to be noted further that Section 2 itself expressly makes the definition subject to 'anything
repugnant in the subject or context'.230 It, however, raises two questions: First, whether the
order in terms of compromise allowing the dispute to be withdrawn is an 'award'? Second,
what is the nature and scope of interim award? Let us turn to examine these problems.
If Orders in Terms of Compromise for Withdrawal are Awards. This problem has
been the subject matter of much controversy. The high courts are, however, divided in this
regard. While the High Court of Bombay231 is of the view that the order is not an 'award',
the High Court of Kerala232 took the opposite view by holding it to be an 'award'. The
approach of the Bombay High Court seems to be more pragmatic and it is in conformity
with the accepted notion of industrial adjudication.

B. Interim Award
1. The Issues. Interim award involves several issues: (i) What is the nature of an interim
award? (ii) What are its elements? (iii) Whether interim relief is an interim award? Let
us now discuss these questions.
2. Nature and Concept ofAward. The legislature has not defined the word 'interim' award
occurring in Section 2(b) of the Industrial Disputes Act, 1947. There are, however,
series of cases which endeavour to delineate the expression. The courts and tribunals
adopted the dictionary meaning of the term 'interim' in determining the nature of
'interim' award. For instance, in Thakur Yugal Kishor Sinha v. State of Bihar,2 33 the
High Court of Patna adopted the meaning given in the Oxford Dictionary, namely,
'a temporary or provisional arrangement, adopted in the meanwhile'. The Court
accordingly held that 'manifestly, the word 'interim' in such a context must mean
provisional or temporary arrangements made in a matter of urgency and subject to a
final adjusbnent or complete determination of the dispute, for example, a payment on
account pending final settlement of the amount as in the present case.'234
3. Elements ofInterim Award. Coming to the elements of interim award, it may be noted
that following are the essential elements: (1) The order must have been passed by the
labour court, industrial tribunal, or national tribunal and voluntary arbitrator (2) the
order passed by the labour court, tribunal, national tribunal or voluntary arbitrator
must have determined any question referred to it.
4. Interim Relief vis-a-vis Interim Award. The other question is whether the order
granting interim relief2 35 is an' award' within the meaning of Section 2 (b) of the Act.

230 see Cox & Kings (Agents) Ltd v. Their Workmen, AIR 1977 SC 1666.
231 Maharama Mills Kamgar Union v. NL Vyas, ( 1959) 2 LLJ 172 (Bombay).
232 Krishnan Kutty Nair v. Industrial Tribunal, (1957) 2 LLJ 45 (Kerala).
233 (1950) LLJ 539. This view was followed in Punjab National Bank v. AN Sen, (1952) 1 LLJ 371.
234 Thakur Yugal Kishor Sinha v. The State of Bihar, (1950) 1 LLJ 539.

235 Interim relief as the term signifies 'is in aid of the final relief ultimately to be granted and incidental
to the power to grant the final relief except in aid to the final relief which could be granted, no
interim relief can he given.'
 Settlement of Industrial Disputes • 3 2 3

This question was left open by the Supreme Court in Hotel Imperial v. Hotel
Workers' Union 236 and Delhi Cloth and General Mills v. Rameshwar Dayal. 237 The high
courts are, however, divided on this issue. While Delhi,238 Calcutta,239 Patna240
and Punjab241 High Courts held that an order granting interm relief amounted to
interim award required to be published under Section 17 and enforceable under
Section 17A, the Karnataka High Court took the opposite view and held that an
order granting interim relief is not a determination of an industrial dispute and
hence not an 'award'.

C. Forms of the Award

The award of a labour court, tribunal, national tribunal or voluntary arbitrator must be in
writing and signed by the presiding officer.242 The award which is not in accordance with
this provision is void and inoperative in view of the mandatory terms of this section.243

D. Certain Confidential Matters are not to be Included in Any Award

The labour court, tribunal, national tribunal and voluntary arbitrator are prevented from
including in their awards the contents of any information claimed by the parties to any
industrial dispute to be confidential.244

E. The Language of an Award

There is no provision in the Industrial Disputes Act, 1947, or rules framed thereunder dealing
with the language of an award. However, the Court laid down several norms regarding the
use of language in the award. They are: (1) The language used in the award should not be
inconsistent with a judicial approach. 245 (2) The language used in the award should not be

236 Hotel Imperial v. Hotel Workers' Union, (1959) 2 LLJ 544 (SC).
237 Delhi Cloth and General Mills v. Rameshwar Dayal, (1960) 2 LLJ 712 (SC).
238 Mehar Singh v. Delhi Administration, ILR (1973) 1 Delhi 732.
239 /eewan Lal (1929) Ltd v. State of West Bengal, (1975) Lab. IC 1161 (Calcutta).
240 Management of Bihar State Electricity Board v. The Workmen, (1971) 1 LLJ 389 (Patna): See also

Management of Bihar Khadi Gramodyog Sangh v. State ofBihar, (1977) Lab. IC 466 (Patna).
241 Punjab National Bank Ltd v. AV Sen, AIR 1952 Punjab, 143.
242 The Industrial Disputes Act, 1947, Section 16.
243 See Bharat Bank Ltd v. Their Workmen, (1950) LLJ 921; United Commercial Bank Ltd v. Their Workmen,

(1951) SCR 380; Lloyds Bank Ltd v. Lloyds Bank Union Staff Association, AIR 1956 SC 746.
244 The Industrial Disputes Act, 1947, Section 21.
245 See for instance, in Indian General Navigation and Railway Co. Ltd v. Their Workmen, (1960) 1 LLJ 13

(SC). Chief Justice Sinha speaking for the Court said that it was the duty of the tribunal making an
award not to indulge in language which is not characteristic of a judicial approach. In the course
of the judgement, the Supreme Court referred to the following excerpts of the award:
Curiously enough it appears that the company's joint agent at Dhurbri dabbled in politics and
meddled in internal administration of the unions. He propped up another union and backed it up
to stand as a rival union.
The Court disapproved of the above remarks of the tribunal and said that it is an instance of its
intemperate language with which the award bristles. On the facts it found that the 'tribunal' was
not .... justified in holding that the management had either meddled in the internal administration
of the unions or dabbled in politics, and had, thus been guilty of unfair labour practice.
324 • Industrial Relations and Labour Laws

'intemperate'. (3) The language of the award should be dignified. (4) Strong language should
not be used in the award 'without realizing the due significance and without considering
whether the use is justified.'246

F. Signing of an Award
Section 16 of the Industrial Disputes Act, 1947 requires that the award of a labour court,
tribunal or national tribunal shall be signed by the presiding officer. Similarly, Sub-section
4 of Section lOA requires that every arbitration award shall be signed by the arbitrator or all
the arbitrators, as the case may be. The provisions of the sections are mandatory. The award
of the labour court, tribunal, national tribunal or arbitrator shall be void and inoperative
in the absence of signature of the presiding officer/ arbitrator(s) in view of the mandatory
terms of Section 16.247

G. Submission of an Award
Section 15 enjoins the labour court, tribunal or national tribunal to hold 'its proceedings
expeditiously and as soon as practicable on conclusion thereof, submit its award to the
appropriate government.' The non-submission would render the award inoperative.248
The provisions of the Section are inadequate for several reasons: First, a perusal of various
reported decisions, however, reveals that despite the requirement of the Act to submit its
award, 'as soon as it is practicable on the conclusion' of the proceedings, the time taken by
the tribunal is quite long.249 Further, instances are not lacking where the tribunals have taken
over 3 years. 250 Second, Section 23 prohibits strikes and lockouts during the pendency of
proceedings before an arbitrator, labour court, tribunal or national tribunals and 2 months
after the conclusion of such proceedings. And under sub-section (3) of Section 20, proceedings
before an arbitrator under Section lOA or before a labour court, tribunal or national
tribunal 'shall be deemed to have commenced on the date of the reference of the dispute
for arbitration or adjudication, as the case may be and such proceedings shall be deemed to
have concluded on the date on which the award becomes enforceable under Section 17A'.
Since the parties cannot exercise legal strike or lockout during the pendency of proceeding
before a labour court, tribunal, national tribunal or an arbitrator (under Section lOA), the
need for the prescribed time limit within which the adjudication/ arbitration authorities
may submit their award is significant. Third, under Section 33, the management is debarred
from exercising its prerogative during the pendency of proceedings before a labour court,
tribunal, national tribunal or arbitrator (under Section lOA) where a notification has been
issued under Section 10 (3A). This provision also requires that time limit under Section 15
should be certain. Fourth, for industrial peace and harmony which is the avowed objective

246 1n Pure Drinks (Pvt.) Ltd v. Kirat Singh, (1961) 2 LLJ 99, the Supreme Court observed that the strong
language may sometimes be justified in judicial pronouncements, but using strong words without
realizing their due significance and without considering whether the use is justified is entirely out
of place in judicial pronouncements.
247Ibid.
248 See K P Singh v. SK Gokhale, (1970) 1 LLJ 125 (Madhya Pradesh).
249 1 year 2 months (see Daily Aljamiat v. Gopi Nath Aman, 1977 Lab. IC (1352); 1 year 7 months [see

Rohtas Industries Staff Unions v. State of Bihar, (1963-64) XXVI. F.J. 3961.
250 See Plantation Corporation ofKerala v. P N Krishan Pillai, (1971) 1 LLJ 116 (Kerala); Plantation Corporation

of Kerala v. Purshuthaman Nair, (1967) 1 LLL 593 (Kerala).

 Settlement of Industrial Disputes • 325

of Industrial Disputes Act, 1947, it is essential that disputes must be settled at an early date.
Under the circumstances, it is suggested that Section 15 should be amended and the time
limit should be prescribed for the submission of the award.
In Secretary, Cheruvathur Beedi Workers' Industrial Co-operative Society v. Shyamala 251 , the
Kerala High Court showed its concern regarding the inordinate delay in the adjudication
process as it affected the interest of the parties. Under Section 12(6) of the Act, the conciliation
proceedings have to be completed within a fortnight and a report has to be sent to the
government. When reference order is passed, the government is obliged to prescribe the
time limit for passing of the award. Under Section 10 (2A), when an order is passed by the
government, simultaneously, there is a direction that the award should be passed within
the specified period. In case of an individual dispute of the present nature, it is mandatory
that an award is to be passed within 3 months. Extension should be for specific reasons
and should be recorded. The delay as happened in the instant case, might never have been
conceived by the statute.

H. Publication of the Industrial Award

1. The Legal Issue. Section 17 (1) of the Industrial Dispute Act, 1947 which deals with
the publication of the award by the appropriate government provides:

....... every arbitration award and every award of labour court tribunal or
national tribunal shall, within a period of thirty days from the date of its
receipt by the appropriate government, be published in such manner as the
appropriate government thinks fit.
The aforesaid provisions raise several issues: (i) Whether the provisions of Section 17
are mandatory or directory? (ii) What will be the effect of withholding the publication of
the award? (iii) Whether the publication of the award after the expiry of statutory period
of 30 days would make the award invalid or unenforceable? (iv) Does the interim award
need to be published? (v) Whether the award will be taken to have been published on the
date of notification of the government or on the date on which such notification appeared
in the gazette? Let us examine these issues.
2. The /udicial Response. (i) Withholding the publication ofindustrial award. In Sirsilk
Ltd v. Government of Andhra Pradesh,252 the Supreme Court was faced with the problem
as to what would happen in a situation where the settlement was arrived at between the
parties to a dispute on which an award had been given by the industrial tribunal but was
not published. The Supreme Court solved this problem by directing the government to
withhold the publication of the award in view of the settlement.
The Government of Andhra Pradesh referred certain disputes between the management
of Sirsilk Ltd and its workmen to the industrial tribunal for adjudication. The industrial
tribunal gave its award and sent it to the government for publication. Before the government
published it, the parties came to a settlement on the issues. They asked the government not
to publish the award. The government asserted its inability to withhold the publication in
view of the mandatory provisions of Section 17 of the Act. Thereupon, the parties filed a
writ petition before the High Court of Andhra Pradesh, praying that the government be

251 2003 LLR 813.

252 Sirsilk Ltd v. Government of Andhra Pradesh, AIR 1964 SC 160.
326 • Industrial Relations and Labour Laws

directed not to publish the award. The High Court held that the provisions of Section 17
were mandatory and that the government could not withhold its publication. The parties
appealed to the Supreme Court. Justice Wanchoo, in the course of the judgement, observed:

Though Section 17 (1) is mandatory and the government is bound to publish the
award received by it from an industrial tribunal, the situation arising in a case like
the present is of an exceptional nature and requires reconciliation between Section
18 (1) and Section 18 (3)(d) and in such a situation, the only way to reconcile the
two provisions is to withhold the publication of the award, as a binding settlement
has already come into force in order to avoid possible conflict between a binding
settlement under Section 18 (1) and a binding award under Section 18 (3).
The Supreme Court 'accordingly' directed the government not to publish the award.
The decision is open to several objections253 • First, it ignores the scheme and statutory
provisions of the Industrial Disputes Act, 1947. Under Sub-section (3) of Section 20,
proceedings before a tribunal are deemed to commence on the date on which the appropriate
government refers the dispute for adjudication. Such proceedings are deemed to end on the
date on which the award becomes enforceable under Section 17A, i.e., usually 30 days from
the date of its publication, which the appropriate government must make. There are only two
statutory exceptions to Section 17A: (z) Where the appropriate government is party to the
dispute and is of the opinion that it will be inexpedient on public grounds affecting national
economy or social justice to give effect to the whole or any part of the award, (ii) Where
the award has been given by a national industrial tribunal and the Central Government is
of the opinion that it will be inexpedient on such or similar grounds to give effect to it. It
follows that the proceedings before the tribunal had not come to an end because no such
exceptional circumstances existed. The Supreme Court, it is submitted, failed to notice that
withholding the publication of the award would make the pendency of the proceedings to
continue ad infinitum.
Second, Section 23, prohibits the workmen from striking and the employers from
locking out during the pendency of proceedings before a labour court, tribunal or national
tribunal or an arbitrator (where a notification has been issued under sub-section 3A of
Section lOA) and 2 months after the conclusion of such proceedings. The policy behind
these prohibitions is to provide an abnosphere for smooth settlement of disputes. Their
effect can be assessed only by reference to other provisions of the Act and the rules framed
thereunder. Here also, the proceedings are deemed to have been concluded only 30 days
after the publication of the award.
The Supreme Court's decision with regards to withholding the publication of award
takes away the right of the workmen to strike and of management to lockout, because
Section 23 prohibits the management and workmen of this establishment from resorting to
the aforesaid coercive measures during the pendency of proceedings before the tribunal.
(ii) Effect ofNon-publication of the Industrial Award within the Prescribed Period. The
Supreme Court's decision in Remington Rand of India v. The Workmen,254 throws interesting
light on this question. In this case, the award was made by the industrial tribunal on

253 Fordetails of the criticism of Sirsilk Ltd v. Gavernment Andhra Pradesh, AIR 1964 SC 160; See Suresh
Chandra Srivastava, 'Implication of Withholding the Publication of the Industrial Award.' 2 Banaras
Law Journal, (1966), 201.
254 Remington Rand of India v. The Workmen, (1967) 2 LLJ 866 (SC).
 Settlement of Industrial Disputes • 327

5 October 1966. It was received by the appropriate government on 14 October 1966. But it
was published in the Kerala Gazette on 15 November 1966. On these facts, the appeal was
preferred against the award of industrial tribunal. The appellant raised an objection, inter
alia, that the award was inoperative and unenforceable as it was published after the expiry
of the period fixed by Section 17 (1) of the Industrial Disputes Act, 1947. The Supreme Court,
it appears, in an attempt to justify the delay in the publication of the award overruled the
objection. Speaking for the Court, Justice Mitter observed:

Section 17(1) makes it obligatory on the government to publish the award.

The limit of time has been fixed as showing that the publication of the award
ought not to be held up. But the fixation of the period of 30 days mentioned
therein does not mean that the publication beyond that time will render the
award invalid .....255
The Court accordingly held that the provision as to the time limit in Section 17(1) was
merely directory and not mandatory.
The decision is open to several objections.256 First, the provision of Sections 13(5), 14,
15, 17, 18, 19 and 29 of the Industrial Disputes Act, 1947 emphasize that the 'time is the
essence of the Act and the requirement of its relevant provisions must punctually be obeyed
and carried out if the Act is to operate harmoniously at all'. 257 Under the circumstances,
if one holds the provision of Section 17(1) to be directory, as the Supreme Court did, the
entire scheme of the Act would be thrown out of gear. Second, the decision of holding
the publication of the award to be directory under Section 17 (1) extends the period of
applicability of Section 33 of the Act which is unwarranted. Third, the decision affects the
bargaining power of the workers.
By holding the provisions of Section 17 (1) to be directory, the Supreme Court not only
extended indefinitely the period of prohibition of strikes and lockouts but also exposed the
parties to the risk of prosecution under Section 26. Thus, in effect, the decision might create
hardship upon workers (and employers) 'for no fault of their own but simply because of the
callous indifference or utter inefficiency and slackness'258 on the part of the government. It is,
therefore, desirable that the report of the board, labour court, tribunal or national industrial
tribunal must be published within the period prescribed under Section 17 (1) of the Act.
(iii) Publication of Interim Award. There is no provision in the Industrial Disputes
Act, 1947, dealing specifically with the publication of an interim award. As already stated,
Section 17 deals with the publication of the award and since the award has been defined
to include an interim determination of any industrial dispute or a question relating thereto
by the tribunal, the question arises whether the interim award should be published? This
question has been the subject matter of controversy before tribunals and courts.
In Allen Berry & Co. Ltd v. Their Workmen 259, the labour appellate tribunal was called
upon to decide the question whether interim awards are required to be published under

255 Id.at 868.

256 For details of the criticism of Remington Rand of India v. The Workmen, case, see Suresh Chandra
Srivastava: 'Effect of Non-Publication of Industrial Award within the Period Prescribed under the
Industrial Disputes Act, 1947,' 10 JILi 321 (1968).
257 Workers of Industry Colliery v. Industry Colliery, (1953) 1 LLJ 190, 194 (SC).
25Blbid.
259 Allen Berry & Co. Ltd v. Their Workmen, (1951) 1 LLJ 228 (LAT).
328 • Industrial Relations and Labour Laws

the Industrial Disputes Act 1947. The labour appellate tribunal answered the question in
the negative. It rationalized:

Section 15 of the Act required the tribunal to submit its award to the appropriate
government on the conclusion of the proceedings. The word 'proceedings'
in this section, in our judgement, mean the whole proceedings that is to say,
all that had been referred to the tribunal by the appropriate government for
adjudication. It is, therefore, in our judgement not obligatory on a tribunal to
submit an interim award to the appropriate government before the final award
is made and if it chooses not to submit it before that time afortiori the question of
publication of such an award by the appropriate government does not arise. 260
It accordingly held that the interim award need not be published under Section 17.

I. Pendency of Proceedings before Arbitrators and Adjudicating Authorities

1. Commencement of Proceedings. Sub-section (3) of Section 20 of the IDA provides:

Proceedings before an arbitrator under Section lOA or before a labour court,

tribunal or national tribunal shall be deemed to have commenced on the date
of reference of the dispute for arbitration or adjudication, as the case may be ...
The meaning of the expression 'on a reference of the dispute for arbitration or
adjudication' is, however, not free from doubt.
A few of the decisions emphasized literal interpretation.261 Some of the tribunals
chose the middle course. For instance in Goenka Mica Syndicate v. Mohd. Yasin 262, the
industrial tribunal ruled that according to Section 20 of the Act, the proceedings of the
tribunal commenced when the notification was received by the tribunal263 and rejected the
management's contention that the proceedings before a tribunal should commence from
the date when it is made known to the parties.
We have not been able to locate any decision holding that the effective date of the
commencement of adjudication proceedings, for the purposes of Section 23 of the Industrial
Disputes Act, 1947, is the date of the party's knowledge of the reference. However, there
are some cases264 in relation to Section 33, where also provisions of Section 20(3), have been
interpreted and these decisions indicate that the effective date of 'reference of the dispute
for adjudication' is the date on which parties receive information of such reference.
2. Termination of Proceedings. The adjudication proceeding shall be deemed to have
concluded on the date on which the award becomes enforceable under Section 17A.265

260 Id. at 230.

261 See for instance Tobacco Manufacturing (India) Ltd, (1953) 1 LLJ 259 (LAT); Association Cement Co. Ltd
v. Their Workmen, ( 1953) 2 LLJ 369.
262 Goenka Mica Syndicate v. Mohd. Yasin, (1954) 1 LLJ 507 (IT).
263 Id. at 507--08.
264 See for instance, Gorden Woodroff Leather Manufacturing Co. Ltd Workers' Union v. Their Management,

(1949) LLJ 45 (IT); Deccan Sugar and Abkari Co. Ltd v. Their Workmen, (1951) 1 LLJ 572 (IT).
265 'Proceedings before an arbitrator under Section lOA or before a labour court, tribunal or national

tribunal shall be deemed to have commenced on the date of the reference of the dispute for arbitration
or adjudication, as the case may be, and such proceedings shall be deemed to have concluded on
the date on which the award becomes enforceable under Section 17A'
 Settlement of Industrial Disputes • 329

This provision is relevant not only for determining the legality or otherwise of strikes and
lockouts but also for determining the period of regulation of management's prerogative
under Section 33 of the Industrial Disputes Act, 1947.

J. The Period of the Operation of the Award

1. Commencement of the Period. Section 17A(4) of the Industrial Disputes Act, 1947,
provides:

Subject to the provisions of Sub-section (1) and Sub-section (3) regarding the
enforceability of an award, the award shall come into operation with effect
from such date as may be specified therein, but where no date is specified, it
shall come into operation on the date when the award becomes enforceable
under Sub-section (1), or Sub-section (3), as the case may be.
The aforesaid provisions indicate that (z) there is a difference between 'enforceability' of
an award and its 'operation'; (ii) if for any reasons an award does not become 'enforceable',
it can never come into 'operation'; and (iii) that the date on which an award comes into
'operation' may, or may not be the date on which it becomes 'enforceable'.
Awards and decisions, however, indicate alarming misconception of the true import of
sub-section (4) of Section 17 A of the Industrial Disputes Act, 1947. They use the statutorily
explained concept of the date on which an award comes into operation in a manner which
is inconsistent with the provisions of the Industrial Disputes Act, 1947.
A tribunal may direct the grant of the benefits of its award from a date:
(i) Anterior to the date on which the demand was first made 266
(ii) On which the demand was first made267
(iii) Posterior to the date on which the demand was first made but anterior to the date of
reference268
(iv) On which the reference was made269
(v) Posterior to the date of reference but anterior to the date of the submission of the
award 270
(vz) On which the award is submitted
(vii) Posterior to the date of submission of the award but anterior to the date on which it
becomes enforceable
(viii)On which the award becomes enforceable
(ix) Posterior to the date on which the award becomes enforceable

266 See Jhagrakhand Collieries (Pvt.) Ltd v. Central Government Industrial Tribunal, (1960} 2 LLJ 71 (SC}.
See also Sarva Shramik Sangh v. Indian Hume Pipe Co. Ltd, 1993 Lab. IC 870.
267 Ibid., See also Inder Singh & Sons Ltd v. Their Workmen, (1961} 2 LLJ 89 (SC}. Sarva Shramik Sangh v.

Indian Hume Pipe Co. Ltd, (1993} Lab, IC 870 (SC}.

268 See United Collieries Ltd v. Its Workmen, (1961} 2 LLJ 75 (SC}.
269 Hindustan Times Ltd v. Their Workmen, (1963} 1 LLJ 108 (SC}.
270 Raj Kamal Kalamandir (Pvt.) Ltd v. Indian Motion Picture Employees Union, (1963} 1 LLJ 318 (SC},

Wenger & Co. Ltd v. Their Workmen, (1963} 2 LLJ 403 (SC}.
330 • Industrial Relations and Labour Laws

The validity of award granting benefits from any date anterior to the date on which
award becomes enforceable has frequently been questioned in the courts of law.
In a series of cases, the Supreme Court271 has emphasized that under Section 17A (4)
the tribunal is empowered to indicate the date on which an award shall come into operation
and that date can be any one of the dates mentioned above. Where, however, a tribunal,
without specifying the date on which an award shall come into operation, directs grant of
benefits from a specific date, the Supreme Court is of the view that an award comes into
operation from the date.
2. Date of Award. The question came up for consideration of the Supreme Court in
Lloyds Bank Ltd v. Lloyds Bank Union StaffAssociation.272 In this case, the award was published
under Section 17 of the Industrial Disputes Act, 1947, by the appropriate government in a
notification of the Ministry of Labour on 17 January 1950, but the notification appeared in
the Gazette on 28 January 1950 The question, inter alia, for the consideration of the Supreme
Court was on which date the award will be taken to have been published. Answering this
question, the Supreme Court held that the award must be taken to have been published on
17 January 1950 and not on 28 January 1950.
3. The Termination of the Operation ofAward. Section 19(3) of the IDA provides that all
awards shall remain in operation for a period of one year from the date on which the award
becomes enforceable under Section 17A. The award becomes enforceable under Section 17A
on the expiry of 30 days from the date of its publication under Section 17. Under the latter
provision, the appropriate government is under an obligation to publish the award within
a period of 30 days of its receipt.
The provisions of Section 19(3) are subject to two exceptions. First, the appropriate
government is empowered to reduce the period of operation of award. Second, the
appropriate government is empowered to extend the period of operation by a period not
exceeding one year at a time. The total period of operation of an award, however, is not to
exceed 3 years. Of course, the appropriate government may also take action under Section
17A (1) (a), 17A (3) and (4) of the IDA.
The scope of the Section 19(3) on the prohibition contained in Section 23(c) was
explained by the Supreme Court in South Indian Bank Ltd v. AR Chako. 273
So long as the award remains in operation under Section 19(3), Section 23(c) stands
in the way of any strike by the workmen and lockout by the employer in respect of any
matter covered by the award. 274
When the award is in operation under Section 19(3), both Sections 23 and 29 would be
applicable. Even after expiry of the period of operation of award under Section 19 (3), the
award continues to be binding upon the parties until a period of two months has elapsed from
the date on which notice is given by any party or parties intimating its intention to terminate
the award under Section 19(6). During this period, when the award is not in operation but
is only binding on the parties, Section 29 alone will be applicable. After the period of its
operation and also after the period for which the award is binding have elapsed, Sections
23 and 29 can have no operation. However, according to the Supreme Court, even after
the expiry of the periods mentioned above, the award would continue to govern relations

271 Hindustan Times v. Their Workmen, op. cit., Wenger & Co. v. Their Workmen op. cit., 403.
272 Lloyds Bank Ltd v. Lloyds Bank Union Staff Association, AIR 1956 SC 746.
273 South India Bank Ltd v. AR Chako, (1964) 1 LLJ 19 (SC).
274 Ibid. at 22.
 Settlement of Industrial Disputes • 3 31

between the parties till it is displaced by another contract.275 It has already been stated that
the Court did not state the circumstances under which an award is displaced by another
contract and this particular concept has created other complications.

K. Enforcement of Settlement and Award

1. General. In order to ensure compliance of settlement and award, the Industrial
Disputes (Amendment) Act, 2010 specifically provides in section 11 (9) that every award
made or issued or settlement arrived at by or before a labour court or tribunal or national
tribunal shall be executed in accordance with the procedure laid down for execution of
order and decree of a civil court under Order 21 of the Code of Civil Procedure, 1908.
Further, Section 11(10) imposes an obligation upon the labour court, tribunal and national
tribunal as the case may be to transmit any award, order or settlement to a civil court having
jurisdiction and such civil court shall execute the award or settlement as if it were a decree
passed by it. The settlement arrived at through the intervention of a conciliation officer or
board of conciliation and an award are enforceable by their own force and by the coercive
machineries under the Act. It may also be enforceable by voluntary and persuasive processes.
Let us now discuss the coercive processes in some details.
2. Penal Provisions. The enforcement of the settlement and award is sought to be
ensured by imposing penal liability on those who commit a breach thereof. 276 Imprisonment
extending up to 6 months or fine or both may be awarded for the breach of a settlement or
an award. Besides, the Industrial Disputes Act, 1947 empowers the court trying the offences
(if it fines the offender) to order payment of the whole or any part of the fine realized to
the injured party as compensation. But, the Act failed to distinguish between the first and
subsequent convictions.277
Recovery of the money due from the employer. Section 33C(l) provides for another
mode of enforcement by providing the mode or recovery of the money due from an employer
where any workman is entitled to receive from the employer any money or any benefit
which is capable of being computed in terms of money and if the question arises as to the
amount of money due or as to the amount at which such benefit should be computed, then
the question may, subject to any rules that may be made under this Act, be decided by
such labour court as may be specified in this behalf by the appropriate government. Where
workmen employed under the same employer are entitled to receive from him any money
or any benefit capable of being computed in terms of money, then subject to such rules as
may be made in this behalf, a single application for the recovery of the amount due may be
made on behalf of or in respect of any number of such workmen.
In this section 'Labour Court' includes any court constituted under any law relating
to investigation and settlement of industrial disputes in force in any state.
a. Conditions-Precedent for Making an Application. The simple statement of Section 32C
(2) namely:

Where any workman is entitled to receive from the employer any money or
any benefit which is capable of being computed in terms of money.....

275 (1964)
1 LLJ 19.
276 TheIndustrial Disputes Act, 1947, Section 29.
277 Govemment of India, Indian Labour Year Book, (1965), 328.
332 • Industrial Relations and Labour Laws

has raised several issues. The key question is: what is the significance of the expression
'entitled'? First, does it imply that the right of the workman to receive benefit from the
employer has already accrued, i.e., should there be any predetermined liability of the
employer? Also, should the rightto receive benefit have necessarily accrued under settlement
or an award, or under the provisions of Chapter VA of the Act? Or can a workman put in an
application for computation of benefits to which he is otherwise entitled to, e.g., under an
award or under an agreement, or under the statutes other than the Industrial Disputes Act,
1947? Second, does the expression 'entitled' imply a pre-ascertained identity of the employer
and the workmen? Third, what is the nature of the benefit to which the workman must be
entitled in order to move an application under Section 33C (2)? Can a workman request
for computation of only non-monetary benefits or only of monetary benefits or both? Let
us turn to these questions.
b. Pre-determined liability of employer. It has been settled in a catena of cases of tribunals
and courts278 that Section 33C (2) covers cases of workmen who claim the benefit to
which the concerned workman is entitled. It has to be computed in terms of money
even though the benefit on which their claim is based has been disputed by their
employers.
c. Pre-determined identity of parties. The labour courts under Section33C (2) of the Industrial
Disputes Act, 1947 have jurisdiction to determine the nature of work done by the
concerned workmen279 and to decide the claims under Section 33 C. The benefits
provided under Section 33C (2) includes both monetary and 'other' benefits. It has
however, no jurisdiction to determine the status of the employees.
d. Amount of money due. What is meant by the expression 'amount of money due'?
The Supreme Court in NA Choudhary v. Central Inland Water Transport Corporation
Ltd280, observed that the expression raises any one or more of the following kinds of
disputes281 •
1. Whether there is any settlement or award as alleged
2. Whether any workman is entitled to receive from the employer any money at all
under any settlement or an award, etc.?
3. If so, what will be the amount?
4. Whether the amount claimed is due or not?
The Supreme Court held that if the right to get the money on the basis of settlement
or an award was not established, no amount of money could be due. If it was established,
it had to be found out, albiet, it may be by mere calculation, as to what is the amount due.
e. Time limit. Every application under proviso to Section 33C shall be made within one year
from the date on which the money becomes due to the workman from the employers.
The appropriate government is, however, authorized to condone delay, even after the
expiry of period of one year, if sufficient cause is shown by the applicant.

278 Central Bank of India Ltd v. PS Rajgapalan, (1963) 2 LLJ 89 (SC). See also Kasturi and Sons (Pvt) Ltd v.
Salivateeswran, (1958) 1 LLJ 527 (SC).
279 South Arcot Electricity Distribution Co. Ltd v. Elumalai, (1959) 1 LLJ 624 (Madras); Kairbetta Estate v.

Rajamanikam, (1960) 2 LLJ 275 (SC): Punjab National Bank v. Kharbanda, (1962) 1 LLJ 234; Central Bank
of India Ltd v. Rajagapalan ap. cit.
280 N A Choudhary v. Central Inland Water Transport Corporation Ltd, (1978) 1 LLJ 167 (SC).
281 Ibid. at 169.
 Settlement of Industrial Disputes • 3 3 3

f. Who am make an application. Under Section 33C (1) the application for the recovery of
money due may be made by:
(a) the workmen entitled to money from the employer; or,
(b) any other person authorized by him in writing in this behalf;
(c) the assignees, or heirs of the workman in case of his death.
If the appropriate government is satisfied that any money is so due, it shall issue a
certificate for that amount to the collector who shall proceed to recover the same in the same
manner as an arrear of land revenue. However, under Section 33C (2) it is not specified
as to who can make an application. It is evident from this provision that if a workman is
entitled to receive from the employer any money or any benefit which is capable of being
computed, then the labour court will entertain such an application and shall compute the
amount to which the workman is entitled.
Before the 1964-Amendment, even in Section 33C (1), there was no reference to the
heirs or assignees. Heirs and assignees were included after the amendment, but so far as
Section 33 C (2) is concerned, there is no mention as to who can make the application. The
1964-Amendment raises a question whether the widow of a workman can maintain an
application under Section 33C (2) of the Act before the labour court. This question came up
for consideration in Sitabai Naruna Pujari v. M/s. Auto Engineer. 282 In that case, the widow
of a deceased employee had filed an application before the labour court for computing the
money and the money value of the benefits which she was entitled to. Her claim was rejected
by the labour court on the ground that she was the widow of the workman and not the
workman himself and, therefore, her application was not maintainable. In an application
for writ before the Bombay High Court, the contention of the petitioner to maintain an
application under Section 33(C) (2) of the Act was upheld. It was observed that all civil
rights of every kind vested in a deceased person in all cases in that connection except those
which are not capable to surviving after his death survived to his heirs. The right to claim
benefits accrued of his heirs and, therefore, application by her or assignee of a deceased
workman was entitled to maintain an application under Sub-section (2) of Section 33 of the
Act. But Delhi High Court in Yad Ram v. B N Singh 283 took the opposite view. The Patna
High CourtinJ F B & P Works (P) Ltdv. B. Sharma284 agreed with the view expressed by the
Bombay High Court.
g. Number of applications Section 33C (5) permits any number of workmen who are
employed by the same employer to make a single application for the recovery of the
amount due on behalf of or in respect of such workmen.
h. Nature and Scope of Section 33 C (2). In Punjab Beverages v. Suresh Chand,285 Justice
Bhagwati, speaking for the Court explained the nature and scope of Section 33C (2)
in the following terms:

It is now well-settled, as a result of several decisions of this Court that a

proceeding under Section 33C (2) is a proceeding in the nature of executive
proceeding in which the labour court calculates the amount of money due to

282 SitabaiNaruna Pujari v. M/s Auto Engineer, (1972} 1 LLJ 290 (Bombay).
283 Yad Ram v. B N Singh, (1974) 2 LLJ 306 (Delhi}.
284 J F B & P Works (P) Ltd v. B Sharma, (1977) 1 LLJ 306 (Patna).
285 Punjab Beverages v. Suresh Chand, AIR 1978 SC 995.
334 • Industrial Relations and Labour Laws

a workman from his employer, or, if the workman is entitled to any benefit
which is capable of being computed in terms of money, proceeds to compute
the benefit in terms of money. But the right to the money which is sought to
be calculated or to the benefit which is sought to be computed must be an
existing one, that is to say, already adjudicated upon or provided for and
must arise in the course of and in relation to the relationship between the
industrial workman and his employer vide Chief Mining Engineer, East India
Coal Co. Ltd v. Rameshwar .286 It is not competentto the labour court exercising
jurisdiction under Section 33 C (2) to arrogate to itself the function of an
industrial tribunal and entertain claim which is not based on an existing right
but which may appropriately be made the subject-matter of an industrial
dispute in a reference under Section 10 of the Act, vide State Bank of Bikaner
v. R L Khandelwal. 287 That is why Justice Gajendragadkar pointed out in the
Central Bank of India Ltd v. P S Raja Gopalam,288 that if an employee is dismissed
or demoted and it is his case that the dismissal or demotion is wrong, it would
not be open to him to make a claim for the recovery of his salary or wages
under Section 33C(2).
In Namor Ali v. Central Inland Water Transport Corporation Ltd289, the Supreme Court
observed that where the only dispute in the proceeding under Section 33C (2) between
the management and a section of its workmen is whether those workmen are entitled
to take advantage of a settlement and the quantum or rate of extra wages to which the
application under Section 33C(2) has been made could not be rejected on ground that there
is no dispute about the money due. The provisions of Section 33C(2) do not require that
for conferring jurisdiction on labour court not only that the workmen should be entitled
to any money due but that there should be dispute about the amount of that money. The
Court added:

The expression if any question arises as to the 'amount of money due' embraces
within its ambit any one or more of the following kinds of disputes:
1. Whether there is any settlement or award as alleged?
2. Whether any workman is entitled to receive from the employer any
money at all under any settlement or an award, etc.?
3. If so, what will be the rate or quantum of such amount?
4. Whether the amount claimed is due or not?
If settlement or the award is not established, no amount of money will be due. If it is
established, then it has to be found out, albeit it may be by mere calculation, as to what is
the amount due. For finding it out, it is not necessary that there should be a dispute as to
the amount of money due also. The fourth kind of dispute ..... obviously and literally will
be covered by the phrase 'amount of money due'. A dispute as to all such questions or any
of them would attract the provisions of Section 33C(2) of the Act and make the remedy
available to the workman concerned.

286 Chief Mining Engineer, East India Coal Co. Ltd v. Rameshwar, AIR 1968 SC 218.
287 StateBank of Bikaner v. R L Khandelwal, (1968) 1 LLJ 589.
288 Central Bank of India Ltd v. PS Raja Gapalam, AIR 1964 SC 743.
289 Namor Ali v. Central Inland Water Transport Corporation Ltd, AIR 1978 SC 275.
 Settlement of Industrial Disputes • 3 35

The Court held that: it cannot be said that if there is a dispute as to any amount due,
it is to be decided by the appropriate government under Sub-section (1) of Section 33C and
not by the labour court under Sub-section (2) of Section 33C.
However, in Municipal Corporation of Delhi v. Ganesh Razak and another,290 the Supreme
Court after considering earlier decisions on the question, has laid down as under:

The ratio of these decisions clearly indicates that where the very basis of the
claim or the entitlement of the workmen to a certain benefit is disputed, there
being no earlier adjudication or recognition thereof by the employer, the dispute
relating to entitlement is not incidental to the benefit claimed and is, therefore,
clearly outside the scope of a proceeding under Section 33C(2) of the Act. The
labour court has no jurisdiction to first decide the workmen's entitlement and
then proceed to compute the benefit so adjudicated on that basis in exercise of
its power under Section 33C(2) of the Act. It is only when the entitlement has
been earlier adjudicated or recognized by the employer and thereafter for the
purpose of implementation or enforcement thereof, some ambiguity requires
interpretation; that interpretation is treated as incidental to the labour court's
power under Section 33C(2) like that of the executing court's power under
Section 33C(2) to interpret the decree for the purpose of its execution.
i. Recovery of money due from employer under Section 33(C) (2) vis-a-vis jurisdiction of the
labour court. The Supreme Court in Bombay Gas Co. v. Gopal Bhiwa291 held that the claim
under the Payment of Wages Act, 1936 may also be made under Section 33C(2).
In Athani Municipality v. Labour Court292, the Supreme Court held that the jurisdiction of
the labour court to entertain an application under Section 33C(2) was not barred by Section
20 (1) of the Minimum Wages Act, 1948 because labour court was not a court within the
meaning of the Code of Civil Procedure or Limitation Act. However, in State of Punjab v.
Labour Court2 93, the Supreme Court was invited to consider whether employees were entitled
to apply under Section 33 C(2) of the Industrial Disputes Act, 1947 for payment of gratuity?
The Court answered the question in the negative and observed:

It is apparent that the Payment of Gratuity Act enacts a complete code

containing detailed provisions covering all the essential features of a scheme
for payment of gratuity. It creates the right to payment of gratuity. It indicates
when the right will accrue, and lays down the principles for qualification of
gratuity. It provides further for recovery of the amount, and contains a special
provision that compound interest at 9 per cent per annum will be payable
against delayed payment. For the enforcement of its provisions, the Act
provides for the appoinbnent of a controlling authority, who is entrusted with
the task of administrating the Act. The fulfilment of the rights and obligations
of the parties are made his responsibility, and he has been invested with an
amplitude of power for the full discharge of that responsibility. An error
committed by him can be corrected in appeal by the appropriate government
or an appellate authority particularly constituted under the Act.

290 (1995) 1 LLJ 395 (SC).

291 Bombay Gas Co. v. Gopal Bhiwa, AIR 1964 SC 752.
292 Athani Municipality v. Labour Court, AIR 1969 SC 1335.
293 (1980) Lab. IC 1084 (SC).
336 • Industrial Relations and Labour Laws

In view of the aforesaid, the Court held that it was the intention of the Parliament
that proceedings for payment of gratuity due under the Payment of Gratuity Act must be
taken under that Act and not under any other Act. The Court accordingly held that labour
court had no jurisdiction to entertain and dispose of applications under Section 33C (2) in
respect to the payment of gratuity.
In UP State Road Transport Corporation v. Birendra BhandarP-94 : it has been stated as under:
1. The benefit which can be enforced, under Section 33C(2) is a pre-existing benefit or
one flowing from a pre-existing right.
2. In State Bank of India v. Ram Chandra Debey295, this Court held as under:

When a reference is made to an industrial tribunal to adjudicate the question

not only as to whether the termination of a workman is justified or not but
to grant appropriate relief, it would consist of examination of the question
whether the reinstatement should be with full or partial back-wages or none.
Such a question is one of fact depending upon the evidence to be produced
before the tribunal. If after the termination of the employment, the workman
is gainfully employed elsewhere, it is one of the factors to be considered in
determining whether or not reinstatement should be with full back-wages or
with continuity of employment. Such questions can be appropriately examined
only in a reference. When a reference is made under section 10 of the Act, all
incidental questions arising thereto an be determined by the tribunal and in
this particular case, a specific question has been referred to the tribunal as to
the nature of relief to be granted to the workman.
The principles enunciated in the decisions referred by either side have been summed
up as follows :
Whenever a workman is entitled to receive from his employer any money or
any benefit which is capable of being computed in terms of money and which
he is entitled to receive from his employer and is denied of such benefit, he can
approach labour court under section 33C(2) of the Act, The benefit sought to
be enforced under section 33C(2) of the Act is necessarily a pre-existing benefit
or one flowing from a pre-existing right. The difference between a pre-existing
right or benefit on one hand and the right or benefit, which is considered just and
fair on the other hand is vital. The former falls within the jurisdiction of labour
court exercising powers under section 33C(2) of the Act while the latter does not.
j. Effect of the death of workmen during the pendency of proceedings under Section 33C(2).
Courts have held that there is no statutory bar for the legal representatives to continue
action in an industrial dispute for the purposes of adjudication and also under Section
33C(2). Thus, legal representatives of a deceased worker can be allowed to continue
the proceedings under Section 33C (2) of the Act. 296

294 2006 LLR 1219 (SC).

295 2000 (87) FLR 849 (S): 2001 (1) sec 73.
296 Rathikanthamanal v. B Pankajaminal, (1988) 1 LLJ 423 (Madras); Ambabai Manjunath Amin v.
P L Majumdar, (1987) 1 LLJ 36 (Bombay); Jharia Fire Bricks & Pottery Works v. B Sharma, (1977) 2 LLJ
366 (Patna); Gwalior Rayons v. Labour Court, (1978) 2 LLJ, 188 (Kerala); Smt. Dhanalakshmi v. Reserve
Bank of India, (1999) Lab. IC 286 (Kamataka).
 Settlement of Industrial Disputes • 3 3 7

k. Who will decide the claim

In Vijaya Bank v. Shyamat Kumar Lodh. 297 The Supreme Court observed that from
a plain reading of Section 33C (2) it is evident that money due to a workman has to
be decided by such labour court 'as may be specified in this behalf by the appropriate
government.' Section 7 of the Industrial Disputes Act, 1947 inter alia confers power to the
appropriate government for constitution of one or more labour courts for the adjudication
of industrial disputes. The Court then referred to the explanation of Section 33 C(2), its
significance and objects and observed that the explanation appended to Section 33C of
the Act provides to include any court constituted under any law relating to investigation
and settlement of industrial disputes in force in any state as labour court. The underlying
object behind inserting the explanation seems to be varying qualifications prescribed
for appoinbnent of presiding officers of labour court by different state enactments. The
Parliament took note of the fact while inserting explanation that there are different kinds
of labour courts constituted under Industrial Disputes Act and state acts and a question
may arise whether a labour court constituted under various acts, Central or state could
entertain a claim made under Section 33C (2) of the Act. The court added that in view
of the explanation, aforesaid labour court shall include any court constituted under any
law relating to investigation and settlement of industrial disputes in force in any state.
Money due to an employee under Section 33C (2) is to be decided by 'labour court as
may be specified in this behalf by the appropriate government'. In view of this, the court
observed that the expression 'Labour Court' in Section 33C(2) has to be given an extended
meaning so as to include a court constituted under any law relating to investigation and
settlement of industrial disputes in force in any state. It widens the choice of appropriate
government and it can specify not only the labour courts constituted under Section 7
of the Industrial Disputes Act, 1947 but such other courts constituted under any other
law relating to investigation and settlement of industrial disputes in force in any state.

The Court added:

But this does not end the controversy. The power to adjudicate money claim
is to the labour court 'as may be specified in this behalf by the appropriate
government'. Every word used by the legislature carries meaning and
therefore effort has to be made to give meaning to each and every word
used by it. A construction brushing aside words in a statute is not a sound
principle of construction. The court avoids a construction, if reasonably
permissible on the language, which renders an expression or part of the
statute devoid of any meaning or application. Legislature never wastes its
words or says anything in vain and a construction rejecting the words of a
statute is not resorted to, excepting for compelling reasons. There does not
exist any reason, much less compelling reason to adopt a construction, which
renders the words 'as may be specified in this behalf' used in Section 33C(2)
of the Act as redundant. These words have to be given full meaning. These
words in no uncertain terms indicate that there has to be specification by
the appropriate government that a particular court shall have jurisdiction to
decide money claim under Section 33C(2) of the Act and it is that court alone
which shall have the jurisdiction. Appropriate government can specify the

297 2010 (6) SCALE 300.

3 3 8 • Industrial Relations and Labour Laws

court or courts by general or special order in its discretion. In the present case,
there is nothing on record to show that the labour court at Dibrugarh has
been specified by the appropriate government, i.e., Central Government for
adjudication of the disputes under Section 33C(2) of the Industrial Disputes
Act. This question in our opinion has squarely been answered by this Court
in the case of Treogi Nath (Supra). True it is that rendering this decision, this
Court did not consider the explanation appended to Section 33C of the Act,
as the lis pertained to period earlier to amendment but in view of what we
have said above, excepting the widening of choice pertaining to courts,
explanation does not dispense with the requirement of specification of court
by appropriate government
6. Civil Remedy under the Civil Procedure Code not Barred. The amount due under a
settlement or award can also be enforced by way of civil remedy. However, the high courts
were divided on the issue whether recourse to the remedy under Section 33C (2) would bar
the remedy available under the Civil Procedure Code. The Madras High Court took the
view that the jurisdiction of civil court was barred298 whereas Calcutta High Court was of
the view that provision of Section 33C could not be pleaded as a bar to the jurisdiction of
Civil Court.299 The alternative remedies are independent of each other. 300 But, if a remedy
is claimed under either of the two and fails on merit, an alternative claim is barred before
another authority or court. 301
7. Government's Power of Reference is not Barred by Section 33C. A remedy provided
under Section 33C (2) does not take away the right of the government to make a reference
under Section 10 if the circumstances justify such a reference to an authority mentioned in
the Act.
8. Duty of the Labour Court to Forward the Decision to the Government. Section 33C
(4) requires that after the labour court decides the question as to the amount of money due or
the rate at which the benefit should be computed to which the workman in entitled, it shall
forward its decision to the appropriate government. On receipt of the decision of the labour
court, the government shall proceed to recover the amount found due by the labour court.
On having the amount determined, the concerned workman has to make an application to
the appropriate government for the recovery of the amount due to him.

L. Finality and Enforceability of Award

Section 17A provides :
(1) An award (including an arbitration award) shall become enforceable on the expiry of
thirty days from the date of its publication under Section 17:
Provided that:
(a) if the appropriate government is of opinion, in any case where the award has been
given by a labour court or tribunal in relation to an industrial dispute to which it
is a party; or

298 C BR Ratnam & Co. v. Ekambram, (1957), 2 LLJ 206 (Madras).

299 RiversSteam Navigation Co. Ltd v. Inland Stream Navigation Workers Union, (1964) 1 LLJ 98 (Calcutta).
300 Ambica Mills Ltd v. Second Labour Court, (1967) 2 LLJ 800 (Gujarat).
301 c K Iypunny v. Madhu Sudan Mills, (1964) 1 LLJ 197 (Bombay).
 Settlement of Industrial Disputes • 339

(b) if the Central Government is of opinion, in any case where the award has been
given by a national tribunal,
that it will be inexpedient on public grounds affecting 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.
(2) Where any declaration has been made in relation to an award under the proviso to
Sub-section (1), the appropriate government or the Central Government may, within
ninety days from the date of publication of the award under Section 17, make an order
rejecting or modifying the award and shall on the first available opportunity, lay the
award together with a copy of the order before the legislature of the state, if the order
has been made by a state government, or before Parliament, if the order has been made
by the Central Government.
(3) Where any award as rejected or modified by an order made under Sub-section (2) is
laid before the legislature of a state or before Parliament, such award shall become
enforceable on the expiry of fifteen days from the date on which it is so laid and where
no order under Sub-section (2) is made in pursuance of a declaration under the proviso
to Sub-section (1), the award shall become enforceable on the expiry of the period of
ninety days referred to in sub-section (2).
(4) Subject to the provisions of sub-section (1) and sub-section (3) regarding the
enforceability of an award, the award shall come into operation with effect from such
date as may be specified therein, but where no date is so specified, it shall come into
operation on the date when the award becomes enforceable under sub-section (1) or
sub-section (3), as the case may be.
The Scope of /urisdiction of the Supreme Court under Article 136 of the Constitution
vis-a-vis Section 17(2). Article 136(1) of the Constitution provides:
Notwithstanding anything in this Chapter, the Supreme Court may, in its discretion,
grant special leave to appeal from any judgement, decree, determination, sentence or order
in any cause or matter passed or made by any court or tribunal in the territory of India.
For over 45 years, the Supreme Court has been increasingly concerned about the
question of exercise of the power but it has not succeeded in determining exactly the scope
of interference under Article 136 of the Constitution. What is, however, beyond doubt is
that no statutory provision or technical hurdles of any kind like finality of award under
Section 17(2) of the Industrial Disputes Act can stand in the way of exercise of the powers
under Article 136 of the Constitution. The power of the Supreme Court under Article 136 is
meant to safeguard and guarantee that injustice should not be 'perpetuated or perpetrated
by decisions of courts and tribunals because certain laws have made the decision of the
courts and tribunals final and conclusive'.
Application ofRes-judicata in Industrial Disputes. It has now been settled in a catena
of cases, that the application of technical rules of res-judicata is not applicable to industrial
adjudication. 302 The principle underlying this rule is that industrial adjudications are

302 Management Shahdara (Delhi) Sharanpur Light Railway Co. Ltd v. SS Railway Workers Union, AIR 1969
SC 513. See also Ashok Leyland Ltd v. State of Tamil Nadu, (2004) 3 SCC 1 and JH Yadav. v. M/s Forbes
Gokak Ltd (2005) LLR 314.
340 • Industrial Relations and Labour Laws

intended to have long-term operation and at the same time are liable to be modified by
change in the circumstances on which they are based. 303 It has, therefore, been held that
the subsequent reference and award made in circumstances different from those prevalent
in the earlier reference and award would not permit the application of the principle of
res-judicata. 304 Similarly, the claim for modification of standing orders relating to age of
superannuation was not based by acquiescence and laches. 305

M. Constitutionality of Section 17(2) and 17A

In Telugunadu Work Charged Employees v. Government of India 306,the High Court of Andhra
Pradesh was invited to consider whether the impugned provision contained in proviso to
Section 17A(l) of the Act is offensive of constitutional scheme or any of the constitutional
provisions. It was contended on behalf on the petitioner that (i) Section 17A of the Act is
ultra vires the Constitution of India as the government, which is the executive authority,
cannot annul the order of industrial tribunal or labour court and (ii) when an industrial
dispute is undertaken for adjudication, there cannot be any distinction between the
employers, be they government or private, and that all workmen have to be treated
alike and that the judgement rendered by the independent judicial body has to be given
credence and enforceability and it is mockery of the Constitution. If the executive is
permitted to sit over the judgement of a judicial body, which is a separate wing of the
Constitution and which enjoins the power of judicial review, it will frustrate the scheme
of distribution of power. Accepting the contention, the Court observed that in State of
Bihar v. D N Ganguly 307 it was held by the Supreme Court that once a reference is made
under Section 10(1) of the Act, the government becomes functus officio in so far as the
reference aspect is concerned and the industrial tribunal or labour court, as the case may
be, assumes jurisdiction to adjudicate the matter. In view of this, it is incomprehensible
as to how the government can sit in appeal over the award made by the industrial
tribunal or labour court, when it is incompetent to withdraw or cancel the reference even
at the initial stages. Further, the reference is made not only inter-party, but it is inter se
workman and also government and there is absolutely no distinction or difference made
with regard to the reference part of it. No special circumstances are made available to
the government to deny the reference merely because the government is the party. The
considerations for making reference are the same for the party in opposition, be it private
or government. Rule of law also requires that in exercise of its governmental or quasi
governmental functions, those who are equal will be treated equally. Equal treabnent
postulates rational classification. In fact, it was held in Hindustan Antibiotics v. Workmen 308
that there is no distinction between a government employee or another kind of employee
be it private sector or public sector under the Act and that no distinction can be made
between industries in public and private sectors vis-a-vis the service conditions of the
labour and that a combined reading of clauses (g), (j) and (s) of Section 2 of the Act
indicates that the Act regulates the relationship of employer and employee irrespective

303 Bum and Co. v. Their Workmen, (1957) 1 LLJ 226.

304 Agra Electric Supply Co. v. Alladin, AIR 1970 SC 5 13.
305 Guest Keen Williams P Ltd v. P J Sterling, (1959) 2 LLJ 405.
306 (1997) LLR 1067 (AP}.
307 AIR 1958 SC 1018.
308 AIR 1967 SC 948.
 Settlement of Industrial Disputes • 3 41

of the fact that the employer is the state government or not and that disputes between
the employers and employees irrespective of the character of the employer, are made the
subject-matter of industrial adjudication. The Supreme Court even went to the extent of
saying that the constitutional directive in Articles 39(d) and 43 will certainly be disobeyed
if the State attempts to make a distinction between the same class of labourers on the
ground that some of them are employed by a company financed by the government and
others by companies floated by private enterprise. But, the impugned provision, in the
instant case, makes a distinction with regard to enforcement of the awards and while
the awards rendered inter se the workmen and the private sector undertakings are made
binding and compulsorily enforceable, reserves the power to the government to annul the
award on the ground of either national economy or public interest, if the government is
a party to the dispute and suffered the award. This is clearly violative of equality clause
guaranteed under Article 14 of the Constitution of India and the impugned provision is
unconstitutional on this ground.
The second and the foremost point for consideration in as to whether the impugned
provision enabling the government to annual the award rendered by the industrial tribunal
or labour court violates the constitutional scheme or mandate in the context of violation of
rule of law and basic structure of the Constitution.
The Court then referred to the decisions of the Supreme Court is Pruthvi Cotton Mills
v. Brough Muni3° 9, G C Kanungo v. State of Orissa 310 and SR Bhagat v. State of Mysore 311 and
observed:

The judicial precedents make it amply clear and unambiguous and they are
so uniform in their pronouncements, that too authoritatively, that law should
conform to the democratic pattern envisaged by the Constitution and the power
which the Parliament exercises is not power to override the constitutional
scheme.
Our constitutional scheme provides for judicial review by constitutional authorities
like the Supreme Court and the high courts and also courts and tribunals created under
the statutes. The learned Advocate General seeks a distinction that while the judgements
rendered by the constitutional authorities like the Supreme Court and the high courts are
binding and are unimpeachable by the legislature or executive, the judgements of the courts
and tribunals which are the creatures of the statutes stand on a different footing and can
be annulled by the provisions contained in the same statutes creating the said courts or
tribunals while the ambit and extent of power of the constitutional functionaries like Supreme
Court and high courts are wide enough and all-prevading, the judgements rendered by the
courts and the tribunals, even created under the statutes to the extent of their rights and
limitations, cannot be made nugatory and redundant by any legislative or executive action
and are enforceable with the same vigour and rigour as that of the decisions rendered by
the Supreme Court and the high courts. Thus, while mode of exercise of power in the case of
constitutional judicial review and statutory judicial review may differ, there is no difference
with regard to enforceability as, the power of the said judicial review, be it constitutional
or statutory, is a basic structure of the Constitution.

309 (1969) 2 sec 283.

310 AIR 1995 SC 1655.
311 (1995) II CLR 797.
342 • Industrial Relations and Labour Laws

The Court added:

The Constitution has assigned the courts the function of determining as to

whether the laws made by the legislature are in conformity with the provisions
of the Constitution. In adjudicating the constitutional validity of the statutes,
the courts discharge an obligation which has been imposed on them by the
Constitution. The courts would be shirking their responsibility if they hesitate
to declare the provisions of a statute to be unconstitutional, even though those
provisions are found to be violative of constitutional scheme or the provisions.
The Court accordingly held that the impugned provision encroaches upon the judicial
power of the State, as it violates the basic concept of the rule of law and democratic pattern
envisaged by the Indian Constitution.
The Court accordingly struck down the impugned provision as being ultra vires the
Constitution and consequently the provision contained under Sec. 17(2) of the Act to the
extent of the words subject to the provisions of Section 17A and whole of Section 17A with
sub-sections (1) to (4) thereof are non-est under law.

N. Power to Set Aside the Ex-parte Award Beyond 30 Days

The Supreme Court in Grindlays Bankv. Central Government Industrial Tribunal 312 while dealing
with the contention that the tribunal becomes functus officio on the expiry of 30 days from the
date of publication on the award and, therefore, has no jurisdiction to set aside the ex-parte
award, held that the proceedings with regard to a reference under Section 10 of the Act are
not deemed to be concluded until the expiry of 30 days from the publication of the award
and till then, the tribunal retains jurisdiction over the dispute referred to it for adjudication
and upto that date it has been powered to entertain an application in connection with such a
dispute and that stage is not reached till the award becomes enforceable under Section 17A.
On the basis of the aforesaid decision, the High Court313 held that after expiry of 30
days from the date of publication of the award, the industrial tribunal/labour court becomes
functus officio and has thus, no jurisdiction to entertain an application filed beyond expiry
of 30 days.

0. Payment of Full Wages Pending Proceedings in Higher Courts

Experience shows that when labour court, tribunal or national tribunal directs reinstatement
of aggrieved workman, employers very often challenge such an order in the high court
and the Supreme Court. This causes great hardship to the workman concerned. In order
to discourage the dilatory tactics adopted by the employer on the grounds of preliminary
objection and technical pleas and long pendency of dispute, the Parliament inserted Section
17B by the Industrial Disputes (Amendment) Act, 1982. The objects and reasons for enacting
the Section is as follows:

312 1980 (supp) sec 420.

313 JagdambaAuto Industries v. Kamal Yadav, 45 (1991) DLT 125; Management of Delhi Develapment Authority
v. Shri Radhey Shyam Tyagi, (1996) (74) I.F.L.R; Warning Coap. Agriculture Services Society Ltd v. State
of Punjab and Others, (1987) Lab & IC 359 (P&H) and UPSRTC Kanpur v. State of UP. & Ors. (1996)
(1) LLJ 31; See also Anil Sood v. SK Sarvaria, (1997) LLR. 386; State of Rajasthan v. Panna Ram, (1999)
Lab. IC 490 (Raj.).
 Settlement of Industrial Disputes • 343

When labour courts passes awards of reinstatement, these are often contested
by employer in Supreme Court and high courts. It was found that the delay in
the implementation of the award causes hardship to the workman concerned.
It was, therefore, proposed to provide the payment of wages last drawn by the
workman concerned, under certain conditions, from the date of the award till
the case is finally decided in the Supreme Court or High Court.
Section 17B came into force w.e.f. 21 August 1984. Section 17B, which prescribes the
payment of full wages to workman pending proceeding in higher courts provides:

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.
The aforesaid stipulates that when an award of reinstatement of a workman is
challenged by the employer before the high court or the Supreme Court and the operation
of the same is stayed, the employer shall be liable to pay the workman, during the period
of pendency of such proceedings, full wages last drawn by him. It also indicates that the
same would be subject to the workman filing an affidavit to satisfy the court that he had
not been gainfully employed during the said period. The said question has been set at
rest in favour of the workmen314• Thus, there are three essential elements to Section 17B
namely: (i) the labour court must have directed reinstatement of the workman, (ii) the
employer should have preferred proceedings against such award in the high court or in the
Supreme Court, (iii) the workman should not have been employed in any establishment
during such period. 315
In Bharat Singh v. Management, New Delhi Tuberculosis Centre 316, the Supreme Court
was invited to determine the question whether a workman would be denied the benefit
of Section 17B, even if all the above three conditions are satisfied. The Supreme Court
answered the question in negative. According to the Court 'there are no words in the
section to compel the Court to hold that it cannot operate retrospectively. Before Section

314 Kaivalyadham Employees Association v. Kaivalyadham SMYM Samity, 2009 LLR 340 (SC). In this case,
the Supreme Court also held that if the amount is reduced or directed to be calculated under Section
33 C(2} of the IDA, it would frustrate the very purpose of section 178 which, as has been consistently
held by this Court, is to provide the workman with the means of sustenance for his family members
and himself during the pendency of the proceedings taken by the employer before the High Court
or the Supreme Court.
315 Bharat Singh v. Management, New Delhi Tuberculosis Centre, 1986 Lab. IC 850.
316Ibid.
344 • Industrial Relations and Labour Laws

17B was introduced, there was no bar for courts for awarding wages. Of course, the
workmen had no right to claim it. This section, recognizes such a right. To construe it in
a manner detrimental to workmen would be to defeat its object.'
In Workmen Employed under IT Shramik Sena v. MIS Raptakos Brett & Co. Ltd317, the
Supreme Court held that when an employer moves the high court against award of
reinstatement of a workman and the former is not willing to take him on duty, the last
drawn wages not less than the standard minimum wages will be payable during pendency
of the proceedings.
(a) Application of Section 17B in case of award of regularization
In M/s Bharat Cooking Coal Ltd v. Their Workmen 318 a division bench of Supreme Court,
while considering the above question with regard to application of section 17B of the Act
in a case of award of regularization, held:

Section 17B of the Act has application when the award is one for reinstatement
of a workman and the employer prefers any proceeding against such an award
in the high court or the Supreme Court. The wording of Section 17B can have
application only when the award is one for reinstatement and not in any other
case. When the words of a statute are plain and unambiguous, the court must
understand the purport of the statutory provision based on the language used
by the statute. This is the fundamental principle of interpretation and the other
aids can be resorted to only when the words of section 17B are not plain or
are ambiguous. From reading of the Section, there cannot be any doubt that it
applies to a case of reinstatement.
(b) Meaning and scope of the expression 'full wages last drawn'
Whether the expression' full wages last drawn' in Section 17B means wages drawn by
a workman at the time of termination of his employment or wages which he would have
drawn on the date of award? Prior to the Supreme Courts decision, the high courts were
divided and held that 'full wages last drawn' can mean:
(i) Wages only at the rate last drawn and not at the same rate at which the wages are
being paid to the workmen who are actually working. 319
(ii) Wages drawn on the date of termination of services plus the yearly increment and
the dearness allowance to be worked out till the date of award. 32b
(iiz)Full wages which the workman was entitled to draw in pursuance of the award
and the implementation of which is suspended during the pendency of the
proceeding. 321
The Supreme Court in Dena Bank v. Kirat Kumar T Patel 322 disapproved the extended
meaning given by some high courts on the ground that in substance, these constructions

317 2008 LLR 520 (SC}.

318 2008 (1) JCR 255 (SC).
319 Daladdi Co-operative Agriculture Service Society Ltd v. Gurcharan Singh, (1993) (5) Serv LR 719 (P&H)

and Kirtiben B Arain v. Mafatlal Apparels, (1995) (2) Guj LR 804.

320 Vishveswaraya Iron and Steel Ltd v. M Chandrappa, (1994 (84) FJR 46) (Kant).
321 Carona Sahu Co. Ltd v. AK Munakhan, (1995) (1) LLN 1014 (Mad) and P Channaiah v. Dy. Ex. Eng.

(1996) (2) Lab LJ 240) (AP).

322 AIR 1998 SC 511 : (1998) 2 LL 1 (SC).
 Settlement of Industrial Disputes • 345

read the words 'full wages last drawn' as 'full wages which would have been drawn'. It
held that such an extended meaning to the words 'full wages last drawn' does not find
support in the language of Section 17B. Nor can this extended meaning be based on the
object underlying the enacbnent of Section 17B.' The Court observed:

Section 17B has been enacted by Parliament with a view to give relief to a
workman who has been ordered to be reinstated under the award of a labour
court or industrial tribunal during the pendency of proceedings in which the
said award is under challenge before the high court or the Supreme Court. The
object underlying the provision is to relieve to a certain extent the hardship that
is caused to the workman due to delay in the implementation of the award.
The payment which is required to be made by the employer to the workman
is in the nature of subsistence allowance which would not be refundable or
recoverable from the workman even if the award is set aside by the high court
or this Court. Since the payment is of such a character, Parliament thought it
proper to limit it to the extent of the wages which were drawn by the workman
when he was in service and when his services were terminated and therefore
used the words 'full wages last drawn'. To read these words to mean wages
which would have been drawn by the workman if he had continued in service
if the order terminating his services had not been passed since it has been set
aside by the award of the labour court or industrial tribunal would result in
so enlarging the benefit as to comprehend the relief that has been granted
under the award that is under challenge. Since the amount is not refundable
or recoverable in the event of the award being set aside, it would result in the
employer being required to give effect to the award during the pendency of
the proceedings challenging the award before the high court or the Supreme
Court without his being able to recover the said amount in the event of the
award being set aside. We are unable to construe the provisions contained in
Section 17B to cast such a burden on the employer. In our opinion, therefore, the
words 'full wages last drawn' must be given their plain and material meaning
and they cannot be given the extended meaning as given by the Karnataka
High Court in Vishveswarayya Iron & Steel Ltd. (supra) or the Bombay High Court
in Carona Sahu Co. Ltd. (supra).
The Court added:

The expression 'full' only emphasizes that all the emoluments which are
included in 'wages' as defined in clause (rr) of Section 2 of the Act so as to
include the amounts referred to in sub-clauses (i) to (iv) are required to be
paid. In this context, it may also be mentioned that in Section 17B, Parliament
has also used the words 'inclusive of any maintenance allowance admissible
to him under any rule'. These words indicate that maintenance allowance that
is admissible under any rule is required to be paid irrespective of the amount
which was actually being paid as maintenance allowance to the workman. But
with regard to wages, Parliament has used the words 'full wages last drawn'
indicating that the wages that were actually paid and not the amount that
would be payable are required to be paid.
346 • Industrial Relations and Labour Laws

In Workmen Employed under IT Shramik Sena v. Mis Raptakos Brett Co. Ltd,323 the
Supreme Court held that when the management does not reinstate the workmen as
directed by the labour court and files an appeal writ petition against the workmen, the
workmen shall be paid wages @ f2,500 per month till the disposal of the writ petition.
Further, the management shall not call the workmen/ appellant for work in the company
and therefore, the workmen/ appellant shall have no obligation to join the company for
work but during the pendency of the writ petition, the management shall go on paying
wages @ f2,500 per month.
The aforesaid view was followed by the Calcutta High Court in Food Corporation ofIndia
v. Union of India 324, Madras High Court in Management of KSB Pumps Ltd v. Presiding Officer,
Labour Court325 and Gujarat High Court in Cadila Pharmaceutical Ltd v. Jyotiben Harishbhai
Pandit326• The Courts held that the benefit of Section 17B would be available to workmen
from the date of institution of writ petition till the disposal by the High Court.
(c) Benefit of last pay drawn when effective
In Uttaranchal Forest Development Corporation v. KB Singh 327, the Supreme Court held
that:
The benefit of section 17B of the industrial Disputes Act, 1947 by directing
reinstatement in service or payment of last wages drawn in lieu thereof can
be granted only in favour of such workmen who have obtained awards in
their favour from the industrial tribunal or labour court and in support of
their claims, filed affidavits. The Court directed that only such workmen in
whose favour there are awards of reinstatement and who have filed affidavits
of their not being in gainful employment shall be entitled to be granted
reinstatement or in lieu thereof paid wages last drawn by them on respective
dates of their terminations from services. Their entitlement for such wages
would be from the respective dates by filing affidavits by each of them in this
Court in compliance with section 17B of the industrial Disputes, Act. 1947.
(d) Powers of the Supreme Court and high courts to award higher amount under
Section 17B
In Dena Bank v. Kirat Kumar T Patel 328, the Supreme Court ruled that the courts are
empowered to award higher amount under Section 17B.
In Dena Bank IJ329, the Supreme Court laid down the following principles:
(i) The import of Section 17B admits of no doubt that the Parliament intended
that the workman should get the last drawn wages from the date of the
award till the challenge to the award is finally decided. Section 17B also
does not preclude the high courts or the Supreme Court under Articles 226
and 136 of the Constitution respectively from granting better benefits-

323 2008 LLR 520 (SC}.

324 2011 LLR 77.
325 2010 LLR 813.
326 2011 LLR 162.
327 (2001) 5 sec 169.
328 AIR 1998 SC 511.
329 (2001) 5 sec 169.
 Settlement of Industrial Disputes • 3 4 7

more just and equitable on the facts of the case than contemplated by that
provision. The high court or the Supreme Court may, while entertaining
the employer's challenge to the award, in its discretion, in appropriate
cases stay the operation of the award in its entirety or in regard to back
wages only or in regard to reinstatement without interfering with the
payment of back wages or on payment of wages in future irrespective of
the result of the proceedings before it, etc., and/ or impose such conditions
as to the payment of salary as on the date of the order or a part of the
back wages and its withdrawal by the workman asit may be deemed
fit in the interest of justice. The court may, depending on the facts of
the case, direct payment of full wages last drawn under Section 17B of
the Act.
(ii) Even though the amount paid by the employer under Section 17B cannot
be directed to be refunded in the event he loses the case in the writ petition,
any amount over and above the sum payable under the said provision has
to be refunded.
(e) Wages payable under Section 17B are non-recoverable
In Syndicate Bank v. General Secretary, Syndicate Bank Staff Association,330 the Supreme
Court held that the wages paid to the employee in terms of Section 17B will neither be
recovered nor adjusted by the bank.
(f) Where party agrees to receive lump sum in lieu of reinstatement
In Workmen of Hindustan Lever Ltd v. Hindustan Lever Ltd 331 , the tribunal directed
reinstatement of the workmen. The Allahabad High Court, on a writ petition filed by
management, set aside the award. Workmen were paid wages by the employer from the
date of award till it was set aside by the High Court even though they did not work. On a
special leave petition before the Supreme Court, the workmen agreed to receive lump sum
in lieu of reinstatement over and above the amount already received by them. The Supreme
Court accordingly disposed of the petition as per the terms of agreement and understanding
and directed the management to pay the agreed sum within 4 weeks.
(g) Period of payment
In Sri Varadaraja Textiles (Pvt) Ltd v. Presiding Officer, Labour Court, Coimbatore332,
the Madras High Court held that the payment continues as long as the workman is in
employment. The Court also held that reaching the age of superannuation, the workman
has lost his right to get wages last drawn under Section 17B as the workmen gets wages
only as per award of the labour court which was already deposited by the employer.
(h) No recourse under Section 33C in respect of Section 17B
In Kalvalyadham Employees Association v. Kalvalyadham SMYM Samity 333, the Supreme
Court held that invocation of Section 33C(2) of the Industrial Disputes Act, is miconceived,
having regard to the fact that section 33C(2) stands on a different footing from section 17B.
While under Section 17B, it is under the order of the high court or the Supreme Court in

330 (2000) s sec 64.

331 (1999)1 LLJ 449 (SC).
332 (1999)LLR45 (Mad.).
333 2009 LLR 340 (SC).
348 • Industrial Relations and Labour Laws

a pending proceeding that the full wages last drawn by the workman, inclusive of any
maintenance allowance admissible to him under any rule, is to be paid; Section 33C(2), on
the other hand, provides for recovery of money due from the employer or any benefit which
is capable of being computed in terms of money. The question of invocation of Section 33C(2)
arises only when there is dispute as to the quantum of the dues. The two aforesaid provisions
contemplate two different situations and in certain cases, the provisions of Section 33C(2)
may have to be resorted to in respect of an order under Section 17B, but not as a matter of
course. The necessary details required for giving effect to an order under Section 17B of
the 1947 Act are available both with the employer as also the employee and only involve a
matter of calculation for which no evidence is required to be taken.
(i) Burden of Proof
Section 17B requires a workman to file an affidavit before the high court or Supreme
Court where the employer has preferred any proceedings against the award of reinstatement
of the workmen that 'he had not been employed in any establishment' during the pendency of
such proceedings. Thus, in Viveka Nand Sethi v. Chairman J& K Bank Ltd334, the Supreme Court
held that Section 17B cannot be applied where the workman did not file an affidavit before
the Court. Once such an affidavit has been filed by the workman, he has discharged his onus.
It is then for the employer to satisfy the high court or the Supreme Court that the workmen
in fact had not been employed or he had been receiving adequate remuneration during such
period or part thereof. If the employer succeeds in satisfying the court in that behalf, the court
shall order that wages contemplated in Section 17B shall not be payable by the employer to
the workman for the period of pendency of proceedings before the court or part thereof.

P. Constitutional Remedies
1. General. Under Article 32 of the Constitution, the Supreme Court under Article 226
and the high courts in India are empowered to issue writs, orders or directions (including
writs in the nature of mandamus, quo warrants, prohibition and certiorari to any person or
authority including any government within their territories. 335 The jurisdiction under Articles
32 and 226 are concurrent and independent of each other. But whereas the power of the
Supreme Court under Article 32 is confined to the matters of enforcementof fundamental
rights, the High Court's power under Article 226 is wider inasmuch as it can issue writs not
only for enforcement of fundamental rights,336 but for any other purpose. 337 Power to issue
writ is an integral and basic feature of the Constitution and cannot be taken away through
any legislation. 338 A high court's dismissal on the merits of a petition under Article 226
operates as res judicata to barring the same or similar petition under Article 32. 339
Broadly speaking, there are two general principles with regard to the exercise of
the powers of the Supreme Court and the high courts, (i) The constitutional power of the
Supreme Court and high courts to issue writs cannot be taken away or whittled down by
any legislative device. 340 (ii) Where adequate alternative remedy is available, the high court

334 2005 LLR 641.

335 Amar Singh v. State of Rajasthan, AIR 1955 SC 504.
336 Yasin v. Town Area Committee, (1952) SCR 572.
337 Irani v. State of Madras, AIR 1961 SC 1731.
338 L. Chandra Kumar v. Union of India, (1997) Lab. IC 1098. (SC).
339 See for example, Darayo v. State of UP, AIR 1961 SC 1457.
340 Raj Krishna Bose v. Binod, AIR 1954 SC 202.
 Settlement of Industrial Disputes • 349

will, unless fundamental rights are shelved, refuse to issue the writ. 341 But, the existence
of an alternative remedy is no bar where a fundamental right is violated. 342 We shall now
briefly examine the writs which may be issued under Articles 32 and 226.
2. Writ of Certiorari. (a) Principles of interference. The issuance of a writ of certiorari
involves two general principles. One of the fundamental principles with reference to the
exercise of power is that the writ of certiorari may be issued against an inferior court or
body exercising judicial or quasi judicial functions. 343 Accordingly, the following orders
in labour matters, have been held to be quasi-judicial in nature and, therefore, subject to
writ of certiorari:
• The award of the industrial tribunal constituted under the Industrial Disputes Act,
1947.344
• The award of the voluntary arbitrator appointed under the Industrial Disputes Act
1947.345
On the other hand, the following orders in labour matter have been held to be executive
orders and, therefore, not subject to writ of certiorari.
• Order by the government referring a dispute to an industrial tribunal under the
Industrial Disputes Act. 1947.346
• Proceedings of a conciliation officer under the Industrial Disputes Act 1947.347
The other feature of a writ of certiorari is that in exercising the power, court acts in a
supervisory and not in an appellate capacity. In exercising the supervisory power, the court
does not act as an appellate tribunal. 348
• Grounds of issuance. Writs of certiorari can be issued on any one of the following
grounds against the industrial awards:
(i) Defects of jurisdiction;
• Want of jurisdiction,349
• Excess of jurisdiction,350
• Failure to exercise jurisdiction.351
(ii) Violation of the principles of natural justice;

341 State of UP v. Mohd. Nooh, AIR 1958 C 86: Gandhinagar Motor Transport Society v. Bombay State, AIR
1954 Bombay 202.
342 Kuchni v. State of Madras, AIR 1959 SC 725.
343 Kirloskar Electric Co. v. Their Workmen, AIR 1973 SC, 2119; Province of Bombay v. Khushaldas, AIR 1950

SC 222; TC Basappa v. T Nagappa, AIR 1954 SC 440; Shivaj Nathubai v. Union of India, AIR 1963 SC
606. See also Hindustan Levers Ltd v. B N Dongre, (1995) Lab IC. 113(SC}.
344 Engineering Mazdoor Sabha v. Hind Cycles, AIR (1963} SC 874.
345 Ibid; See also Gujarat Steel Tubes Ltd v. Its Mazdoor Sabha. AIR 1980 SC 1897.
346 State of Madras v. C P Sarathy, (1953) SCR 334.
347 Jaswant Sugar Mills v. Lakshmi Chand, AIR 1963 SC 677.
348 Andhra Scientific Co. v. Seshagiri Rao, AIR 1967 SC 408; Dabur v. Workmen, AIR 1968 SC 17.
349 Newspapers Ltd v. State Industrial Tribunal, AIR 1957 SC 537; CKG Sugar Mills v. All Hasan, AIR 1959

SC 230; Sindhu Hochief v. Pratap Dialdas, (1968} 2 LLJ 515. (Bombay).

350 Indian Iron & Steel Company v. Their Workmen, AIR 1958 SC 130; National Project Construction

Corporation Ltd v. Their Workmen, (1970) Lab. IC 907.

351 SM. Islan v. Suite of Bihar, AIR 1956 Patna 73; National Project Construction Corporation Ltd v. Their

Workmen, op. cit.

350 • Industrial Relations and Labour Laws

• no evidence rule,352
• against the evidence,353
• against the rules of natural justice. 354
(iii) misconduct of the arbitrators;355
(iv) error apparent on the face of the record;356
(v) misconception of law;357
(vi) finding of facts suffering from an error of law;358
(vii) if no reasonable person would come to the conclusion which the arbitrator/adjudicator
has arrived. 359
3. Writ ofMandamus. A perusal of the decided cases reveals that the writ of Mandamus
has been issued by the courts on any one of the following grounds:
• Where the fundamental rights had been infringed 360
• Where the State refused to exercise its statutory duty 361
• Where the ultra vires statutes were enforced 362
• Where the authorities failed to perform the public duty 363
• Where there was error of law or violation of rules of natural justice 364
• Where there was abuse of discretion365
4. Writ of Prohibition. An analysis of the judicial decisions reveals that the writ of
prohibition may be issued on any one of the following grounds:
• Defects of jurisdiction366

352 DC Works v. State of Saurashtra, AIR 1957 264; Parry & Co. v. Second Industrial Tribunal, AIR 1970 SC
1334; Gujarat Steel Tubes Ltd v. Its Mazdoor Sabha, (1980) 1 LLJ 137 (SC).
353 Hindustan Construction Co. v. All India Hindustan Construction Workers Union, (1974) 2 LLJ 212 (Kerala).
354 National Project Construction Corporation v. Their Workmen, op. cit., Textile Employee Association v.
Arbitrator, (1968) 1 LLJ 349 (Madras).
355Ibid.
356 Veerappa v. Raman, AIR (1952) SC 192; Rajkrishna v. Binod, AIR 1954 SC 202; Shri Ambika Mills v.
SB Bhat, AIR (1961) SC 970; Gujarat Steel Tubes v. Its Mazdoor Sabha, AIR 1980 SC 1897.
357 Gujarat Steel Tubes v. Its Mazdoor Sabha, AIR 1980 SC 1897.
35Blbid.
359Ibid.
360 See Ram Prasad v. State of Bihar, Chintamani Rao v. State of MP, AIR 1951 SC 11 8; AIR 1953 SC 215;

State of Jammu and Kashmir v. Ganga Singh, AIR 1951 SC 356.

361 See for example, Bengal Immunity Co. v. State of Bihar, (1955) 2 SCR 603; Himmat Lal v. State of MP

(1954) SCA 654; Mini Chatterjee v. PSC, AIR 1958 Calcutta 345.
362 Mhd. Yasin v. Town Area Committee, (1952) SCR 572.
363 See for example, Shanker v. Returning Officer, AIR 1952 Bombay 277; Rameshwar v. Municipal Board,

AIR 1958 Allahabad 841.

364 See for example, Balkrishna v. LT Commissioner, AIR 1954 Madras 11 18; Babulal v. Collector, AIR

(1956) M.B. 221.

365 See for example, Durga Pd. v. State of UP, (1954) SCA 204; State of Rajasthan v. Nathumal, (1954) SCA

347: Saroj Rawat v. Secy. Bar Council, AIR 1954 All 745; State of Madras v. Swadeshmitran, AIR (1958)
Cal. 227; Indumati Devi v. Bengal Court of Wards, AIR 1958 Cal. 385.
366 Brij Bhusan v. Delhi, AIR 1950 SC 129; Himmat Lal v. State of M.P., AIR 1954 SC 1403; Commissioner
v. Lakshmindra, (1954) SCR 1005: Sales Tax Officer v. Budh Prakash, (1955) 1 SCR 243.
 Settlement of Industrial Disputes • 35 1

• Violation of principle of natural justice 367

5. Power of Superintendence of the High Court under Article 227 of the Constitution.
Under Article 227, every high court has the power of superintendence over all lower courts
and tribunals within its jurisdiction. This power is wider than the powers conferred on
the high courts to control inferior courts through writs under Article 226. However, the
power under Article 227 is exercised sparingly and only in exceptional cases. The court
does not interfere unless there is any grave miscarriage of justice or flagrant violation of
law requiring interference. 368 Moreover, in exercise of the supervisory power under Article
227, the high court will not sit in appeal over the decision of any court or tribunal. It will
not review or reweigh the evidence or correct errors of law in the decision unless, there
was error in the face of record or grave miscarriage of justice or flagrant violation of law. 369
Grounds of interference. The main grounds for interference under Article 227 are as
follows:
• Defects, excess370 or want of jurisdiction371
• Failure to exercise jurisdiction372
• Violation of the principles of natural justice373
• Error of law 374
6. Provisions Relating to Appeal from the Decisions of the High Court in Labour
Matters. Another course open to the aggrieved person is to invoke the Supreme Court in
regular civil appeal from the decisions of the high courts under Articles 132 and 133. Article
132 confers jurisdiction on the Supreme Court in respect of matters 'involving a substantial
question of law as to the interpretation of the Constitution.' Under Article 133, the Supreme
Court may entertain regular civil appeals from the decisions of the high court in 'civil
proceedings' where a certificate of fitness has been granted by the high court.
7. Relief Under Article 136 of the Constitution from Industrial Awards.
• General. Apart from the provisions of writs under Articles 32 and 226, the Constitution
also provides another remedy to persons aggrieved for obtaining special leave, inter alia, in
labour matters. Under Article 136, the Supreme Court is empowered to grant special leave
to appeal from any judgement, decree, determination, sentence or order in any cause or
matter passed or made by any court or tribunal, other than those constituted by or under
any law relating to armed forces in the territory of India.
• Principles of interference. Article 136 being a special provision, the Supreme Court
evolved certain limiting principles for its use. First, the discretionary power under Article

367 See for example, Indumati Devi v. Bengal Court of Wards, AIR 1938 Cal. 384; Manak Chandy,Municipal
Council, AIR 1951 Raj. 139.
368 Ram Roop v. Vishwanath, AIR 1958 All. 256.
369 See for example, D N Banerjee v. PR Mukherji, AIR 1953 SC 58.
370 See for example, Gulab Singh v. Collector of Farukhabad, AIR 1953 All. 585; Dhian Singh v. Deputy
Secretary, AIR 1960 Punjab 41.
371 Ibid.
372 Warayam Singh v. Amar Nath, AIR 1954 SC 2 15.
373 Ahmedabad Mfg. & Calico Ptg. Co. v. Ramtahel, AIR 1972 SC 1598; Statesman Ltd v. Workmen, (1976) 1

LLJ 484 (SC).

374 Hari Vishnu Karnath v. Ahmad Ishaq, AIR 1955 SC 223.
352 • Industrial Relations and Labour Laws

136 should be exercised sparingly and in exceptional cases. 375 Second, the discretiona~ power
under Article 136 is exercisable notwithstanding (z) the finality clauses of statutes,3 6 (iz) the
statutory provisions,377 (iii) the Supreme Court rules378 or other technical hurdles, provided
the Court concludes that a person has been dealt with arbitrarily or has not been given a fair
deal. Third, even where special leave has been granted in exercise of discretionary power
under Article 136, no restriction can be imposed or applied at the time of final disposal of
the appeal. 379 Fourth, the exercise of the discretion would not be justified to give findings
on matters which have become stale. 380
• Grounds of interference. A perusal of the decisions of the Supreme Court reveals
that-the Supreme Court has exercised its discretionary power under Article 136 against
the award of the tribunals on any one of the following grounds:
• Excess, want or abuse of jurisdiction381
• Where the tribunal ostensibly fails to exercise a patent jurisdiction382
• Where a question of general public importance was involved 383
• Where there was manifest injustice or fundamental flaw in law384
• Where the problem was approached wrongly385
• Violation of any of the principles of natural justice386
• Where the court erroneously applied the well-accepted principles of jurisprudence387
• Baseless or perverse finding 388
• Cases requiring elucidation and final decisions389
• Where it has traversed beyond the terms of reference 390

375 Pritam Singh v. The State, AIR 1950 SC 169 at 171.

376 Raj Krishna v. Binod, AIR 1954 202-204, Durga Shankar v. Raguraj Singh, AIR 1954 SC 520; D.C. Cotton
Mills v. Commissioner of Income Tax, AIR 1965 SC 65. 69; Sangram Singh Eastern Railways, AIR (1958)
SC 525, 529; L.G.N. Co. v. Workmen, AIR 1960 SC 219, 224; Laliteshwar Prasad v. Bateshwar Prasad,
AIR 1966 SC 580,585.
377 Kishorilal v. Union of India, AIR 1959 SC 1362; See also, Rampa v. Bajappa, AIR 1963 SC 1833; Raruha
Singh v. Achal Singh, AIR (1961) Balkrishna v. Ramaswami, AIR (1965) SC 195.
378 See for example, Venkatramana v. State of Mysore, AIR 1965 SC 255 at 262.
379 The reasons are two-fold (i) the Court may not be in full possession of all material circumstances to

make up its mind and (ii) the order is only ex-parte. (see Bengal Chemical and Pharmaceutical Works
Ltd v. Their Employees, AIR 1959 SC 633.
380Ibid.
381 See for example, Harish Chandra v. The Colli, AIR 1957 SC 444; Punjab National Bank v. Industrial

Tribunal, (1959) SCR 220.

382 Gujarat Steel Tubes v. Its Mazdoor Sabha, AIR 1980 SC 1987.
383 Hindustan Tin Works Ltd v. Its Employees, (1958) 2 LLJ 474 (SC).
384 Shaw Wallace & Co. v. Workmen, (1978) 1 LLJ 482 (SC).
385 Model Mills v. Dharam Das, (1958) 1 LLJ 539 (SC) See also Bharat Bank v. Employees of Bharat Bank,

AIR (1950) SC 188.

386 Bengal Chemical P. Ltd v. Their Employees, AIR 1959 SC 633; Clerks Depot and Cashiers of the Calcutta
Tramways Co. Ltd v. Calcutta Tramways Co., AIR 1957 SC 387.
387 Clerk of Calcutta Tramways v. Calcutta Tramways, AIR 1957 SC 387.
388 Bengal Chemical and Pharamaceutical Works Ltd v. Their Employees, (1959) 1 LLJ 413 (SC).
389Ibid.
39°Calcutta Electric Supply Co. v. Their Workmen, AIR 1959 SC 1191.
 Settlement of Industrial Disputes • 3 5 3

• Where it has not applied its mind to the real question391

• Where the procedure adopted is against all notions of legal procedure392
• Where it ignored a material document3 93
A survey of the Supreme Court's decisions reveals that the Court has considerably
enlarged the scope of its interference under Article 136. Thus, in Bharat Bank v. Employees
of Bharat Bank394, the Court enunciated that it will interfere only in matters pertaining to
the jurisdictions and procedure of the tribunal. But, in Bengal Chemical & Pharmaceutical
Works Ltd v. Their Employees,395 the Court provided an additional ground for interference,
namely, where an important question of law requiring elucidation and final decision was
involved. 3% Again, the court interfered where the tribunal erroneously applied established
principles of jurisprudence,397 failed to apply its mind to the real question,398 approached
the problem wrongly,399 and ignored a material document. 400

Besides statutory machinery provided under the Industrial Disputes Act, 1947, several
voluntary machineries have also been set up. The most important among these are the
joint management council, code of discipline and tripartite consultative machinery. These
voluntary machineries influence to some extent both employers and workers for preservation
and maintenance of industrial relations. However, they have shown limited success for
limited purposes.

A. Joint Management Council

The need for joint management consultation was emphasized in the Government Industrial
Policy Resolution, 1956 which is as follows:

In a socialist democracy, labour is a partner in a common task of development

and should participate in it with enthusiasm .... There should be joint
consultation, and workers and technicians should, wherever possible, be
associated progressively in management. Enterprises in the public sector have
to set an example in this respect. 401
To translate the aforesaid idea into action, the Second Five-Year Plan reiterated that
'this would be achieved by providing for council of management, workers and technicians'.
The Plan accorded due importance to the joint consultation and made it obligatory upon the

391 Rohtas Industries Ltd v. Brijnandan Pandey, (1956) 2 LLJ 444 (Patna).
392 JK Iron and Steel Co. Ltd v. Mazdoor Union, AIR 1957 SC 78, 81.
393 Mahalakshmi Sugar Mills v. Their Workmen, (1961) 2 LLJ 822 (SC).
394 Bharat Bank v. Employees of Bharat Bank, AIR (1950) SC 188.
395 Bengal Chemical & Pharmaceutical Works Ltd v. Their Employees, AIR 1959 SC 633.
396Ibid.
397 Clerks of Calcutta Tramways Co. Ltd v. Calcutta Tramways Co. Ltd, AIR (1957) SC 78.
398 Rohtas Industries v. Brijnandan Pandey, AIR 1957 SO.
399 Takla Experiment Station v. Its Workmen, (1961) 2 LLJ 697,Model Mills v. Dharam Das, AIR 1958 SC 311.
400 Mahalakshmi Sugar Mills v. Their Workmen, (1961) 2 LLJ 622 (SC).
401 Government of India, Second Five-Year Plan (1956) 49.
354 • Industrial Relations and Labour Laws

managementto supply such councils with fair and correct statements of all relevantinfonnation
to enable them to function effectively. Pursuant to this, the Labour Ministry constituted a
Study Group on Workers' Participation in Management which toured Europe. It consisted
of representatives of government, labour and management. After a detailed examination,
the study group submitted its report which favoured a scheme of joint management council
to be set up in the country. This report was considered in the Indian Labour Conference in
July 1957. The conference gave its approval to the scheme of joint management council and
suggested the appoinbnent of a small tripartite sub-committee to examine the details of
the scheme and to select undertakings in which the scheme could be introduced. The sub-
committee met in August, 1957 and selected 48 units (32 in the private and 16 in the public
sector).402 The sub-committee also prepared a draft scheme of joint management council. The
scheme was tried on an experimental basis in certain establishments upto 1960. To review the
working of establishments having joint management councils, a seminar was convened on
March8 and 9, 1960. This seminar found thatjointmanagementcouncilscould not contribute
much because their exact nature and functions were not properly defined and appreciated. In
these circumstances, the seminar recommended to set up a compact body at national level to
deal with problems arising out of and connected with the working of the joint management
councils. This led to the appoinbnent of a Tripartite Committee on Labour Management
Cooperation in November, 1960, to 'give advice and guidance on all matters pertaining to
joint management councils, to collect and disseminate information relating thereto, and to
explore possibilities of extending the scheme to new units. 1403
The scheme of joint management councils was evolved on voluntary basis to promote
industrial peace and harmony between labour and management, ensure closer association
between workers and management, increase production and share the responsibilities of
management.
1. Composition of the Council. The question of composition and representation in
councils figured prominently in the seminar on labour management councils convened by
the Government of India in 1958. The seminar suggested that the councils should consist of
an equal number of representatives of labour and management. However, the total number
of members should not exceed 12. It was suggested that in an establishment having one
registered trade union, the employees' representatives in the council were to be nominated by
such union. However, where more than one registered trade union exist, the representative
to the council was to be chosen by mutual agreement among such unions. The seminar also
recommended that there should be no bar on members of supervisory and technical staff
to be chosen as workers' representative. Further, outside employees were also allowed to
represent the workers but the number of such representatives was not to exceed 25 per
cent of the total number of representatives of such workers or unions in the establishment.
The representation of employees in joint councils requires consideration of two issues.
First, the question of representation of workers is linked with the question of recognition of
trade unions. The problem of representation can be met by making statutory provisions for
recognition of trade union. Second, 'the management's representatives in the joint council are
invariably nominated by the management. In most cases, the workers' representatives are
nominated by the union.... In few cases, workers' representatives complained that management
nominated to the joint council comparatively junior officers who had often pleaded ignorance

402 Employers' Federation of India, Workers Participation in Management, (1971), 6.

403Ibid.
 Settlement of Industrial Disputes • 3 5 5

for want of instructions' .404 From this it is clear that the proper selection of representatives of
management and trade union would play a significant part in making the council a success.
2. Powers and Functions of the Council. The draft model agreement regarding
establishment of council of management prepared by sub-committee set up by the Indian
Labour Conference and approved in the seminar on labour management corporation
provided that 'the council/ councils would be consulted by the management on matters like:
(i) administration of standing orders and their amendment, when needed; (ii) retrenchment;
(iii) rationalization; and (iv) closure, reduction in or cessation of operations.'405 Clause 6 of
the agreement conferred upon the council the right to receive information, to discuss and
to give suggestions on (z) general economic situation of the concern; (ii) the state of market,
production and sales programmes; (iii) organization and general running of the undertaking;
(iv) circumstances affecting the economic position of the undertaking; (v) methods of
manufacture and work; (vz) annual balance sheet and profit and loss statement and connected
documents and explanation, (vii) long-term plans for expansion, re-employment, etc.; and
(viii) such other matters as may be agreed to. However, matters such as wages, bonus, etc.,
which formed the subject of collective bargaining were kept outside the purview of council/
councils. Further, individual grievances were also excluded from its scope.
The Model Agreement conferred administrative responsibility upon the council in
respect of (z) administration of welfare measures; (ii) superposition of safety measures; (iii)
operation of vocational training and apprenticeship schemes; (iv) preparation of schedules
of working-hours and breaks of holidays; (v) payment of rewards for valuable suggestions
received from the employees; and (vi) any other matter.
3. Working of the /oint Management Council. It has been observed elsewhere that
the sub-committee appointed by the Indian Labour Conference selected 48 units (32 in the
private and 16 in the public sector) for setting up joint management councils. But in spite
of governmental efforts, only 24 establishments could set up joint management councils
till 1960. These 24 included seven councils in public sector and remaining 17 in private
sector units. The public sector units among others included Hindustan Machine Tools Ltd,
Bangalore; Kerala State Transport Deparbnent and Hindustan Insecticides Ltd. In 1962, the
number rose to 95 (35 in public and 60 in private sector units). However, a perusal of the lists
of establishments having joint councils in public sector units, Hindustan Machine Tools Ltd
(which figured in 1959 on joint council map) did not find place in 1962. From this, one may
presume that the experiment of institution of joint management councils must have failed
over there.406 The year 1966 witnessed further increase in the number of joint management
councils which were set up in establishments. Out of these, 43 councils were set up in public
and 97 in private sector.407 Two years later, in 1968, the number of councils fell from 140 to
131; of these 46 were in public 85 in private sector.408 By the end of 1974, joint management
councils were functioning only in 80 establishments, 31 in public and 49 in the private sector.
From this it is clear that the scheme suffered a setback. Thus, a survey of the reports on

404 See Charles A Myers and Subbiah Kannappan, Industrial Relations in India, (1970), 284.
405 See clause 5.
406 The Joint Management Council introduced in Hindustan Machine Tools in 1958 soon became

extinct, after the union complained that unilateral actions were taken by management without the
consultation of workers' representative (see Statesman, 22 October, 1957).
407 Government of India, Indian Labour Journal, December, 1970.
408 K V Iyer 'The Role of workers' Participation in Management in improving Productivity,' Indian

Labour Journal, August 1965.

356 • Industrial Relations and Labour Laws

the working of joint management councils in 1965 published by the Government of India
reveals some key factors for the failure of the scheme of joint management council as under:
(i) Some managements nominate to the joint council comparatively junior officers who
often are ignorant or for want of instructions are unable to effectively participate in
the process.
(ii) Only in very few undertakings, meetings of the joint council had been held regularly
in every month.
(iii) In most cases, workers' representatives seem to care more for the enlargement of
amenities and facilities and in a few cases, the redressal of grievances, than about larger
problems such as increasing productivity, reducing absenteeism, effecting economies,
and suggesting methods for more efficient utilization of plant and equipment. In several
cases, even employer's representatives do not bring such matters on the agenda as
they are doubtful about the competence of workers to understand such problems and
much less to make any contribution towards their solution.
(iv) Although the agreements by which joint councils were set up envisaged consultation
with the council by management on a variety of subjects, occasions have been rare
when such consultations have been made, except in regard to the administration of
standing orders.
(v) Communication or sharing of information with the workers has not been adequately
developed. In most cases, the employer's attitude seems to be that it is sufficient to
give to the workers' representatives as much information as they seek, consistent with
the terms of the agreement.
(vi) The agreements by which joint councils were set up envisaged the management
transferring to the council administrative responsibility in regard to welfare
measures, safety measures, etc. But in actual practice, there is no real transfer of
administrative responsibility in these matters .... In no case has the joint council been
left the choice to determine, within the financial resources available, the priorities
regarding welfare measures to be provided or the allocation to be made in respect
of these facilities.
(vii) Only in very few cases have incentive wage or bonus schemes been adopted to enable
the workers to share the fruits of higher productivity. Most employers do not offer to
share the gains of higher productivity.
(viii)One reason for difficulties faced in the running of joint councils has been the
management's failure to implement the unanimous decisions of the joint council.
Thus, this scheme has not met with much success in its operation.

B. Code of Discipline
The need for voluntary code of discipline was felt in 1957 in order to create awareness
among the parties to industrial relations about their obligations under labour laws, as also
to create in them an attitude of willing acceptance of their responsibilities and a readiness
to discharge them. 409 It was in this context that the code of discipline found approval at the
16 th Indian Labour Conference, and was formally announced in June, 1958. The code was
ratified by the central organization of workers and employers. The code has been accepted

409 Government of India, Report of the National Commission on Labour, (1969), 346-47.
 Settlement of Industrial Disputes • 3 57

by a majority of private and public sectors. The code, primarily as a result of the persuasive
efforts of Central Implementation and Evaluation Division, has been accepted by 166 trade
unions and 180 employers affiliated to Central Workers' and Employers' Organization.
The code applies to all public sector undertakings run as companies and corporations
except in defence, railways and ports and docks. Among those, where the code of discipline
applies with certain modifications include Reserve Bank of India, State Bank of India and the
Deparbnent of Defence Production. Under the code, management and union(s) agree that:
(i) no unilateral action should be taken in connection with any industrial matter and that
disputes should be settled at appropriate level;
(ii) the existing machinery for settlement of disputes should be utilized with ubnost
expedition;
(iii) there should be no strike or lockout without notice;
(iv) they affirm their faith in democratic principles and they bind themselves to settle all
future differences, disputes and grievances by mutual negotiation, conciliation and
voluntary arbitration;
(v) neither party will have recourse to coercion, intimidation, victimization or go-slow;
(vz) they will avoid litigation, sit-down and stay-in strikes, and lockouts;
(vii) they will promote constructive cooperation between their representatives at all levels
and between workers themselves and abide by the spirit of agreements mutually
entered into;
(viii)they will establish upon a mutually agreed basis, a grievance procedure which will
ensure a speedy and full investigation leading to settlement;
(ix) they will abide by various stages in the grievance procedure and take no arbitrary
action which would bypass this procedure; and
(x) they will educate the management personnel and workers regarding their obligations
to each other.
In order to ensure better discipline in industry, the code provides for: (i) a just
recognition by employers and workers of the rights and responsibilities of either party as
defined by the laws and agreements (including bipartite and tripartite agreements arrived
at all levels from time to time) and (ii) proper and willing discharge by either party of its
obligations consequent on such recognition.
In the second set, the management agrees (i) not to increase workloads unless agreed
upon or settled otherwise; (ii) not to support or encourage any unfair labour practice;
(iii) to take prompt action for settlement of grievances, and implementation of settlements,
awards, decisions and others; (iv) to display in conspicuous places in the undertaking the
provisions of this code in local language(s); (v) to distinguish between actions justifying
immediate discharge and those where discharge must be preceded by a warning, reprimand
suspension or some other form of disciplinary action and to arrange that all such disciplinary
actions should be subject to an appeal through normal grievance procedure; (vi) to take
appropriate disciplinary action against its officers and members in cases where inquiries
reveal that they were responsible for precipitating action by workers leading to indiscipline;
(vii) to recognize the union in accordance with the prescribed criteria.
The third set imposes an obligation upon the unions;
(i) not to engage in any form of physical duress;
358 • Industrial Relations and Labour Laws

(iz) not to permit demonstrations which are not peaceful and not to permit rowdyism in
demonstrations;
(iii) that their members will not engage or cause other employees to engage in any union
activity during working hours, unless as provided for by any law, agreement or
practice;
(iv) to discourage unfair labour practices, such as, negligence of duty, careless operation,
damage of property, and insubordination;
(v) to take prompt action to implement awards, agreements, settlements and decisions;
(vz) to display in conspicuous places in the union offices, the provisions of this code in the
local language(s); and
(vii) to express disapproval and to take appropriate action against office-bearers and
members for indulging in action against the spirit of this code.
The Supreme Court in General Secretary, Rourkela Shramik Sangh v. Rourkela Mazdoor
Subha,410 held that although Section 11 of the code is headed 'implementation machinery',
it consists of two separate organizations, viz., implementation units and tripartite
implementation committees which is obvious from the language of Section 11 itself and
also from the separate constitution and functions of the two organizations. The Court ruled
that to hold that the implementation unit in the respective labour deparbnent together
with the respective tripartite committee at centre, state or local level would constitute the
implementation machinery jointly and not each of them separately would run not only
counter to the intention of the code as is manifest from the language of Section 11 and their
separate composition and functions but would also be impracticable in working. Dealing with
the composition of the implementation committees and their functions, the Court observed:

These committees consist of, at the central level, an equal nwnber of employers
and workers' representatives-four each from the central employers and
workers organizations as nominated by the organizations themselves. At the
state level, they are required to be constituted similarly and in consultation
with the central employers and workers' organizations whenever they are
affiliated in the state concerned. The committees are presided over as far as
possible by respective labour ministers and even when it is not possible for
labour ministers to preside over them, they have to associate themselves as
much as possible with the deliberations of the committees. At the local level,
the committees are similarly constituted of an equal number of representatives
of the employers and workers in the area and are presided over by an officer
of the labour deparbnent or by a prominent person in the region. In a given
case, there may be more associations than one of employers and employees,
and the committees would then consist of an unwieldy number. To expect such
a committee to carry out the work mentioned in appendix IV is unrealistic.
This is why the code itself has entrusted to the implementation units and not
to implementation committees the task of ensuring that recognition is granted
to unions by managements. At the centre, the implementation unit is kept in
charge of joint secretary and at the state level, it is in charge of a whole-time
officer of the state labour deparbnent.

410 1991 Lab. IC 1270 (SC).

 Settlement of Industrial Disputes • 359

However, the code of discipline has not been effectively implemented and it is respected
more in breach than in observance. Several reasons may be accounted for the same: (z) the
absence of a genuine desire for and limited support to, self-imposed voluntary restraints on
the part of employers' and workers' organizations, (iz) the worsening economic situation
which eroded the real wage of workers, (iii) the liability of some employers to implement
their obligations, (iv) a disarray among labour representatives due to rivalries, and (v)
conflict between the code and the law .411 In view of this, the National Commission on Labour
recommended that the part of the code which enjoins stricter observance of obligations
and responsibilities under the various labour laws may be left to the normal process of
implementation and enforcement by the labour administration machinery, some others need
to be formalized under law. These are: (a) recognition of a union as bargaining agent; (b) setting
up of a grievance machinery in an undertaking: (c) prohibition of strike/lockout without
notice; (d) penalties for unfair labour practices; and (e) provision of voluntary arbitration.
With the removal of the above provisions from the code and on giving them a legal
form, the code will have no useful function to perform.412

C. Tripartite Consultative Machinery

Tripartite consultative machinery such as Indian Labour Conference, Standing Labour
Advisory Committee and Industrial Committee also play an important role in ensuring
the representation of the various interests involved in labour matters at the national level.
Besides this, the committee on convention is also instrumental in reviewing the ratification
of ILO conventions and the application of international labour standards.
The ILC/SLC have facilitated the enacbnent of central legislation on various subjects
to be made applicable to all the states of the Indian union in order to promote uniformity in
labour legislation which was an important objective to be achieved by these tripartite bodies.

411 Govemment of India, Report of the National Commission on Labour, (1969), 356-57.
412 Id at 312.
Powers of the
Appropriate
Government 18
A. The Legislative Scheme
Section 101 of the Industrial Disputes Act, 1947, empowers the appropriate government not
only to refer the industrial dispute but also to choose the dispute settlement process. Thus,
Sub-section (1) thereof provides:
Where the appropriate government is of the opinion that any industrial dispute exists
or is apprehended, it may at any time, by order in writing-
(a) refer the dispute to a board for promoting a settlement thereof, or
(b) refer any matter appearing to be connected with or relevant to the dispute to a court
for inquiry, or
(c) refer the dispute or any matter appearing to be connected with or relevant to the
dispute, if it relates to any matter specified in the Second Schedule, to a labour court
for adjudication, or
(d) refer the dispute or any matter appearing to be connected with, or relevant to the
dispute, whether it relates to any matter specified in the Second Schedule or the Third
Schedule, to a tribunal for adjudication.
The discretion to choose the dispute settlement process, however, is not unqualified.
Under Sub-section (2) of Section 10:
Where the parties to an industrial dispute apply in the prescribed manner, whether
jointly or separately, for a reference of the dispute to a board, court, labour court, tribunal
or national tribunal, the appropriate government, if satisfied that the persons applying
represent the majority of each party, shall make the reference accordingly. And under the
second proviso to Section 10(1) (d):

1 The validity of Section 10 has been upheld by the Supreme Court in DC & G Mills v. Shambhu Nath,
AIR 1978 SC 8.
362 • Industrial Relations and Labour Laws

Where the dispute relates to a public utility service and a notice under Section
22 has been given, the appropriate government shall, unless it considers that the
notice has been frivolously or vexatiously given or that it would be inexpedient
so to do, make a reference (to a labour court or tribunal for adjudication) under
this sub-section not withstanding that any other proceedings under this Act
in respect of the dispute may have commenced.
Besides, the choice of dispute settlement process, like any other executive discretion,
is necessarily regulated by the exigencies of circumstances. 2 But where the parties to
an industrial dispute apply in the prescribed manner, whether jointly or separately, for
a reference of the dispute to a board, court, labour court or tribunal, the appropriate
government, if satisfied that the persons applying represent the majority of each party,
shall make a reference accordingly. 3 The choice of forum on the other hand, is relaxable.
Thus, the first proviso to Section lO(l)(d) specifically provides that where the dispute
relates to any matter specified in the Third Schedule and is not likely to affect more than
100 workmen, the appropriate government may, if it so thinks fit, make the reference to a
labour court under clause (c).Likewise, where the dispute in relation to which the Central
Government is the appropriate government, it shall be competent for the government to
refer the dispute to a labour court or an industrial tribunal, as the case may be, constituted
by the state government. 4
Sub-section (5) of Section 10 empowers the government to add new parties to the
dispute where a dispute concerning any establishment or establishments has been or is to
be referred to a labour court, tribunal or national tribunal, if the appropriate government
is of the opinion, whether on an application made to it in this behalf or otherwise, that the
dispute is of such a nature that any other establishment, group or class of establishments
of a similar nature is likely to be interested in, or affected, by such dispute. The appropriate
government may, at the time of making the reference or any time thereafter but before
the submission of the award, include in that reference such establishment, group or class
of establishments, whether or not at the time of such inclusion any dispute exists or is
apprehended in that establishment, group or class of establishments.
There is, however, no statutory provision empowering the appropriate government
to enlarge the subject-matter of reference, though it may, by making a new reference to
the same tribunal, achieve that objective.5 The labour court, tribunal or national tribunal
as the case may be, shall confine its adjudication to the points of dispute specified by the
appropriate government in an order or in a subsequent order referring an industrial dispute
or matters incidental thereto. 6

2 See for instance, State of Madras v. C P Sarathy, (1953) 1 LLJ 174; Radhakrishna Mills (Pollachi) Ltd v.
State of Madras, (1956) 1 LLJ 221; Harendranath Bose v. Second Industrial Tribunal, (1958) 2 LLJ, 1987;
Jagannatham v. State of Andhra Pradesh, (1958) 1 LLJ, 202; Paramount Films of India Ltd v. State of
Madras, (1959) 1 LLJ 68; and State of Madras v. KN Padmannabha Iyer, (1958) 2 MLJ 266.
3 Section 10(1) (d).
4 Section 10(2).
5 See for instance Minerva Mills Ltd v. Their Workers, (1954) 1 LLJ II 9 (SC); Straw Board Manufacturing
Co. Ltd v. State of Uttar Pradesh, (1953) 1 LLJ 186 (SC).
6 Section 10(4).
 Powers of the Appropriate Government• 363

Sub-section (3) of Section 10 empowers the appropriate government to prohibit the

continuance of any strike or lockout which may be in existence on the date of the reference.
It reads:

Where an industrial dispute has been referred to a board, labour court, tribunal
or national tribunal under this Section, the appropriate government may by
order prohibit the continuance of any strike or lockout in connection with such
dispute which may be in existence on the date of the reference.
And, thus, together with Sections 22 and 23 has provided the complete mechanism
for the regulation of instruments of economic coercion.
The Industrial Disputes (Amendment and Miscellaneous Provision) Act, 1956, granted
additional powers to the Central Government:

Where the Central Government is of opinion that an industrial dispute exists or

is apprehended and, the dispute involves any question of national importance
or is of such a nature that industrial establishments situated in more than
one state are likely to be interested in, or affected by, such dispute and that
the dispute should be adjudicated by a national tribunal, then, the Central
Government may, whether or not it is the appropriate government in relation
to that dispute, at any time, by order in writing, refer the dispute or any matter
appearing to be connected with, or relevant to, the dispute, whether it relates
to any matter specified in the Second Schedule or the Third Schedule, to a
national tribunal for adjudication.
And, lest concurrent jurisdictions create confusion. Section 10 (lA) provides:

Where any reference has been made under sub-section (lA) to a national
tribunal, then notwithstanding anything contained in this Act, no labour court
or tribunal shall have jurisdiction to adjudicate upon any matter-which is under
adjudication before the national tribunal, and accordingly.
(a) if the matter is under adjudication before the national tribunal and is pending in a
proceeding, the proceeding before the Labour Court or the Tribunal, as the case may
be, in so far as it relates to such matter, shall be deemed to have been quashed on such
reference to the national tribunal, and
(b) it shall not be lawful for the appropriate government to refer the matter under
adjudication before the national tribunal to any labour court or tribunal for adjudication
during the pendency of the proceeding in relation to such matter before the national
tribunal.
Sub-section 2A and Sub-section 8 of Section 10 has been inserted by the Industrial
Disputes (Amendment) Act, 1982 to: (z) fill the gap in the absence of any provision specifying
time limit within which the adjudicating authorities would submit their award, (iz) provide
for the continuance of proceedings on the death of either parties respectively. Thus, Section
2A provides that an order referring an industrial dispute to a labour court, tribunal or national
tribunal shall specify the period within which such labour court, tribunal or national tribunal
shall submit its award on such dispute to the appropriate government. However, (z) where
such industrial dispute is connected with an individual workman, no such period shall
exceed three months, (ii) where the parties to an industrial dispute apply in the prescribed
364 • Industrial Relations and Labour Laws

manner, whether jointly or separately, to the labour court, tribunal or national tribunal for
extension of such period or for any other reason, and the presiding officer of such labour
court, tribunal or national tribunal considers it necessary or expedient to extend such period,
he may for reasons to be recorded in writing, extend such period by such further period as
he may think fit, (iii) in computing any period specified in this sub-section, the period, if any,
for which the proceedings before the labour court, tribunal or national tribunal had been
stayed by any injunction or order of a civil court shall be excluded, (iv) no proceedings before
a labour court, tribunal or national tribunal shall lapse merely on the ground that any period
specified under this sub-section had expired without such proceedings being completed.
Likewise, in order to provide continuity to the proceedings before the adjudicating
authority, Sub-section 8 of Section 10 provides that:

No proceedings pending before a labour court, tribunal or national tribunal

in relation to an industrial dispute shall lapse merely by reason of the death
of any of the parties to the dispute being a workmen, and such labour court,
tribunal or national tribunal shall complete such proceedings and submit its
award to the appropriate government.

B. The Conditions Precedent

1. Intervening Government must be the 'Appropriate Government'. Section 2 (a) of the
Industrial Disputes Act, 1947 defines 'appropriate government' to mean:

In relation to any industrial dispute concerning any industry carried on by or

under the authority of the Central Government or by a railway company or
concerning any such controlled industry as may be specified in this behalf by the
Central Government or in relation to an industrial dispute concerning a Dock
Labour Board established under Section SA of the Dock Workers (Regulation
of Employment) Act, 1948 (9 of 1948), or the Industrial Finance Corporation
of India established under Section 3 of the Industrial Finance Corporation Act,
1948 (15 of 1948), or the Employees' State Insurance Corporation established
under Section 3 of the Employees State Insurance Act, 1948 (34 of 1948), or the
Board of Trustees constituted under Section 3A of the Coal Mines Provident
Fund and Miscellaneous Provisions Act, 1948, (46 of 1948), or the Central
Board of Trustees and the State Boards of Trustees constituted under Section
SA and Section SB, respectively of the Employees' Provident Funds and
Miscellaneous Provisions Act, 1952 (19 of 1952), or the 'Indian Airlines' and
'Air India' Corporations established under Section3 of the Air Corporation Act,
1953 (27 of 1953), or the Life Insurance Corporations of India established under
Section 3 of the Life Insurance Corporation Act, 1956 (31 of 1956), or the Oil and
Natural Gas Commission established under Section 3 of the Oil and Natural
Gas Commission Act, 1959 (43 of 1959), or the Deposit Insurance and Credit
Guarantee Corporation established under Section3 of the Deposit Insurance and
Credit Guarantee Corporation Act, 1961 (47 of 1961), or the Central Warehousing
Corporation established under Section 3 of the Warehousing Corporations Act,
1962 (58 of 1962), or the Unit Trust of India established under Section 3 of the
Unit Trust of India Act, 1963 (52 of 1963), or the Food Corporation of India
established under Section 3, or a Board of Management established for two or
 Powers of the Appropriate Government• 365

more contiguous States under Section 16 of the Food Corporations Act, 1964
(37 of 1964), or the International Airports Authority of India constituted under
Section 3 of the International Airports Authority oflndia Act, 1971 (43 of 1971),
or a regional rural bank established under Section 3 of the Regional Rural
Banks Act, 1976 (21 of 1976), or the Export Credit and Guarantee Corporation
Limited or the Industrial Reconstruction Corporation of India Limited or a
banking or an insurance company, a mine, an oilfield, a cantonment board or
a major port, any company in which not less than 51 per cent of the paid-up
share capital is held by the Central Government, or any corporation, not being a
corporation referred to in this clause, established by or under any law made by
Parliament, or the Central public sector undertaking, subsidiary companies set
up by the principal undertaking and autonomous bodies owned or controlled
by the Central Government, the Central Government and (ii) in relation to any
other industrial dispute including state public sector undertakings, subsidiary
companies set up by the principal undertaking and autonomous bodies owned
or controlled by the state government, the state government:

Provided that in case of a dispute between a contractor and the contract labour
employed through the contractor in any industrial establishment where
such dispute first arose, the appropriate government shall be the Central
Government or the state government, as the case may be, which has control
over such industrial establishment.
2. Authority of the Central Government. When the undertaking is run by an
incorporated company and not directly by the Central Government or any of its deparbnents,
then the company cannot be said to be carrying on the business under the authority of the
Central Government. In effect, the company is separate from its shareholders and the facts
that the entire share capital was contributed by the government, the shares are held by agent
of the President or the Central Government and the ministers can appoint the directors and
can give them instructions, are immaterial.7

C. Controlled Industry
The definition of the 'appropriate government' includes such controlled industries as may
be specified in this behalf by the Central Government, and therefore, unless the Central
Government is specified in this behalf, it would not be the appropriate government. 8

D. Determination of the Appropriate Government

In Workmen of Sri Ranga Vilas Motors (P) Ltdv. Sri Ranga VilasMotor (P) Ltd9, the head office
of the company was located in Krishnagiri in the state of Madras (New Tamil Nadu) and it
had a branch at Bangalore but the dispute was sponsored by the workman at Krishnagiri.
It was contended that since the dispute become an industrial dispute at Krishnagiri, the

7 Heavy Engineering Mazdoor Union v. State of Bihar, (1969) 2 LLJ 549.

8 AIR 1967 SC 1040.
9 (1970) 2 LLJ 177.
366 • Industrial Relations and Labour Laws

state of Madras and not the State of Mysore was the appropriate government. The Supreme
Court ruled:

The place where the impugned order operates on the service of a workman is
the place where the cause of action arises and the state in which the place is
situated will be the appropriate government.
Earlier it held:

There should clearly be some nexus between the dispute and the territory of
the State and not necessarily between the territory and the industry concerning
which the dispute arose. Ordinarily, if there is a separate establishment and
the workman is working in that establishment, the dispute would arise in that
establishment. Since there was a separate establishment at Bangalore where the
concerned workman and other workmen where working, the impugned order
had to operate on the workman at Bangalore and, therefore, the Government
of Mysore was the appropriate government.
India Cables Co. Ltd v. Workman 10 highlighted the issue as to which of the states has
jurisdiction to make a reference in regard to dispute arising out of closure of undertaking in
one state and transfer to the other state. In order to resolve the problem, the Supreme Court
followed the test laid down in Lalbhai Tricumlal Mills Ltd v. Vin (D.M.) 11 for determining
the appropriate government. It ruled that a court or tribunal would have jurisdiction if
the parties reside within its jurisdiction or if the subject-matter of the dispute substantially
arises within its jurisdiction.

The proper test to determine 'appropriate government' in relation to an

industrial dispute is to see where the dispute substantially arose. If a workman
is working in a separate establishment, the dispute can be taken to arise only
at the place where the establishment exists. The mere fact that the head office
exercises administrative control over the workman does not confer jurisdiction
on the government within whose territorial jurisdiction the head office was
located to make a reference under Section 10.
The Court accordingly held that the employer, by participating in the conciliation
proceeding, submitted itself to the jurisdiction of conciliation officer and therefore, he
cannot be allowed to dispute the jurisdiction of the state government to make a reference.
In Goa Sampling Employees' Association v. GS Company of India P. Ltd,12 the Supreme
Court was invited to consider whether the administration of the Union Territory of Goa,
Daman and Diu fell within the state government under Section 2 (a) (i) read with Section
10 (1). The Court answered the question in the negative and observed that under the
Government of Union Territories Act, 1963, the concept of state government was foreign
to the administration of union territory. The Court further added that Article 239 which
provides that every union territory is to be administered by the President who acts through
an administrator appointed by him, suggests that the administrator is the delegate of the

10 (1962) 1 LLJ 409(SC).

11 (1956) 1 LLJ 557, 558.
12 1985 Lab. IC. 666.
 Powers of the Appropriate Government• 367

President and his position is entirely different from that of Governor of a state. Accordingly,
the Court held the Central Government was the appropriate government.
The question concerning interpretation of the concept of' appropriate government'
defined under Section 2 (a) of the Industrial Disputes Act, 1947 came up for consideration
in Tata Memorial Hospital Workers Union v. Tata Memorial Centre 1 • A dispute arose
between the Tata Memorial Hospital Workers' Union and the management. The labour
court in Mumbai rejected the demands of the hospital's employees' union to stage
demonstrations against unfair labour practices like deduction of salary, citing that
the hospital is governed by the Union government laws, hence, the special state law,
Maharasthra Recognition of Trade Unions and Prevention of Unfair Labour Practices,
Act, 1971 (MRTU), was not applicable to it. Dismissing a Bombay High Court judgment,
the Supreme Court held that the Tata Memorial Centre was not under the control of
the Central Government and the appropriate government in this case was the state
government.
The scope of the expression' appropriate government' under the ID Act, 1947 has been
debated since long. In Heavy Engineering Mazdoor Union v. State of Bihar 14 the expression
'appropriate government' was interpreted as follows:

When the undertaking is run by an incorporated company and not directly by

the Central Government or any of its deparbnents, then the company cannot
be said to be carrying on the business under the authority of the Central
Government. In effect, the company is separated from its shareholders and
the mere fact that the entire share capital was contributed by the Central
Government and the shares are held by the President and some officers of
the Government does not make it an agent of the President or the Central
Government. The fact that the ministers can appoint the directors and can give
them instructions is immaterial.
Hindustan Aeronautics Ltd v. Workmen 15 is another case of significance. Here, a bench of
three judges of the Supreme Court was concerned with the dispute between the management
of the Barrackpore branch of the appellant government company situated in West Bengal
and its employees. The appellant had challenged the award of the industrial tribunal, West
Bengal and one of the challenges was to the competence of the government of West Bengal to
make the reference of the industrial dispute. It was contended that the Barrackpore branch
was under the direct control of the Bangalore Division of the company and since it was a
government company constituted under section 617 of the Companies Act, (the shares of
which were entirely owned by the Central Government), the reference ought to have been
made either by the Central Government or by the government of Karnataka. This Court
rejected the contention and observed:

The workers were receiving their pay packages at Barrackpore and were under
the control of the officers of the company stationed there. If there was any
disturbance of industrial peace at Barrackpore where a considerable number
of workmen were working, the appropriate government concerned in the

13 2010 (8) SCALE 78.

14 (1996) 2 LLJ 549.
15 (1975) 4 sec 679.
368 • Industrial Relations and Labour Laws

maintenance of the industrial peace was the West Bengal government. The
grievances of the workmen of Barrackpore were their own and the cause of
action in relation to the industrial dispute in question arose there. The reference,
therefore, for adjudication of such a dispute by the Governor of West Bengal
was good and valid.
It is difficult to support the line of reasoning followed by the court particularly
one which has been underlined. If this view is accepted in all establishments run by the
government, the state government should be appropriate government because the law
and order falls under the purview of state government. Further, it ignores the fact that
'labour' falls under concurrent list. Moreover, it runs counter to the object and scheme of
the Industrial Disputes Act, 1947.
The aforesaid view was reiterated in Rashtriya Mill Mazdoor Sangh, Nagpur v. Model
Mills, 16 a reference (though under the Bombay Industrial Relations Act, 1946) of the
demands of the employees for payment of bonus was challenged on the ground that
an authorized controller under the Industries (Development and Regulation) Act, 1951
had been appointed in respect of the industrial undertaking and since the undertaking
was being run by an authorized controller under the authority of a department of the
Central Government, the reference under the Bombay Industrial Relations Act, 1946
was not competent. A bench of three judges of this Court once again referred to the
interpretation given in Heavy Engineering Mazdoor Union's case and held that even though
the authorized controller was appointed by the Central Government and that he had
to work subject to the directions of the Central Government, it would not render the
industrial undertaking an agent of the Central Government and therefore, could not be
said to be an establishment engaged in an industry carried on by or under the authority
of the Central Government.
The aforesaid line of approach was reiterated in Food Corporation of India Workers
Union v. Food Corporation of India 17. Therein, a writ petition was filed by the employees
seeking the regularization of their services under the Contract Labour (Regulation and
Abolition) Act 1970. In that matter, inspite of the fact that FCI is a specified industry
under Section 2(a) (i) of the Industrial Disputes Act 1947, the Supreme Court referred
to the definition of 'appropriate government' under the CLRA Act 1970. It referred to
judgments in Heavy Engineering Mazdoor Union and Rashtriya Mill Mazdoor Sangh (supra)
with approval, and held that for the regional offices and warehouses which were situated
in various states, the state governments were the 'appropriate governments' and not
the Central Government.
The aforesaid decision by ignoring the specific inclusion of FCI in the definition of
'appropriate government' has rendered the specific inclusion a useless appendage. The
issue figured again in Air India Statutory Corporation v. United Labour Union. 18 The three
judge bench of the Supreme Court, while dealing with the issue under the Contract Labour
Regulation Abolition Act, adopted the definition of appropriate government under the
Industrial Disputes Act. The Court was concerned with the question as to whether the
Central Government was the competent appropriate government for the purposes of the

16 1984(Supp) sec 443; 1984 (49) FLR 401.

17 (1985) 2 sec 295.
18 (1997) 9 sec 377.
 Powers of the Appropriate Government• 369

notification which it had issued under that Act to abolish the contract labour system in
the establishment of the appellant. The court held that the Central Government was the
'appropriate government'.
After examining the principles laid down in R D Shetty v. International Airport
Authority of India 19 and Ajay Hasia v. Khalid Muzib Sehravardi20, the Court held that
corporations and companies controlled and held by the state governments will be
institutions of those states within the meaning of Article 12 of the Constitution. A
priori, in relation to corporations and companies held and controlled by the Central
Government, the 'appropriate government' will be the Central Government. However,
the three-judge bench of the Supreme Court held that the bench in Heavy Engineering case
narrowly construed the meaning of phrase 'appropriate government' placing reliance
on the concession and common law doctrine of 'principal and agent' which no longer
bears any relevance when it is tested on the anvil of Article 14 of the Constitution. The
Supreme Court accordingly overruled its earlier decision in Heavy Engineering case and
observed that the public law interpretation is the appropriate principle of construction
of the phrase 'appropriate government'.
In Steel Authority of India Ltd v. National Union Water Front Workers 21 , the constitution
bench of Supreme Court was invited to re-determine the scope of the expression'appropriate
government'. The following questions arose for determination:
(i) Is the Central Government the appropriate government in cases of Central Government
undertakings ?
(iz) Can an industry carried on by a company/ corporation or by or under the authority of
the Central Government fall within the meaning of 'appropriate government' under
Section 2(1) (a) CLRA Act?
(iii) Can the state government corporation/ corn pany / undertaking fall under the
authority of the Central Government if it is owned by the state government or is an
instrumentality or agency of state government?
The Court analysed the definition under Section 2(a) (as it then was) and referred to
the meaning given in Concise Oxford Dictionary and Black Law Dictionary and observed:
1. The phrase 'any industry carried on under the authority of the Central Government'
implies an industry which is carried on
(a) by virtue of,
(b) pursuant to,
(c) conferment of,
(d) grant of,
(e) delegation of power, or
(f) permission
by the Central Government to a Central Government company or other government
company /undertaking.

19 (1979) 3 sec 489.

20 (1981) 1 sec 722.
21 2001 LLR 961 (SC).
370 • Industrial Relations and Labour Laws

In other words, if there is lack of conferment of power or permission by the Central

Governmentto the government company or undertaking, it would disable such a company/
undertaking to carry on the industry in question.
2. Where the authority, to carry on an industry for or on behalf of the Central
Government is conferred on the government company or any undertaking under the statute
under which it is created, no further question arises. But if it is not so, the question is whether
there is any conferment of authority on the government company or undertaking by the
Central Government to carry on the industry in question. This is a question of fact and has
to be ascertained on the facts and circumstances of each case.
3. The Supreme Court ruled that the criterion for determining whether the Central
Government is appropriate government in government undertaking or company under
CLRA Act is that the industry must be carried only by or under the authority of the Central
Government and not that the company /undertaking is an instrumentality or an agency of
the Central Government for purpose of Article 12 of the Constitution.
It is submitted that the Supreme Court, in Steel Authority of India case by holding that
'where the authority to carry on an industry, for or on behalf of the Central Government,
if created by the statute, it would be said to be run under the authority of the Central
Government' has rendered 316 out of the 404 words used in Section 2(a) useless appendage.
Indeed, the Court misread the intention of legislature in enacting Section 2(a) and on the
whole, threw the legislative scheme out of gears.
We believe that both Air India case and Steel Authority of India case, for different
reasons, have failed to appreciate the significance of specific inclusion of 25 establishments
created under the statute in section 2(a) of the ID Act, 1947. Quite apart from this, the
Supreme Court failed to appreciate the implications of the definition of 'appropriate
government'. Thus, the Central Government is the appropriate government only in relation
to an establishment in respect of which the' appropriate government' under the ID Act, 1947
is Central Government and state government in relation to other establishment in which
that any other establishment is situated. Thus, the state government is the appropriate
government in most of the establishments of the Central Government. In view of this,
there is no uniformity in respect to the norms and procedure for enforcement of the Act.
There is also variation in regard to scope of coverage of establishment or process, which
has been brought within the purview of prohibition under Section 10. Further, an activity
may be prohibited in one state but the same activity may not be covered in other state. This
poses a problem in the enforcement of the Act. Further, there is variation not only amongst
states but also between state and centre in regards to the prohibition and exemptions. All
these have created hurdles in the enforcement of the Act22 •
The aforesaid principle was applied in M/s Delhi International Airport Pvt. Ltd v. Union
of India. 23 Here, 136 workers were employed by the contractor M/s TDI International Pvt.
Ltd to do the work of trolley retrieving at the domestic and international airport, Delhi in
the year 1992. In view of the perennial nature of the work, the workmen approached the
labour court for abolition of contract labour system and for their absorption as its regular

22 See S C Srivastava, Impact of the Supreme Court decision on Contract Labour (Steel Authority of
India Ltd v. National Union Water Front), 43 JIL 1 (2001).
23 2011 (10) SCALE 478.
 Powers of the Appropriate Government • 3 7 1

eemployees.24 On 26 July 2004, the Central Government accepted the recommendations of

the Contract Labour Board and issued a notification abolishing the contract labour system.
The notification was challenged by AAI before the Delhi High Court. The Court felt that
the present proceedings cannot be proceeded with till the matter is resolved by the High
Powered Committee (HPC). Accordingly, the matter was referred to the HPC and the
notification was not given effect to. Meanwhile, the aforesaid 136 workers were removed
from service on 5 December 2003 as the contract of M/ s TDI International had come to
an end and a new contractor, Sindhu Holdings, came in its place. Against this order,
these 136 workmen filed a writ petition before the High Court of Delhi praying for their
absorption in service as regular employees and for implementation of the notification dated
26 July 2004. The single judge of the High Court dismissed the petition and held that the
establishment of AAI is no longer in existence and has changed. As such, the notification
dated 26 July 2004, cannot be applied to the new entity, DIAL. In view of this, it directed
the appropriate government to issue a fresh notification. Thereupon, the Indira Gandhi
International Airport TDI Karmachari Union filed a letter patent appeal (LPA) against the
judgement of the single judge. The Union of India also filed LP A against this judgement.
However, during the pendency of these LPAs, an order was passed by the chief labour
commissioner, Government of India holding that the appropriate government for DIAL is
the Central Government. These orders were challenged by DIAL in a writ petition. After
getting the permission, AAI filed another writ petition challenging the said notification on
merit. The division bench of the High Court heard all these matters together and passed
the impugned order on 18 December 2009. Thereupon, the review petition was filed by the
Union of India which was decided on 12 March 2010, by the High Court modifying para 61
of the impugned judgement. Against the impugned judgement of the division bench of the
High Court, two appeals were preferred by DIAL and three by AAI and one by the Indira
Gandhi International Airport TDI Karmachari Union before the Supreme Court. A question,
inter alia arose as to: who is the appropriate government for DIAL under CLRAA and ID Act?
The Court answered the question by giving several reasons in support of its conclusions,
namely (i) DIAL could not have entered into a contract with AAI without the approval of
the Central Government according to the mandate of Section 12A of the AAI Act. (ii) AAI
acts under the authority of the Central Government and DIAL acts under the authority of
AAI because of its contract with DIAL. From this, it may be concluded that DIAL works
under the authority of the Central Government, (iii) The Central Government has given
AAI the responsibility for overseeing the airports. To fulfil its obligations, AAI contracted
with DIAL. However, if DIAL does not perform its work properly or adequately, then AAI
will be breaching its statutory obligations and would be responsible for the consequences,
(iv) AAI is under an obligation to follow the directions of the Central Government and if
DIAL has undertaken those obligations through OMDA, then DIAL is presumably also
obligated to follow such directions, (v) Under Section 12(2) of the AAI Act. AAI is obliged
to provide air traffic service at the airport and since AAI has transferred its 'air transport
service' responsibilities to DIAL, the Central Government must be held to be the appropriate
government for DIAL, (vi) Privatization of airports does not mean that the 'appropriate
government' cannot be the Central Government.

24 AAI came into force by merging the International Airport authority Act, 1971 and the National
Airport Authority Act, 1985.
3 72 • Industrial Relations and Labour Laws

In UP Sugar and Cane Development Corpn. Ltd v. Chini Mill Mazdoor Sangth, 25 the Supreme
Court held that the question of granting promotion is a management function and the
labour court could not arrogate to itself such a function unless it is mala fide or by way of
any unfair labour practice or victimization. Even if any labour court or industrial tribunal
found that promotion had been made which was not justified on the above mentioned
ground, the proper course for it was to set aside the promotion/promotions and ask the
management to reconsider the cases of superceded employees and decide for itself as to
whom to promote, except of course, the person whose promotion has been set aside by the
labour court/tribunal.
Regional Provident Fund Commissioner v. Karnataka Provident Fund Employees Union 26
raises an important issue whether the activity carried on under the Provident Fund Act,
is being carried on by or under the authority of the Central Government as provided
in Section 2 (a) or not. Answering the question in the affirmative, the Supreme Court
observed:

The activity carried on by the central board or the state board under the
Provident Fund Act is not similar to the activity carried on by any private
trade or manufacturing business. They are truly the agents of the government
and they function under the authority of the government as provided in
the statute because the Central Government could have, for the purpose of
introducing the scheme of compulsory contribution to the provident fund,
set up an organization or a deparbnent in the absence of the corporate bodies
envisaged in the Provident Fund Act.
The aforesaid decision is in conformity with the scheme of distribution of powers
under the Constitution as also the scheme of the Industrial Disputes Act, 1947.

E. The Dispute Must Exist or Be Apprehended

The existence or apprehension of industrial dispute is another condition precedent for
making reference of the dispute. However, an opinion has to be formed regarding its
existence or apprehension. Naturally, a question arises as to what should be the quantum
of materials for such formation of opinion? To what extent the subjectivity or objectivity
test should be applied? Whether the dispute, before it is referred, should be specific or even
general reference is sufficient? What facts, circumstances, materials should be taken into
account by the government while referring the disputes?
In C P Sarathy case,27 the respondent manager was chargesheeted under Section 29
for non-implementation of award. An objection as to the validity of award was raised on
the ground that what had been referred by the government was not an industrial dispute.
Chief Justice Patanjali Shastri appreciating the collective nature of dispute opined that it
was not at all necessary that dispute must actually arise. According to the Chief Justice, the
expression'or is apprehended' under Section 10 of the Act is sufficient to indicate that mere
apprehension of dispute would arm the government to refer the dispute.

25 (200s) 9 sec 544.

26 (1994) 2 LLJ 503 (SC).
27 State ofMadras v. C P Sarathy, (1953) 1 LLJ 174 (SC). The dispute had arisen before 1952-Amendment
of Section 10 of the Act.
 Powers of the Appropriate Government • 3 7 3

In Sindhu Resettlement Corporation v. Industrial Tribunal 28, a dispute which was referred
to the tribunal was as follows:

Demand 1: R S Ambwaney should be reinstated in the service of Sindhu

Resettlement Corporation Ltd and he should be paid his wages from
21 February 1958.
The tribunal granted reinstatement with back wages to Ambwaney but on appeal the
Supreme Court held:

Since no such dispute about reinstatement was raised by either of the

respondents before the management of the appendix, it is clear that the
state government was not competent to refer a question of reinstatement as
an industrial dispute for adjudication by the tribunal. The dispute that the
state government could have referred competently was the dispute relating
to payment of retrenchment compensation by the appellant to respondent 3
which had been refused.
The aforesaid observations, reveal that if the basis of an industrial dispute does not
exist and the government refers that dispute for adjudication, the tribunal is not bound to
adjudicate that dispute without questioning the existence or the basis of that dispute which
was never demanded by Ambwaney from the management. The tribunal was competent to
question and ought to have decided the existence of the demand of reinstatement.
Shambhu Nath Goyal v. Bank of Baroda, Jullundur 29 provided an opportunity to the
Supreme Court to determine the scope of state government's intervention under Section 10
of the Industrial Disputes Act. In this case, an employee of the Bank of Baroda was dismissed
from service after an inquiry in which the employee appeared and claimed reinstatement.
Further, when the union approached the conciliation officer, the management resisted the
claim for reinstatement. Thereafter, the employee preferred an appeal to the competent
authority. On failure, the dispute was referred to the tribunal. Before the tribunal, the
management raised the preliminary objection that the employee had not made a demand. The
tribunal accepted the claim of the management and held that the reference was incompetent.
Thereafter, the employee preferred an appeal before the Supreme Court. The question
before the Court was whether the government's reference was proper and in accordance
with the provisions of the Act. The Court was of the view that to read into the definition
the requirement of written demand for bringing into existence an industrial dispute would
be tantamount to rewriting the Section, and ruled:

Undoubtedly, it is for the government to be satisfied about the existence of the

dispute and the government does appear to be satisfied. However, it would
be open to the party impugning the reference that there was no material
before the government, and it would be open to the tribunal to examine the
question, but that does not mean that it can sit in appeal over the decision
of the government.

28 Sindhu Resttlement Corporation v. Industrial Tribunal, (1968) 1 LLJ 834 (SC).

29 Shambhu Nath Goyal v. Bank of Baroda, Jullundur, (1978) 1 LLJ 484 (SC).
3 7 4 • Industrial Relations and Labour Laws

The aforesaid view seems to be opposed to an earlier decision of the Supreme Court in
Sindhu Resettlement Corporation Ltd v. Industrial Tribunal, Gujarat. 30 The decision in Shambu
Nath Goyal v. Bank of Baroda is, however, instructive in two respects. First, the dispute may
arise even if it is raised impliedly. The existence of the demand may be seen from the facts
of each case. Second, the caution that the tribunal cannot sit in appeal over the decision of
the government also helps in maintaining industrial peace. Third, the view that it will be
open to the tribunal to examine the question when the party impugning the reference pleads
that there is no material before the government for making a reference tries to balance the
arbitrary exercise of jurisdiction by the government.
Before we conclude the section, it would be relevant to note that though it is the
discretion of the appropriate government to form the opinion whether an industrial dispute
exists or is apprehended, it must be a honest opinion. 31 In other words, the opinion must
be reasonably formed and not capriciously or arbitrarily made. 32

F. The Choice
1. Two-fold Discretion. The Industrial Disputes Act, 1947 provides for government initiation
in persuasive and coercive processes for the settlement of industrial disputes. However,
government is vested with large measures of discretion, both in the matter of the choice of
settlement process as also in regard to the basic decision to intervene in labour-management
relations.
2. Choice of Settlement Process. Section 10, we have already seen, is the omnibus
provision empowering the appropriate government to choose a dispute settlement process.
Besides, the limitations are imposed by that section on the choice of settlement process as
well the forum for adjudication of industrial disputes. Sections 12(5) and 13(4) regulate
government's choice. Thus under Section 12 (1), where any industrial dispute exists or is
apprehended, the conciliation officer may, or where the dispute relates to a public utility
service and a notice under Section 22 has been given, shall, hold conciliation proceedings in
the prescribed manner and if the conciliation officer fails to effect a settlement, the appropriate
government is empowered under Section 12(5) to make a reference of the dispute only to
a board of conciliation or the appropriate adjudicating authority and, in particular not to a
court of inquiry. Likewise, where a board of conciliation is unable to promote a settlement,
the appropriate government is empowered to use coercive process for the settlement of the
dispute. Section 13 (4) bars a reference to a court of inquiry.
Statutory provisions may, therefore, be summed up as follows: Under Section 10(2)
as also under Sections lO(lA) and 13(4), the appropriate government has no role to play in
the choice of dispute settlement process. If the parties to the dispute decide the settlement
process under first of these the other two remaining sections, in sharp contrast. Section 12(5)
grants some, and Section 10(1) confers full, discretion to the appropriate government to
choose any one of the prescribed persuasive or coercive processes for effecting settlement
of industrial disputes.

30 Sindhu Resettlement Corporation v. Industrial Tribunal, Gujarat, (1968) 1 LLJ 834 (SC); See also
Management of Needle Industries v. Labour Court, (1986) 1 LLJ 405 (Madras).
31 Barium Chemicals Ltd v. Company Law Board, AIR 1967 SC, 295.
32 Rohtas Industries Ltd v. S D Agarwal, AIR 1969 SC 707.
 Powers of the Appropriate Government • 3 7 5

G. Nature and Scope of Discretion in Making or Refusing to Make Reference

State of Madras v. C P Sarathy 33 enunciated an epoch-making principle for exercise of
governmental power of reference. Here, the Supreme Court declared that governmental
function under Section 10 (1) was administrative in nature and admonished courts from
subjecting them to close security. Chief Justice Pitanjali Shastri observed:

In making a reference under Section 10 (1), the government is doing an

administrative act and the fact that it has to form an opinion as to the factual
existence of an industrial dispute as a preliminary step to the discharge of its
function does not make it any the less administrative in character. The court
cannot, therefore, canvass the order of reference closely to see if there was any
material before the government to support its conclusion, as if it was a judicial
or quasi-judicial determination. But, if the dispute was an industrial dispute
as defined in the Act, its factual existence and the expediency of making a
reference in the circumstances of particular case are matters entirely for the
government to decide upon, and it will not be competent for the court to hold
the reference bad and quash the proceedings for want of jurisdiction merely
because there was, in its opinion, no material before the government on which
it could have come to an affirmative conclusion on those matters.
In contrast to the aforesaid decision, there are series of decisions where the Supreme
Court34 and high courts have tended to regulate government discretion to an extent where
the government may find it extremely difficult to refuse reference. Indeed, courts persist in
the government making out a prima facie case for reference and then refusing reference on the
ground of 'relevant',' germane' and 'cogent' reasons. Conversely, the courts are unanimous
that 'extraneous' as much as 'irrelevant reasons' vitiate government determination. 35
The contents of the key words, namely 'relevant', 'cogent', 'germane', 'extraneous'
and 'irrelevant' in these observations belie verbal formulation. They are matters of case-
to-case determination. Nevertheless, the courts have, on occasions, indulged in the luxury
of indicating what they consider to be 'extraneous' or 'irrelevant'36• But beyond these
generalities, decisions have invariably turned on the facts of each case.
It is submitted that by evolving the aforesaid test, courts had shook the foundation laid in
State ofMadras v. C P Sarathy. 37 It would, however, be significantto note that in Bombay Union
ofJournalists v. State of Bombay38 the Supreme Courtrehabilitated State ofMadras v. C P Sarathy.

33 State of Madras v. C P Sarathy, (1953) 1 LLJ 174 (SC).

34 See State of Bombay v. K P Krishnan, (1960) 2 LLJ 592 (SC); Hochtief Gammon v. State of Orissa, (1975)
2 LLJ 418 (SC).
35 See Firstone Tyre and Rubber Co. Ltd v. K P Krishnan, AIR 1956 Bombay 273.
36 State ofBombay v. K P Krishna, (1960) 2 LLJ 592. For an excellent analysis, see M Kamraju, 'Government
Intervention in Labour Management Relations', a dissertation submitted for the degree of LLM in
the Banaras Hindu University, 1964, (unpublished). See also Workman of Oswal Weaving Factory v.
State of Punjab, (1967) 1 LLJ 557 (Punjab).
37 State of Madras v. C P Sarathy, (1953) 1 LLJ 174 (SC).
38 Bombay Union of Journalists v. State of Bombay, (1964) 1 LLJ 351 (SC).
See Workmen of J and P Coats (India) Pvt. Ltd v. State of Kerala, (1977) 2, LLJ 534. (Kerala); Sri Krishna
Jute Mills v. Government of Andhra Pradesh, (1977) 2 LLJ 363 (Andhra); Abdul Salem v. State of Tamil
Nadu, (1973) 43 FJR 180 (Madras).
3 7 6 • Industrial Relations and Labour Laws

But in spite of this decision, high courts have given conflicting opinions on the application of
Section 12 (5), which have left the scope of governmental power to make or refuse reference
more uncertain. It is in this context that we have to examine the Supreme Court decision in
Avon Services (Production Agencies) Pvt. Ltd v. Industrial Tribunal. 39 This decision restored its
ruling in State of Madras v. C P Sarathy, Justice Desai speaking for the Court observed:

Section 10(1) confers a discretionary power and this discretionary power can be
exercised on being satisfied that an industrial dispute exists or is apprehended.
There must be some material before the government on the basis of which
it forms an opinion that an industrial dispute exists or is apprehended. The
power conferred on the appropriate government is an administrative power
and the action of the government in making the reference is an administrative
act. The formation of an opinion as to the factual existence of an industrial
dispute as a preliminary step to the discharge of its function does not make it
any the less administrative in character. Thus, the jurisdictional facts on which
the appropriate government may act are the formation of an opinion that an
industrial dispute exists or is apprehended which undoubtedly is a subjective
one, the next step of making reference is an administrative act. The adequacy
or sufficiency of the material on which the opinion was formed is beyond the
pale of judicial scrutiny.40
The aforesaid view found the approval of the Supreme Court in State of Bombay v.
K P Krishnan. 41 This was followed 42 and applied in M/s Hochtief Gammon v. State of Orissa. 43
Here the Supreme Court observed that the executive has to reach its decisions by taking
into account relevant considerations. They should not refuse to consider relevant matters
nor should they take into account wholly irrelevant or extraneous matter. The Court also
ruled that even in an administrative decision, whatever may be the reasoning given by the
government, the Court will go into the question whether the reasons given by the government
are good reasons. But in Prem Kakar v. State of Haryana 44, the government of Haryana on
receipt of the report of the conciliation officer wherein he found that petitioner was not a
'workman' under the Act and, therefore, it was not a fit case for reference refused to make a
reference of the workman concerned on the ground that he was not a workman. Aggrieved
by the order, the workman filed a writ petition in the High Court of Punjab and Haryana
challenging the government's power to decide the issue whether he was a workman or not.
The High Court negatived the contention. Thereupon, he filed a special leave to appeal to
the Supreme Court. The Court held that the government had considered all the relevant
considerations and no writ of mandamus was maintenanable and that the High Court had
rightly rejected the application.

39 Avon Services (Production Agencies) Pvt. Ltd v. Industrial Tribunal, (1979) 1 LLJ 1 (SC).
40 Id. at 4.
41 State of Bombay v. K P Krishnan, (1960} 2 LLJ 592.
42 See Kartikeshwar Panda v. State of Orissa, (1971}; 1 LLJ 70 (Orissa); Sureshwar Narain Srivastava v.
Government of Bihar, (1971} 2 LLJ 152 (Patna); Workmen ofDalmia Cement (Bharat) Ltd v. State ofMadras,
(1969} 1 LLJ 499 (Madras).
43 M/s. Hochtief Gammon v. State of Orissa, (1975) 2 LLJ 418 (SC}.
44 Prem Kakar v. State of Haryana, AIR 1976 SC 1474.
 Powers of the Appropriate Government• 377

In Nirmal Singh v. State of Punjab45, the appropriate government refused to refer

the dispute for adjudication on the ground that the delinquent bank employee was not a
workman within the meaning of Section 2(s) of the Act but no reasons were given by the
government to justify this conclusion. The Supreme Court held that 'the labour commissioner
ought to have given reasons why he came to the conclusion that the appellant is not a
workman within the meaning of Section 2(s) of the Industrial Disputes Act.' The Apex Court,
therefore, directed the labour commissioner to make a reference to the tribunal.
Post-1984 witnessed a change in approach of the Court, particularly in regard to the
issuance of a writ of mandamus.
In Ram Au tar Sharma v. State of Haryana46, the government refused to make a reference
on the ground that the termination of service of the workman was made after charges against
him were proved in a domestic inquiry. Further, the government was of the view that the
punishment was not disproportionate to the gravity of the misconduct charged. The validity
of the government's refusal to make reference was challenged in a writ petition filed before
the Supreme Court. The Court held that a 'bare statement that a domestic inquiry was held
in which charges were held to be proved, if considered sufficient for not exercising power of
making a reference under Section 10 (1), almost all cases of termination of service cannot go
before the tribunal and it would render Section 2A of the Act denuded of all its intent and
meaning. The reasons given by the government must show that it examined the relevant
paper of inquiry and it was satisfied that the inquiry was legally valid and that there was
sufficient and adequate evidence to hold the charges proved. Further, the inquiry was not
biased against the workman and the punishment was commensurate with the gravity of
the misconduct charged. All these relevant and vital aspects have to be examined by the
industrial tribunal while adjudicating upon the reference made to it. In other words, the
reasons given by the government without examination of these issues would be tantamount to
adjudication which is impermissible. That is the function of the tribunal and the government
cannot arrogate to itself to that function.' 47 Accordingly the Court issued a writ of mandamus.
In the same case in another writ petition, the Central Government had declined to make
a reference on the ground that the action of the management in imposing on the workman
penalty of removal from service on the basis of an inquiry and in accordance with the
procedure laid down in the Railway Servants (Discipline and Appeal) Rules, 1968 was neither
mala fide nor unjustified. Disapproving the action of the government, the Supreme Court
held that ex-facie it would appear that the government acted on extraneous and irrelevant
considerations and the reasons mentioned would mutatis mutandis apply in respect of present
order of the government under challenge. Accordingly, the Court issued a writ of mandamus.
In Workmen of Syndicate Bank v. Government of India,48 the government refused to make
a reference on the ground that (i) the charge of misconduct against the workmen was proved
in a domestic inquiry; and (iz) penalty was imposed on the workmen after following the
required procedure. Setting aside this order, the Supreme Court observed:

45 AIR 1984 SC 1619.

46 1985 Lab. IC 1001. See also Gandharba Bhagi v. Steel Authority ofIndia, (1987} Lab. IC 1226 (Orissa);
Veerarajan v. Government of Tamil Nadu, AIR 1987 SC 695.
47 Prem Kakar v. State of Haryana, (1985) Lab. IC 1001, 1005.
48 (1985) 1 LLJ 93 at 94. (SC).
3 7 8 • Industrial Relations and Labour Laws

It would not be right for the Government of India to refuse to make a reference
on the ground that the charges of misconduct against the worker were proved
during a duly constituted deparbnental inquiry and penalty was imposed
on the worker after following the required procedure. If such grounds were
permissible, it would be the easiest thing for the management to avoid a
reference to adjudication and to deprive the worker of the opportunity of
having the dispute referred for adjudication, even if the order holding the
charges of misconduct proved was unreasonable or perverse or was actuated
by mala fides or even if the penalty imposed on the worker was totally
disproportionate to the offence said to have been proved. The management
has simply to show that it has held a proper inquiry after complying with the
requisite procedure and that would be enough to defeat the worker's claim
for adjudication.
The Court accordingly directed the government to reconsider the question of making a
reference of the industrial dispute for adjudication without taking into account the aforesaid
irrelevant ground.
InM P Irrigation Karamchari Sangh v. State of M P,49 the Supreme Court was invited to
determine the validity of the government's order refusing to make a reference. The union
raised three demands such as payment of dearness allowance, wages for the period of strike
and Chambal allowance. The state government referred only the question relating to wages
for the period of strike to the tribunal for adjudication but declined to refer the other two
issues on the ground that (i) the government was not in a position to bear the additional
burden; and (ii) grant of special allowance claimed would invite similar demands by other
employees which would affect the entire administration. Disapproving the government's
refusal to make a reference, the Court observed:

While conceding a very limited jurisdiction to the state government to examine

the demands it is to be understood as a rule, that adjudication of demands
made by the workmen should be left to the tribunal to decide. Section 10
permits appropriate government to determine whether dispute exists or is
apprehended and then refer it for adjudication on merits. The demarcated
functions are: (1) reference; (2) adjudication. When a reference is rejected on
the specious plea that the government cannot bear the additional burden, it
constitutes adjudication and thereby usurpation of the power of a quasi-judicial
tribunal by an administrative authority namely the appropriate government.
In our opinion, the reasons given by the state government to decline reference
are beyond the powers of the government under the relevant sections of the
Industrial Disputes Act... ... Same is the case ... of the state government that
the employees were not entitled to the Chambal allowance as the same was
included in the consolidated pay. This question, in fact, relates to the conditions
of service of the employees. What exactly are the conditions of service of the
employees and in what manner their conditions of service could be improved
are matters which are the special preserve of the appropriate tribunals to
be decided in adjudicatory processes and are not ones to be decided by the
government on a prima fade examination of the demand.

49 (1985) 1 LLJ 519.

 Powers of the Appropriate Government• 379

The Court cautioned:

There may be exceptional cases in which the state government may, on a

proper examination of the demand, come to a conclusion that the demands
are either perverse or frivolous and do not merit a reference. Government
should be very slow to attempt an examination of the demand with a view to
decline reference and courts will always be vigilant whenever the government
attempts to usurp the powers of the tribunal for adjudication of valid disputes.
To allow the government to do so would be to render Section 10 and Section
12 (5) of the Industrial Disputes Act nugatory.
In Telco Convoy Drivers Mazdoor Sangh and Another v. State of Bihar,50 the question
relating to the powers of the appropriate government under Section 10(1) of the Act to make
reference or not, again came up for consideration and the Supreme Court held as under:

While exercising power under Section 10(1), the function of the appropriate
government is an administrative function and not a judicial or quasi-judicial
function, and that in performing this administrative function the government
cannot delve into the merits of the dispute and take upon itself the determination
of the lis, which would certainly be in excess of the power conferred on it by
Section 10. It is true that in considering the question of making a reference under
Section 10(1), the government is entitled to form an opinion as to whether an
industrial dispute 'exists or is apprehended.' Butthe formation of opinion as to
whether an industrial dispute 'exists or is apprehended' is not the same thing
as to adjudicate the dispute itself on its merits. Where, as in the instant case,
the dispute was whether the persons raising the dispute are workmen or not,
the same cannot be decided by the government in exercise of its administrative
function under Section 10(1) of the Act. The order of the government, refusing
to refer the dispute on ground that the persons raising dispute are not workmen
is liable to be set aside. As the government had persistently declined to make
a reference under Section 10(1), the Supreme Court directed the government
to make a reference.
In Secretary, Tea Association v. Ajit Kumar Barat, 51 the Supreme Court summarized the
legal position on the scope of the power of the appropriate government to make reference
under Section 10 of the ID Act namely.
1. The appropriate government would not be justified in making a reference under
Section 10 of the Act without satisfying itself on the facts and circumstances brought
to its notice that an industrial dispute exists or is apprehended and if such a reference
is made, it is desirable wherever possible, for the government to indicate the nature
of dispute in the order of reference.
2. The order of the appropriate government making a reference under Section 10 is an
administrative order and not a judicial or quasi-judicial one and the court, therefore,
cannot canvass the order of the reference closely to see if there was any material before
the government to support its conclusion, as if it was a judicial or quasi-judicial order.

50 AIR 1989 SC 1565.

51 (2000) 3 sec 93.
380 • Industrial Relations and Labour Laws

3. An order made by the appropriate government under Section 10 being an administrative

order no lis is involved, as such an order is made on the subjective satisfaction of the
government.
4. If it appears from the reasons given that the appropriate government took into account
any consideration irrelevant or foreign material, the court may in a given case consider
the case for a writ of mandamus.
5. It would, however, be open to a party to show that what was referred by the government
was not an industrial dispute within the meaning of the Act.
There appears to be reversal in the line of thinking followed between 1985-95. Thus, in
Sultan Singh v. State of Haryana 52, the Supreme Court examined the power of government to
make reference. In this case in 1955, the appellant had joined the respondents as a workman.
He was promoted on 6 September 1972, as a tape reader. On 28 June 1979, he was served with
a chargesheet and on 9 August 1979, his services were terminated. On 30 June 1981, he made
a demand on the respondent/employer for reinstatement, which was rejected. Thereafter,
he made an application for reference under Section 10 to the state government, which was
rejected by order dated 20 October 1981. The appellant again made a representation on
25 March 1982 and the Minister made a note on the representation directing it to make a
reference. However, since no communication was received by the appellant, he wrote a
letter to the labour commissioner, Haryana on 26 April 1984 but to no avail. He then filed
the writ petition. By order dated 6 August 1984, the High Court dismissed the writ petition.
Thereafter, the appellant filed before the Supreme Court by special leave to appeal. Two
questions which arose in this appeal were:
(1) Whether the state government should hear the respondent/employer before making
a reference on a second representation under Section 10 of Industrial Disputes Act,
1947, since it was rejected on earlier occasion; and
(2) Whether there is an order of reference by state government so as to entitle the appellant
to have the dispute adjudicated by the tribunal.
While dealing with these question, the Supreme Court observed:

A conjoint reading of Section 10(1) and Section 12(5) of Industrial Disputes

Act, 1947 would yield the conclusion that on making an application for
reference, it would be open to the state government to form an opinion
whether industrial dispute exists or is apprehended and then either to make
a reference to the appropriate authorities or refuse to make the reference.
Only on rejection thereof, the order is only an administrative order, and not
a quasi-judicial order ..... The appropriate government is entitled to go into
the question whether an industrial dispute exists or is apprehended. It would
only be subjective satisfaction on the basis of the material on record. Being an
administrative order no lis is involved. Thereby, there is no need to issue any
notice to the employer nor to hear the employer before making a reference or
refusing to make a reference. Neither Section 10(1) nor Section 12(5) enjoins
the appropriate government to record reasons for making reference .....The
need for hearing is obviated, if it is considered on second occasion as even

52 1996 1 LLJ 879.

 Powers of the Appropriate Government • 3 8 1

then if it makes reference, it does not cease to be, an administrative order and
so is not incumbent upon the state government to record the reasons therein.
On the issue whether, as a fact reference has been ordered by the government, the
Supreme Court held that as government was of the opinion that there existed no industrial
dispute, it declined to make reference under Section 10(1). Therefore, there is no reference
made to the appropriate tribunal/labour court, or industrial tribunal and therefore, no relief
can be given to the appellant.
In Hindustan Aeronautics Ltd v. Hindustan Aero Canteen K Sangh 53 the question arose
whether High Court was justified in holding that state government is the 'appropriate
government' under the Contract Labour (Regulation & Abolition) Act, 1986. The Supreme
Court referred to its earlier decision in Steel Authority of India v. National Union Water
Front Workers 54 and came to the conclusion that the appropriate government will be that
government which exercises control and authority over the concerned organization. Applying
this principle in this case, the Court held that 'it is undisputed thatthe Hindustan Aeronautics
Ltd is an undertaking of the Central Government and it is the Central Government which
exercises full control over the same. Issuance of licence by the state government is no criteria
to come the conclusion that state government should be the appropriate government.'
It is submitted that the Court, even though referred the Steel Authority of India case,
but in fact did not apply the ratio of the said decision.
Is it permissible for a tribunal to which reference was made by the appropriate
government to decide whether badli workmen should be regularized? This issue came up for
consideration before the Supreme Court in Gauri Shankar Chatterjee v. Taxmaco Ltd55 In this
case, the petitioners claimed that they had been working in the first respondent company
since last several years as 'badli' workers and that they were entitled to be regularized.
The dispute was referred by the appropriate government of the industrial tribunal for
adjudication. The industrial tribunal held that out of the 100 workmen, 92 were entitled to
be regularized and to have all benefits and status like regular employees. They were also
entitled to have other statutory benefits from the date of their respective initial engagement.
This award of the tribunal was challenged before the High Court on the ground that the
industrial tribunal had committed an error of jurisdiction as it allowed the scope of the
reference to be enlarged. The division bench of the High Court held that the tribunal had
enlarged the scope of the reference and thereby committed an error of jurisdiction. Against
this order, an appeal was filed before the Supreme Court. The Supreme Court confirmed
the orders of the division bench of the High Court.
In Empire Industries Ltd v. State ofMaharashtra 56, the Court held that it is not open to the
management to make a demand/ proposal for retrenchment of workmen and disregarding
the provisions of the Act ask the government to refer the demand/dispute under section
10(1) to the tribunal for adjudication.
Sharad Kumar v. Government ofNCT of Delhi57 raises an important issue as to whether
the appropriate government, while performing the administrative function of making a

53 (2003) 1 LLJ 494 (SC).

54 2001 LLR 971.
55 (2002) Lab IC 2467.
56 (2010) 4 sec 271 at 274.
57 (2000) 3SCC 324.
382 • Industrial Relations and Labour Laws

reference to the labour court/industrial tribunal can delve into the merits of dispute and take
upon itself the question of deciding whether a person is a 'workman' or not? The Supreme
Court answered the question in the negative and held that the state government could not
arrogate to itself the power to adjudicate on the question and hold that the respondent
was not a workman within the meaning of Section 2(s) of the Act. Such a matter should
be decided by the industrial tribunal or the labour court on the basis of the materials to be
placed before it by the parties. The court accordingly held that the order passed by the state
government not to make a reference is clearly erroneous and accordingly, the order passed
by the High Court maintaining the same is unsustainable.
It is submitted that the aforesaid decision runs counter to the principles laid down
in its earlier decision in Secretary, Indian Tea Association v. Ajit Kumar Barat58 wherein the
court ruled that 'before making a reference under Section 10 of the Act, the appropriate
government has to form an opinion whether an employee is a workman and thereafter has
to consider as to whether an industrial dispute exists or is apprehended.'59
It is unfortunate that the court's attention was not drawn to this decision in the case
under review.
In Virendra Bhandari v. Rajasthan State Road Corporation 60, the government referred an
industrial dispute regarding termination during suspension to the industrial tribunal cum
labour court for adjudication. The tribunal held that though notices had been served upon
the appellant, he had remained absent. It, therefore, decided the case ex-parte. Thereafter,
an application was filed by the appellant for restoration. The tribunal held that since the
appellant had not evinced any interest in the dispute and there had been delay in seeking
restoration of those proceedings, it was not proper to cancel the award after having issuance
of notification of the award challenged before the High Court. However, the government by
another order dated 20 December 1988 made another reference of a dispute to the tribunal on
the same questions on which the earlier reference had been made. The High Court held that
(i) the tribunal had already given a finding on an earlier occasion; and that (iz) no industrial
dispute exists which is to be determined. It, therefore, held that the second reference was
incompetent. On appeal, the Supreme Court laid down the following principles:
(i) When the parties concerned do not appear before the tribunal, the tribunal should note
its inability to record the finding on the issue referred to it and not that the dispute
itself does not exist.
(iz) When there is no adjudication of the matter on merits, it cannot be said that the
industrial dispute does not exist.
(iii) If the industrial dispute still exists, such a matter can be referred under Section 10 of
the Act.
(iv) In proceedings of this nature it should be borne in mind that the industrial disputes
are referred to the labour court or the industrial tribunal for maintenance of industrial
peace and not merely for adjudication of the dispute between two private parties.
The Supreme Court, accordingly held that it was not permissible for the government
to have made the second reference.

58 (2002) 4 sec 490.

59 (2000) 1 LLJ 809.
60 (2002) 9 sec 104.
 Powers of the Appropriate Government • 3 8 3

In Sarva Shramik Sangh v. Indian Oil Corporation, the Supreme Court ruled that a writ of
mandamus would be issued to the appropriate government to reconsider the refusal to make
a reference, where (i) the refusal is on irrelevant, irrational or extraneous grounds; (ii) the
refusal is a result of the appropriate government examining the merits of the dispute and
prejudging/ adjudicating/ determining the dispute; (iii) the refusal is mala fide or dishonest
or actuated by malice; (iv) the refusal ignores the material available in the failure report of
the conciliation officer or is not supported by any reason.

H. Reference Should be Clearly Spelled Out

The full bench of Delhi High Court in India Tourism Development Corporation v. Delhi
Administration61 held that the terms of reference should clearly spell out the real dispute
between the parties otherwise the order of reference would be liable to be interfered with
in exercise of writ jurisdiction as the labour court would not travel beyond the reference
and decide the real question in dispute.

I. Reference Once Made Cannot be Cancelled, Withdrawn or Superseded

The Industrial Disputes Act does not either expressly or impliedly confer any power on the
appropriate government to cancel, withdraw or supersede a reference made under Section
10 (1) of the Act. The Supreme Court in State of Bihar v. D N Ganguli62 has held that no
such power is vested on it either expressly or impliedly to cancel, withdraw or supersede
its earlier reference. In the Court's view, if the legislature had intended to confer on the
appropriate government the power to cancel its own order made under Section 10 (1), the
legislature would have made a specific provision in that behalf and would have prescribed
appropriate limitation to the exercise of the said power. The Court also held that the rule
of construction enunciated by Section 21 of the General Clauses Act in so far as it refers to
the power of rescinding or cancelling the original order cannot be invoked in respect of the
provision of Section 10(1) of the Industrial Disputes Act, 1947.

J. Government's Power to Make Reference 'At Any Time'

The expression 'at any time' in Section 10 raises four issues, (z) Whether it is mandatory
for the appropriate government to wait for the outcome of conciliation proceedings before
making a reference? (ii) Whether refusal by the appropriate government to refer the dispute
for adjudication debars it from making subsequent reference? (iii) Whether there is any time
limit for making the order of reference? (iv) Is the government bound to issue notice to the
parties when it decides to refer a dispute which it had refused to refer at the first instance?
These issues formed the subject-matter of judicial scrutiny in a number of decided cases.

K. Failure Report of Conciliation Authorities-not a Condition Precedent

It has been held that it is not mandatory for the appropriate government to wait for the
outcome of conciliation proceedings before making the order of reference. Thus, the

61 1982 LIC 1309 followed by Division Bench of Delhi High Court in Eagle Fashion v. Secretary (Labour),
(1999) 1 LLJ 232.
62 (1958) 2 LLJ 634: AIR 1958 SC 1018.
384 • Industrial Relations and Labour Laws

Supreme Court in Western India Match Co. Ltd v. Western India Match Co. Workers Union 63
while construing the expression' at any time' occurring in Section 4 (k) of the UP Industrial
Disputes Act, 1947 which is in pari materia with Section 10 of the Industrial Disputes Act
1947 observed:

Ordinarily, the question of making a reference would arise after conciliation

proceedings have gone through and the conciliation officer has made a
failure report. But the government need not wait until such a procedure has
been completed. In an urgent case, it can 'at any time' i.e., even when such
proceedings have not begun or are still pending, decide to refer the dispute for
adjudication. The expression 'at any time' thus takes in such cases as where
the government decides to make a reference without waiting for conciliation
proceedings to begin or to be completed.
The aforesaid view is based on the principle that there is nothing in Section 10(1) to
suggest that the 'appropriate government' must wait for the failure report of conciliation
officer.

L. Refusal to Make Reference on Earlier Occasion-if Debars Subsequent

Reference
It has now been well established through a series of decided cases of the Supreme Court
that refusal of the government to refer the dispute to adjudication does not debar it from
making subsequent reference.
In Western India Match Co. v. Western India Match Co. Workers Union 64, the Supreme Court
ruled that the government does not exhaust its power to refer when it refuses reference.
This is based on the reasoning that the function of the government under Section 10(1) is
administrative function. The principles of rejudica cannot be imported in such a situation.
In fact, when the government refuses to make a reference, it does not exercise its power, it
exercises its power only when it decides to refer. Consequently, the power to refer cannot
be said to have been exhausted when it has declined to make a reference at an earlier stage.
Again in Binny Ltd v. Their Workmen, 65 the Supreme Court reiterated that the mere
fact that on two previous occasions government had taken the view that no reference was
called for, does not entitle the court to conclude that there could be no cause for a reference
at the later date.
The judicial policy to preserve the government's power to make a reference of a
dispute subsequently after declining to do so initially, is evident from the Supreme Court
decision in Avon Services (Production Agencies) Pvt. Ltd v. Industrial Tribunal. 6 In this case,
it was contended that once the appropriate government declined to make a reference, it
would not subsequently change its mind and make such reference unless there was some
fresh or additional material before it. The Court, however, rejected the contention. Justice
Desai observed:

63 (1970) 2 LLJ 256 (SC).

64 Western India Match Co. v. Western India Match Co. Workers Union, AIR 1970 SC 1205.
65 Binny Ltd v. Their Workmen, (1972) 1 LLJ 478 (SC).
66 Avon Services (Production) Agencies Pvt. Ltd v. Industrial Tribunal, Haryana, (1979) 1 LLJ 1 (SC).
 Powers of the Appropriate Government• 385

Merely because the government rejects a request for a reference or declines

to make a reference, it cannot be said that the industrial dispute has ceased
to exist, nor could it be said to be a review of any judicial or quasi-judicial
order or determination. The industrial dispute may nonetheless continue to
remain in existence and if at a subsequent stage, the appropriate government
is satisfied that in the interest of industrial peace and for promoting industrial
harmony, it is desirable to make a reference, the appropriate government does
not lack power to do so under Section 10(1), nor is it precluded from making
the reference on the only ground that on an earlier occasion it had declined
to make the references.
The learned judge fortified his view by pointing out that the expression' at any time'
in Section 10 (1) would clearly negative the contention that once the government declined to
make a reference, the power to make it under that Section in respect of the same dispute got
exhausted. Such a construction, he observed, would 'denude a very vital power conferred on
the government in the interest of industrial peace and harmony and it need not be whittled
down by interpretative process.' The Court then examined the contention that the ratio of
Western India Match Co. Ltd v. Western Indian Match Co. Workers Union, 67 suggests that the
government must have some material made available to it, subsequent to its refusal to make
a reference, for the formation of a fresh opinion for making the reference and observed:

It is not absolutely necessary that there ought to be some fresh material before
the government for reconsideration of its earlier decision. The government
may reconsider its decision on account of some new facts brought to its notice
or for any relevant consideration and such other relevant consideration may
include the threatto industrial peace by the continued existence of the industrial
dispute without any attempt at resolving it and that a reference would at least
bring the parties to the talking table.
It added:

A refusal of the appropriate government to make a reference is not indicative of

an exercise of the power under Section 10 (1), the exercise of the power would be
a positive act of making a reference. Therefore, when the government declines
to make a reference, the source of power is neither dried up nor exhausted. It
only indicates that the government for the time being refused to exercise the
power but that does not denude the power.
It is, thus, evident that the tendency of the Court is to protect the administrative
discretion under the Industrial Disputes Act even in the absence of any fresh material.

M. Time Limit for Making Reference

Even though the Industrial Disputes Act, 1947, does not prescribe any time limit for reference
of the dispute to industrial tribunal, the courts have emphasized that disputes should
be referred as soon as possible after they have arisen and after the failure of conciliation
proceedings, particularly when dispute relates to wholesale discharge of workman.

67 Western India Match Co. Ltd v. Western India Match Co. Workers Union, (1970) 2 LLJ 256 (SC).
386 • Industrial Relations and Labour Laws

Jn N edungadi Bank Ltd v. K P Madhavankutty, 68 the appellant bank initiated disciplinary

proceedings against its employee (clerk) on the charges of misappropriation of certain
amount and falsification of records. On conclusion of the inquiry, he was served with show
cause notice as to why punishment of dismissal from service be not awarded to him in the
light of the grave misconduct proved against him. However, the respondent admitted his
guilt but pleaded for mercy. Thereupon, the appellant bank dismissed him from the services
of the bank. In his appeal he expressed unconditional regret and prayed for a lenient view
to be taken in the matter. His appeal was dismissed. He was given the benefit due to him.
However, after a period of about 7 years, he served a notice on the bank contending that he
was discriminated against as two other employees of the bank under similar situation were
reinstated in the service of the bank. The workman raised dispute before the assistant labour
commissioner (Central). He held that there was no scope for formal proceedings under the
Act since the matter was stale, having arisen more than 9 years back. The respondent moved
the High Court for direction of the Central Government to pass an order on his application.
The High Court directed the assistant labour commissioner to send his report under Section
12(4) of the Act to the Central Government which he did. The Central Government declined
to make a reference which led him to again file a writ petition in the High Court which
was disposed of with the direction to the Central Government to examine the matter. This
order was challenged by the management in writ appeal in which the division bench held
that it will be well within the right of the Central Government to examine the entire facts
of the case including the fact that the employee had admitted guilt and only pleaded for
merciful treatment and accepted the amount due to him in full satisfaction of his claim.
The Court further held that the question of delay or the claim being stale or belated will
also be relevant factors for the appropriate government to consider. Thereafter, the Central
Government made the reference as to whether the dismissal of the employee from service
was justified and if not, to what relief the workman concerned was entitled. Aggrieved by
this, the bank challenged the reference in the High Court. A single judge of the High Court
allowed the writ petition. However, on the writ appeal the division bench upheld the validity
of the reference. Thereupon, the special leave to appeal was filed in the Supreme Court. The
Supreme Court held that there is no rational basis for making a reference by the Central
Government after a lapse of 7 years of the order dismissing the respondent from service,
particularly when the respondent did not challenge the disciplinary proceedings, which
resulted in his dismissal. Furthermore, it could not be said that an industrial dispute had
arisen or was apprehended after a lapse of 7 years of his dismissal. The Supreme Court also
observed that every dispute that a workman raises does not become an industrial dispute
and the appropriate government cannot in a mechanical manner make the reference of
the alleged dispute terming it as an 'industrial dispute'. The court accordingly held that
the Central Government lacked power to make reference both on the ground of delay in
invoking the power under Section 10 of the Act and there being no 'industrial dispute'
existing or even apprehended.
A perusal of the aforesaid decision reveals that the appropriate government should
not make reference in a mechanical manner and may refuse to refer the case on the ground
of delay in invoking the power and no industrial dispute existed or was apprehended in
such cases.

68 (2000) 2 sec 455.

 Powers of the Appropriate Government• 387

In UP State Electricity Board v. Rajesh Kumar 69, the UP State Electricity Board terminated
the services of certain workmen. After 19 years, the dispute was referred for adjudication.
The labour court awarded reinstatement of the workers with continuity of service. The
board challenged the said award before the High Court and one of the grounds of challenge
was that the reference made after a long delay of almost 19 years was not proper and it
being stale, the dispute did not exist on the date of reference. However, on a writ petition,
the High Court confirmed the labour court's award. Thereupon, the board filed an appeal
before the Supreme Court. The Supreme Court also upheld the award of the labour court by
observing that the issue with regard to the stale claim of the workmen was not raised before
the labour court. For the first time, it was sought to be urged before the High Court. If the
board was really aggrieved and serious at the stale claim of the workmen, it was open to the
board to question the very reference made by the state government, when it was referred.
The validity of the reference was not questioned. Thereafter, the board participated in the
process before the labour court and contested the award. Therefore, in view of the facts as
stated above, and particularly when the board did not challenge the order of reference when
it was referred, it is not necessary to examine the question of stale claim made by the board.
In Karan Singh v. Executive Engineer, Haryana State Marketing70 the Supreme Court held
that the industrial tribunal cannot strike down a reference for adjudication on a ground of
delay in raising a dispute by the workman.
Following the aforesaid decision in Nedungadi Bank Ltd (supra), another two-judge
bench of the Court in Haryana State Cooperative Land Development Bank v. Neelam 71 , accepted
the similar claim of the management and non-suited the workman on the ground of delay.
In Kuldeep Singh v. GM, Instrument Design Development and Facilities Centre72, the
services of the appellant/workman were terminated with effect from 26 May 1992. He
made various representations from the day his services were terminated. The particulars
furnished also showed that the appellant was fighting for his cause before the management
as well the state government including the chief secretary and the minister of the concerned
department. Ultimately, the state government made a reference on 22 November 1999 to
the labour court for adjudication. On these facts, a question arose whether the appropriate
government is empowered to make a reference at any time. The Supreme Court laid down
the following principles:

There is no prescribed time limit for the appropriate government to exercise its
powers under Section 10 of the Act. It is more so in view of the language used,
namely, if any industrial dispute exists or is apprehended, the appropriate
government' at any time' refer the dispute to a board or court for inquiry. The
reference sought for by the workman cannot be said to be delayed or suffering
from a lapse when the law does not prescribe any period oflimitation for raising
a dispute under Section 10 of the Act. The real test for making a reference is
whether at the time of the reference, dispute exists or not and when it is made,
it is presumed that the state government is satisfied with the ingredients of the
provision; hence, the labour court cannot go behind the reference. It is not open

69 (2005) 1 LLJ 1081.

70 2007 LLR 1233.
71 (2005) 5 sec 94.
72 2011 (2) SLR 376.
3 8 8 • Industrial Relations and Labour Laws

to the government to go into the merits of the dispute and once it is found that
an industrial dispute exists, then it is incumbent on the part of the government
to make reference. It cannot itself decide the merit of the dispute and it is for
the appropriate court or forum to decide the same. The satisfaction of the
appropriate authority in the matter of making reference under Section 10(1)
of the Act is subjective satisfaction. Normally, the government cannot decline
to make reference for laches committed by the workman. If adequate reasons
are shown, the government is bound to refer the dispute to the appropriate
court or forum for adjudication. Even though there is no limitation prescribed
for reference of dispute to the labour court/industrial tribunal, it is only
reasonable that it should be referred as soon as possible after it has arisen and
after conciliation proceedings have failed; particularly, when disputes relate to
discharge of workmen. If sufficient materials are not put forth for the enormous
delay, it would certainly be fatal. However, in view of the explanation offered
by the workman in the case on hand, as stated and discussed by us in the earlier
paragraphs, we do not think that the delay in the case on hand has been so
culpable as to disentitle him any relief. We are also satisfied that in view of the
details furnished and the explanation offered, the workman cannot be blamed
for the delay and he was all along hoping that one day, his grievance would
be considered by the management or by the state government.73
Recommendations of the Second National Commission on Labour. The (Second)
National Commission on Labour has recommended that all disputes, claims or complaints
under the law on labour relations should be raised within one year of the occurrence of the
cause of action.

N.Audi Alteram Partem Rule-If Applies in Subsequent Reference by the

Government
In Avon Services (Production) Agencies (P) Ltd v. Industrial Tribunal, Haryana74, the Supreme
Court has held:

... when the government declines to make a reference, the source of power is
neither dried up nor exhausted .... The power to make the reference remains
intact and can be exercised if the material and relevant considerations for the
exercise of the power are available ....
However, the Court did not specifically clarify as to whether the government is under
an obligation to issue notice to the (one or both) party concerned when it makes a second
reference, after the first refusal. This had led to conflicting opinions among the High Courts.
While the full bench of Madras High Court in G Mathu Krishnan v. New Horizon Sugar Mills
Pvt. Ltd75 held that the state government of Pondicherry, when it made the reference acting
for the second time, in exercise of its statutory power under Section 10 of the Act, did not
act fairly, in that it did not hear the mills in question. Therefore, the award passed by the
labour court, Pondicherry, pursuant to such reference made by the government is also a
nullity and made without jurisdiction and has therefore to be quashed.

73 Id at 383-384.
74 (1979) 1 LLJ 1.
75 G Mathu Krishnan v. New Horizon Sugar Mills Pvt. Ltd, (1980) Lab. IC 475.
 Powers of the Appropriate Government• 389

The Allahabad High Court in UPSE Board, Lucknow v. State of U P,76 held that the
principle of audi alteram partem cannot apply while making second reference.
The division bench of the Kerala High Court on the other hand in Abdul Rahiman Haji
v. Abdul Rahiman 77 held:

[I]f the government chooses to reconsider its earlier decision not to refer the
dispute for adjudication, it was not necessary to give notice to the employer of
the proposed action, because no civil rights of any parties are being adjudicated
upon.7
In Management of Theatre Sanjaya v. The State,79 the full bench of the Karnataka High
Court was invited to consider the question whether parties should be given opportunity to
be heard, where the government first decides to make a reference. The majority answered
as follows:

The principle of audi alteram partem is applicable to a case in which the

government having declined to make a reference of dispute for industrial
adjudication under Section 10 (1) ... according and communicating such
decision in accordance with the latter part of Section 12 (5) ... proposes to refer
the same dispute for adjudication subsequently except when:
(a) the reference becomes necessary under circumstances set out in Section 10
(5) ...... or
(b) the government finds that there are exceptional circumstances in which
any delay in making the reference is fraught with serious consequences to
industrial peace and, therefore, affording of an opportunity to the party
concerned is expedient.

0. Reference can be Amended or Corrected

It has been held in Dabur (Dr SK Burman) Pvt. Ltd v. Their Workmen 80 that government is
competent to correct clerical errors.

P. Scope of Writ of Mandamus

Another issue connected with Section 10 read with Section 12 (5) is whether the Supreme
Court under Article 32 of the Constitution or the High Court under Article 226 of the

76 (1992) Lab. IC 153 (All.).

77 1980 Lab. IC 910.
78 1980 Lab IC 910 at 911. See also MUM Services Ltd v. RT A Malabar, AIR 1954 Mad. 59; Sudhansa

Kanta v. State of Bihar, AIR 1954 Pat. 299; Bagga Singh v. Distt. Magistrate, AIR 1955 Assam 83; Ratilal
Bhogilal v. State of Gujarat, AIR 1966 Guj. 244; Ajanta Industries v. Central Board of Direct Taxes, AIR
1976 SC437.
79 (1984) 2 LLJ 400. See also Mum Services Ltd v. RT A Malabar, AIR 1953 Madras, 59; Sudhansa Kanta

v. State of Bihar, AIR 1954 Patna 299; Bagga Singh v. Distt. Magistrate, AIR 1955 Assam 183; Vermula
Thimmappa, v. Addl. Distt. Magistrate, AIR 1955 NUC Andhra Pradesh 4458; Ratilal Bhogilal v. State
of Gujarat, AIR 1966 S.C. 244. Ajanta Industries v. Central Board of Direct Taxes, AIR 1976 SC 437.
so Dabur (Dr SK Burman) Pvt. Ltd v. Their Workmen, AIR 1968 SC 17.
390 • Industrial Relations and Labour Laws

Constitution is competent to issue writ of mandamus or directions to the government to

make a reference for adjudication. This issue has received the attention of the Supreme
Court in a catena of cases.
In State of Bombay v. K P Krishnan 81 , the Supreme Court held that even though the
order passed by the government under Section 12(5) of the Industrial Disputes Act refusing
to make a reference was an administrative order and the reasons given by it must not be
justifiable in the sense that their propriety, adequacy or satisfactory character might not be
open to judicial scrutiny, nonetheless if the Court was satisfied that the reasons given by
the Government for refusing to make a reference are extraneous and not germane, then the
Court could issue, and would be justified in issuing a writ of mandamus.
Again in Bombay Union ofJournalists v. State ofBombay,82 the Supreme Court pointed out
that if the appropriate government refuses to make a reference on irrelevant consideration
or on extraneous grounds, or acts mala fide, a party would be entitled to move the High
Court for a writ of mandamus.
In a subsequent case in Mahabir Jute Mills v. Shibanal Saxena 83 , the Supreme Court
while hearing an appeal against the order of Allahabad High Court, which issued a writ
of mandamus to the government of Uttar Pradesh to refer the dispute for adjudication held
that it was not open to the High Court to issue directions to the appropriate government so
as to circumscribe the statutory powers under Section 4 (k) of the UP Industrial Disputes
Act, 1947. It added that 'all that it could have done was to ask the government as to how to
exercise statutory discretion conferred on it by Section 4 (k) of the Act'.
The aforesaid view was reiterated in Govind Sugar Mills v. Hind Mazdoor Sabha. 84 But
in this case, the Supreme Court interpreted the following observations made by it in Bombay
Union of Journalists v. State of Bombay:

If the appropriate government refuses to make a reference for irrelevant

considerations, or on extraneous grounds, or acts mala fide, that of course,
would be another matter, in such a case the party would be entitled to move
the High Court for a writ of mandamus.
to mean:

...... What was meant to be conveyed by the sentence aforesaid was that the
party would be entitled to move the High Court for interfering with the order
of the government and not necessarily for the issuance of a writ of mandamus
to direct the government to make a reference. The mandamus would be to
reconsider the matter. It does not seem to be quite reasonable to take the
view that after the refusal of the government to make a reference is quashed,
a writ of mandamus to make a reference must necessarily follow. The matter
has still to be left for the exercise of the power by the government on relevant
consideration in the light of the judgement quashing the order of refusal.

81 State of Bombay v. K P Krishnan, 1960 2 LLJ 592.

82 Bombay Union of Journalists v. State of Bombay, (1964) 1 LLJ 351.
83 Mahabir Jute Mills v. Shibanal Saxena, (1975) 2 LLJ 326 (SC).
84 Govind Sugar Mills v. Hind Mazdoor Sabha, (1975) 2 LLJ 370,373.
 Powers of the Appropriate Government• 391

From the aforesaid decision, it is evident that the writ of mandamus would lie to
reconsider the matter where the appropriate government refuses to refer the dispute on (i)
irrelevant considerations, (iz) extraneous grounds or (iii) in a mala fide manner.
In Hochtief Gammon v. State of Orissa85, the Supreme Court following the decision of the
House of Lords in Padfield v. Minister ofAgriculture, Fisheries and Food 86 ruled that the Court
would be justified in issuing a writ of mandamus if the order of the government declining
to refer the dispute amounted to an outright refusal to consider relevant matters, or if the
government had misdirected itself in point of law in wholly omitting, to take into account
the relevant considerations which would amount to unlawful behaviour.
In Rohtas Industries Ltd v. S D Aggarwal,87 the Supreme Court again observed that
the order of reference could be challenged if there were no grounds or material before the
government upon which it could reasonably be satisfied that the order should be made.

Q. Court's Power to Issue Directions

Can the Court direct the governmentto refer an industrial dispute for adjudication? This issue
was raised before the Supreme Court in Sankari Cement Alai Thozhilalar Munnetra Sangam v.
Government of Tamil Nadu. 88 In this case, the appropriate government failed to perform the
duty imposed by the Act, for reasons which are, irrelevant. In view of this, the Court directed
the government to refer the dispute within 4 weeks to the tribunal for adjudication. Similarly,
in Nirmal Singh v. State of Punjab 89, the Supreme Court gave direction that the reference be
made forthwith. Again in V Veerarajan v. Government of Tamil Nadu, 90 the Supreme Court
issued direction to the government and the labour court to which the reference was to be
made to do so within the prescribed period. In this case, the government of Tamil Nadu
refused to make a reference of the dispute regarding dismissal of workmen, on the ground
that the domestic inquiry was conducted by the employer according to the principles of
natural justice and the punishment imposed by the employer was not disproportionate to
the gravity of the offence committed by the workmen. On rejection of the writ petition by
the single judge and confirmation of the said order by the division bench, the aggrieved
workmen filed a special leave to appeal in the Supreme Court challenging the order of the
court below. The Supreme Court, pending appeal at the first instance, directed the state
government to reconsider the matter without taking into account the irrelevant grounds
stated therein within a period of 30 days, whether it would make a reference of the industrial
dispute to the labour court. The government again reiterated its earlier stand and gave
seven reasons in support of its order refusing to make a reference. When the appeal was
heard again, the Supreme Court disapproved of the reasons given by the government and
directed the state government to make a reference within one month from the date of the
order. It also directed the labour court to which the reference was made to dispose of the
reference within 4 months from the date of reference.

85 Hochtief Gammon v. State of Orissa, (1975) 2 LLJ 418 (SC}.

86 Padfield v. Minister of Agriculture, Fisheries and Food, [1968] AC. 997.
87 Rohtas Industries Ltd v. S D Aggarwal, AIR 1969 SC 702.
88 (1983} 1 LLJ 460.
89 AIR 1984 SC 1619.
90 AIR 1987 SC 494.
392 • Industrial Relations and Labour Laws

The aforesaid decision not only shows the concern of the judiciary to protect the
interest of the dismissed workmen where no reference was made even 7 years after such
dismissal, but also reveals that the Supreme Court can give direction to the government
to make a reference where the refusal to make a reference was not germane or relevant.

Under Sub-section (1) of Section 33 B, power is conferred upon the state government by
order in writing to withdraw any proceeding under the said Act pending, inter alia before an
industrial tribunal and transfer the same to another tribunal for disposal of the proceeding.
When a proceeding is transferred from one tribunal to the other tribunal, the tribunal to
which the proceedings is so transferred may either proceed de-novo or from the stage at
which the proceeding is so transferred, subject to any special direction which may be given
to it in the order of transfer.
The power conferred upon the government under the aforesaid Section is an
extraordinary power. The conferment of this power raises a question whether the
requirement of giving recourse in the transfer order under Section 33B is mandatory or
directory? Conflicting views were expressed by the high courts. While the Punjab High
Court91 held itto be directory, the Allahabad92 and Calcutta93 High Courts took the opposite
views. The controversy was resolved by the Supreme Court in Associated Electrical Industries
(India) Private Ltd v. The Workmen. 94 In this case, no reason was mentioned in the order in
which reference was withdrawn from one industrial tribunal and transferred to another. The
order merely stated that it was expedient to withdraw the reference from one tribunal and
transfer the same to another. The Supreme Court found it not amounting to a statement of
reason as required under Section 33 B. The statement of reason must be complied with both
in substance and in letter. To say that it is expedient to withdraw a case from one tribunal
and transfer it to another is not to give any reason as required by the Section. Normally,
when an individual dispute is referred to an industrial court or tribunal, it is said to be
tried before the court and tribunal and so the power of transfer can be exercised only for
sufficient reasons.

A. The Context
Section 36 A empowers the appropriate government to refer any question to the labour
court, tribunal or national tribunal on being satisfied that the difficulty or doubt has arisen
as to the interpretation of any provisions of an award or settlement. It further provides that

91 Aeron Steel Rolling Mills v. State of Punjab, (1959) 1 LLJ 73 (Punjab}; Aeron Steel Mills v. State of
Punjab, AIR 1960 Punjab 55; See also Prabhudayal Himat Singh v. State of Punjab, AIR 1959 Punjab
460; Workmen of New Eqerton Woollen Mills v. State ofPunjab, (1967) 2 LLJ 686 (Haryana and Punjab).
92 Bharat Bhushan v. State of Industrial Tribunal, 6 FJR 278 (Allahabad}.
93 Shree Shiv Sakti Oil Mills Ltd v. Second Industrial Tribunal, (1961) 2 LLJ 36 (Calcutta).
94 Associated Electrical Industries (India) Private Ltd v. The Workmen, (1961} 2 LLJ 123 (SC}.
 Powers of the Appropriate Government• 393

when such a question is referred to, it shall, after giving the parties an opportunity of being
heard, decide such question and its decision shall be final and binding on all such parties.
The provisions of Section 36 A, however, raises several problems. (i) What is the scope
of reference under Section 36 A? (ii) What is the significance of the expression' after giving
the parties an opportunity of being heard'? (iii) Whether fresh evidence can be adduced by
the parties under Section 36A? Let us examine these problems.

B. The Judicial Response

1. Scope of Reference Under Section 36 A. Section 36A, namely, 'if, in the opinion of the
appropriate government, any difficulty or doubt arise as to the interpretation of any provision
of an award' ... imposes a condition for making a reference. If the words used in any provision
of an award are ambiguous or obscure and it is not reasonably possible to interpret them,
the difficulty arising from the use of such ambiguous or obscure words, may be resolved by
moving the appropriate government to make a reference under Section 36A. Where there
is no difficulty or doubt about their meaning, the tribunal may refuse the direction of the
government. All that can be referred under this Section by the appropriate government
to the labour court, tribunal or national industrial tribunal is about the interpretation of
any provisions of the award already made. 95 However, a reference cannot be made by
the appropriate government in order to supplement the original award. 96 Further, a fresh
question (which may be referred under Section 10) is not permissible under this Section. 97
Moreover, the tribunals have no jurisdiction if an order of reference as framed by the
appropriate government is not in accordance with the provisions of Sections 36A. 98
The other question was considered in Rivers Steam Navigation Co. v. Inland Steam
Navigation Workers Union 99 wherein the Calcutta High Court observed that Section 36A
excludes the jurisdiction of civil court unless, recourse be had in the first instance to get the
dispute referred to the tribunal for interpretation. Explaining this, Justice Mookerjee held that
if the recourse had been taken by the parties under Section 36A, nothing and not even the
government's view would bar the civil court's jurisdiction to interpret the award. 100
2. Significance of the Expression 'After Giving the Parties an Opportunity of Being
Heard'. Coming to the second question, it might be noted that Section 36A (2) of the Act
imposes upon tribunals a duty to give the parties an opportunity of being heard. In other
words, to give notice to the parties is a condition of assuming jurisdiction.101 Bengal Coal
Company Ltd v. Central Government Industrial Tribunal 102 provided an opportunity to the
Patna High Court to delineate the meaning of the expression 'after giving the parties an

95 Britannia Engineering Co. Ltd v. Basil Mazumdar, (1961} 2 LLJ 310 at 311 (Calcutta).
96 Ibid.
97 Id at 312.
98 Ibid.
99 Rivers Steam Navigation Co. v. Inland Steam Navigation Workers Union, (1964} 1 LLJ 98 (Calcutta).
100 The question of interpretation of the award would be concluded on its final determination by

the special tribunal under Section 36A, but if, for any reason, the reference thereunder is not or
fails to be, effective or proves infructuous, it may still be open to the aggrieved party to approach
the civil court for the purposes of the aforesaid interpretation (See Rivers Steam Navigation
Co. v. Inland Steam Navigation Workers Union, op. cit.).
101 Rivers Steam Navigation Co. v. Inland Steam Navigation Workers Union, op. cit.
102 Bengal Coal Company Ltd v. Central Government Industrial Tribunal, (1962} 2 LLJ 414 (Patna).
394 • Industrial Relations and Labour Laws

opportunity of being heard' occurring under Sub-section (2) of Section 36 A of the Act.
Explaining the meaning of the phrase, the Patna High Court observed that the tribunals
are obliged to give the parties to the original award, or the appellate award as the case may
be, an opportunity of being heard. In other words, the industrial tribunals are required to
give notice to the parties before them to decide a question of inter-relation referred to it by
the appropriate government under Sub-Section (2) of Section 36 A. 103
3. Fresh Evidence. The third question is whether fresh evidence can be adduced by the
parties before the tribunal under Section 36 A. This question was negatived by the Punjab
High Court in Atlas Cycle Industries Ltd v. State of Punjab 104 wherein the Court observed
that it was not necessary or even proper to record evidence for the purpose of interpreting
a document. 105
To sum up, it is significant to note that Section 36 A enables the tribunal only to clari~
the provisions of its award where any difficulty or doubt arises about its interpretation. 1 6
The scope of the inquiry under Section 36 A is limited to the decision of the difficulties or
doubts arising as to the interpretation of any provision in the award. 107 The question about
the 'propriety, correctness or validity of any provision of the award' is outside the purview
of the inquiry under Section 36A. 108 Further the Tribunal under Section 36B is not authorised
to 'review or modify its own order.' 109

Section 38 empowers the appropriate government to make rules for the purpose of giving
effect to the provisions of this Act in general and in particular:
(a) The powers and procedure of conciliation officers, boards, courts, labour courts,
tribunals and national tribunals including rules as to the summoning of witnesses, the
production of documents relevant to the subject-matter of an inquiry or investigation,
the number of members necessary to form a quorum and the manner of submission
of reports and awards;
(aa) the form of arbitration agreement, the manner in which it may be signed by the
parties, the manner in which a notification may be issued under sub-section (3A)
of Section lOA, the powers of the arbitrator named in the arbitration agreement
and the procedure to be followed by him;

103 Id. at 417.

104 Atlas Cycle Industries Ltd v. State of Punjab, (1962} 1 LLJ 536 (Punjab).
105 Id. at 544.
106 Kirloskar Oil Engines Ltd v. Its Workmen, (1962} 2 LLJ 675.
107 Id. at 677.
108 Ibid.
109 Section 36B of The Industrial Disputes (Amendment) Act 1982 provides: Where the appropriate

government is satisfied in relation to any industrial establishment or undertaking or any class of

industrial establishments or undertakings carried on by a department of that government that
adequate provisions exist for the investigation and settlement of industrial disputes in respect of
workmen employed in such establishment or undertaking or class of establishments or undertakings
it may, by notification in the official gazette, exempt conditionally or unconditionally such
establishment or undertaking or class of establishments or undertakings from all or any of the
provisions of this Act.
 Powers of the Appropriate Government• 395

(aaa) the appoinbnent of assessors in proceedings under this Act;

(b) the constitution and functions of and the filling of vacancies in works committees, and
the procedure to be followed by such committees in the discharge of their duties;
(c) the salaries and allowances and the terms and conditions for appoinbnent of the
presiding officers of the labour court. Tribunal and the national tribunal including the
allowances admissible to members of courts, boards and to assessors and witnesses;
(d) the ministerial establishment which may be allotted to a court board, labour court,
tribunal or national tribunal and the salaries and allowances payable to members of
such establishment;
(e) the manner in which and the persons by and to whom notice of strike or lockout may
be given and the manner in which such notices shall be communicated;
(f) the conditions subject to which parties may be represented by legal practitioners in
proceedings under this Act before a court, labour court, tribunal or national tribunal;
(g) any other matter which is to be or may be prescribedY 0
The aforesaid rule-making power of the appropriate government is regulated by
previous publication of such rules and laying down such rule before the state legislature
where the appropriate government is a state government or before both houses of the
Parliament where Central Government is the appropriate government. Every rule made by
the Central Government shall be laid, as soon as maybe after it is made, before each house
of the Parliament while it is in session for a total period of 30 days which may be comprised
in one session or in two or more successive sessions, and if, before the expiry of the session
immediately following the session or the successive sessions aforesaid, both houses agree
that rules should not be made, the rule shall thereafter have effect only in such modified
form or, be of no effect, as the case may be. But any such modification or annulment will not
affect the validity of anything done under the rule before the modification or annulment.
The appropriate government is also empowered to provide for rules for imposing penalty
not exceeding f50 in case of contravention of rules framed by it. The rules made under
the Act have the same force as the provision of the Act provided, of course, they are not
contrary or repugnant to the statute under which they are framed. A statutory rule has to
yield to the main provision of the Section of the Act and the same is true with regard to
rules framed under the provisions of the Industrial Disputes Act, 1947.

Section 39 (a) empowers the Central Government where it is the appropriate government
by notification to delegate its powers to any of the following authorities:
(i) any officer or authority subordinate to the Central Government; or

110 TheIndustrial Disputes (Amendment) Act, 1982 provides that in Sub-section (2) of Section 38 of
the principal Act, after clause (aaa}, the following clause shall be inserted, namely:
(ab} the constitution of grievance settlement authorities referred to in Section 9 C, the manner in
which industrial disputes may be referred to such authorities for settlement, the procedure to be
followed by such authorities in the proceedings in relation to disputes referred to them and the
period within which such proceedings shall be completed.
396 • Industrial Relations and Labour Laws

(iz) any officer or authority subordinate to the state government as specified in the
notification.
Likewise, Section 39 (b) empowers the state government (where it is the appropriate
government) to delegate its powers by notification to (a) an officer, subordinate to the state
government or; (b) an authority subordinate to state government. While delegating the
power, the state government may prescribe the conditions subject to which the power shall
be exercisable by the authority concerned.
Where a notification is issued under Section 39 clarifying that powers exercisable
by the Central Government in relation to cement industry shall be exercisable by state
government, it is competent for both Central and state government to make a reference
of dispute regarding contract of labour of cement industries. In such a situation, reference
made by state government was a valid reference.11 1

Section40(1) empowers the appropriate governmentto add to the First Schedule any industry
which it considers to be expedient or necessary and on issuance of such notification, the
First Schedule shall be deemed to be amended. Similarly, under Section 40(2), the Central
Government is empowered to add to or, alter or amend the Second or the Third Schedules
and on such notification, it shall be deemed to be amended accordingly. However, this
power is regulated by the laying provision before the appropriate legislatures.

Section 9 B of the Act empowers the appropriate governmentto exempt any class of industrial
establishments, or any class of workmen employed in any industrial establishment from
the application of the provisions of Section 9A of the Act. Such exemption may be granted
if the appropriate government is of the opinion that the application of the provisions of
Section 9A to any class of industrial establishment or to any class of workmen employed
in any industrial establishment (i) affects the employers in relation thereto so prejudically
that such application may cause serious repercussion on the industry concerned; and
(ii) that public interest so requires.
Where the appropriate government grants the exemption, it must notify in the official
gazette. Further, it is required to specify in the notification that the provision of Section 9A
shall not apply or shall apply subject to such conditions, which must be specified in the
notification itself. Thus, the exemption granted may either be absolute or limited, but in
any case, the limitation must be specified in the notification.

111 Shri Yovan, India Cements Employees Union v. Management of India Cements Limited, (1994) Lab.IC 38.
Instruments of
Economic Coercion 19
In general, labour's instruments of economic coercion comprise such workers' action or
omission, in furtherance of an industrial dispute which threaten or inflict financial loss on
the management. They put management under economic pressure to accept the (industrial
dispute) demands of workers.
Likewise, management's instruments of economic coercion comprise such
management's action or omission, in furtherance of an industrial dispute which is resorted
to with the objective of inflicting financial loss on the labour so that they would rather accept
management's terms than suffer irreparable financial loss. Further, in harmony with the
view 'no work, no payment', the closing of a place of employment or suspension of work
or the refusal by an employer to continue to employ any number of persons employed by
him is the means adopted to put the requisite economic pressure.
The activities may assume various forms, e.g., withdrawal of labour and quarantines of
labour, raw material, customer, dealer or any combination of these. Further, the withdrawal
of labour or the quarantine may be total or partial.

Looking back from the vantage point of the year 2012, it appears as commonplace to
appreciate that capital, raw materials, tools and labour are essential prerequisites for
industrial production. The owner of any one or more of these ingredients yields a vital
economic power subject to the prevailing environmental conditions. He can use this power
to his advantage in negotiating with the owner or owners of the other ingredients, the terms
and conditions for the supply of that which he owns. In particular, withholding of labour
until stated terms and conditions of employment are conceded, is a potent instrument of
economic coercion.
Though the use of the term 'strike' to describe workmen's instrument of economic
coercion in labour management relations is relatively of recent origin, the strategy of
withholding labour as an instrument of economic coercion has been known for several
398 • Industrial Relations and Labour Laws

centuries. Indeed, prohibition, direct or indirect or withholding labour as an instrument of

economic coercion is not unknown.

A. Statutory Definition
Section 2(q) of the Industrial Dispute Act, 1947 (IDA) defines 'strike' to mean:

a cessation or 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.
Judicial delineation of the aforesaid expression of 'strike' is confusing, inadequate and
inapt. While some of these may be the result of imprecise legislative definition, ignorance
of the facts of industrial life and lack of policy-oriented approach have also contributed to
the prevailing confusion.
The shortcoming of the definition became a matter of concern. It raises several issues:
(i) Who goes on strike? (iz) Against whom do they go on strike? (iii) What are the acts which
constitute strike? (iv) Why do they go on strike?
1. Who Goes on Strike? The Industrial Disputes Act does not specifically mention as
to who goes on strike. However, the definition of strike itself suggests that 'strikers' must
be: (a) persons (b) employed (c) in any industry (d) to do work.
2. Against Whom They Go on Strike? Strike, we have already seen, is called by persons
employed in any industry. Further, it is an instrument of economic coercion. It seeks to
deprive an 'employer' of labour input and thereby, diminish through loss of production,
his earning capacity in the hope that the resulting economic strain would compel him to
come round to the strikers' point of view. If this analysis is correct, it follows that the person
against whom strike is called must be an employer. Further, the statutory regulation of
strikes, namely:
No person employed in a public utility service shall go on strike, in breach of contract:
(i) without giving to the employer notice of strike. 1
Read with Rule 71 of the rules framed under Section 30 Office Act and the prescribed
form, makes it clear that a 'strike' is called againstthe 'employer', at least, the Act is concerned
with only those strikes that are called against 'employers'.
3. The Element of Combination. The definition recognizes concerted action under
common understanding on the part of strikers as an essential element of strike.
The expression' concerted' action indicates that it has been planned, arranged, adjusted
or agreed on and settled between parties acting together pursuant to some design or scheme.2
The emphasis in strike is on acting together and not on pre-planning or pre-arranging: the
parties who resort to strike may come to a common understanding at the time in question
without any formal agreement or consultations, but nevertheless the concerted action must
be collectively combined on the basis of esprit de corps and must be combined together by
the community of demands and interest with a view to compel employer to accede to their

1 Section 22 (1).
2 Shamnagar Jute Factory v. Their Workmen, (1950) LLJ 235 (IT).
 Instruments of Economic Coercion • 399

demands of wages, bonus, allowances, hours of work, holidays and the likes. The length
or duration of the 'concerted' action is immaterial. 3
(a) Judicial delineation of statutory provisions:

(i) The concept of acting in combination or a concerted refusal or a refusal

under a common understanding.
The Tribunals and Courts have had several4 opportunities to delineate the contours
of the expression:
acting in combination, or a concerted refusal or refusal under a common understanding.
The emerging picture, however, is hardly satisfactory. Generally speaking, conceptual
interpretations have been superseded by literal interpretation.
(iz) The conceptual interpretation. In Shamnagar Jute Factory v. Their Workmen 5, the tribunal
observed:

The words, 'acting in combination' mean that the body of persons employed
must be shown to be acting in combination, with their psychology directed to a
particular end, namely, the cessation of work ... and ... that the cessation of work
was the direct common object of the body of persons acting in combination.
For instance, if a factory is on fire, the body of workers should be expected
to run simultaneously for safety and leave their work thus bringing about a
cessation of work. Under such circumstances, the body of workers may be said
to be acting in combination in so far as they would be acting conjointly and
simultaneously more or less for the purpose. But such a cessation would not
amount to a strike, for the simple reason that the object of the body of workers
under such circumstances would not involve a direct purpose of bringing
about a cessation of work, although the purpose actually pursued would have
the indirect effect of causing cessation of work and being of the opinion that
'workers were members of an unlawful assembly with the common object of
assaulting and overpowering the manager and the police party' held that the
conduct of the workmen did not amount to a strike. All that happened had the
indirect effect of causing a cessation of work ... there was, therefore, no strike.
Standard Vacuum Oil Co. v. Gunaseelan (M G)6 put an additional restriction, albeit from
a different angle. The workmen in this case, wanted '1st May' to be declared holiday so as
to enable them to celebrate 'May Day'. A protracted negotiation between management and
workmen followed. But the management were recalcitrant to declare '1 st May' as holiday.
The workmen threatened to go on strike, though on receipt of directives from the
All India Petroleum Workmen's Federation, the local Madras union (of which concerned
workmen were members), explicitly advised the concerned workmen to call off the
threatened strike. However, on the 1st of May, which was a half working day, workmen

3 D N Banerjee v. PR Mukherjee, AIR 1953 SC 58.

4 See for instance Buckingham and Carnatic Mills v. Their Workmen, (1951) 1 LLJ Suppl. 1, reversed
on appeal. (1951) 2 LLJ 314 but restored by Supreme Court, (1953) 1 LLJ (SC}; Standard Vacuum v.
Gunaseelan Oil Co., (1954) 2 LLJ 656.
5 Shamnagar Jute Factory v. Their Workmen, (1950) LLJ 235 (IT).
6 Standard Vacuum Oil Co. v. Gunaseelan (MG), (1954) 2 LLJ 656.
400 • Industrial Relations and Labour Laws

indulged in, what decision-makers called 'an ingenious activity'. Taking advantage of
the fact that leave was due to them, they en bloc put in individual applications for leave
and in anticipation of grant of such requested leave, left their work to join the 'May day'
celebrations. Union leaders had masterminded the strategy and advised workmen to put in
individual leave applications en masse. On these facts, a question arose whether the absence
of workmen en masse, amounted to a strike. The tribunal emphasized that:

in making applications for leave, they were submitting themselves to the

authority and control of company. They were expecting that the company
would act reasonably and would grant them the holiday in view of the past
precedents.
And being of the view that in strike 'the cessation to work or concerted refusal to work
must be in defiance of the authority of the employers'7 held that the conduct of concerned
workmen did not amount to strike (as the element of defiance was missing).
(iii) Literal interpretation. Buckingham and Carnatic Mills Ltd v. Their Workmen 8 is the
leading case on the subject. When the workmen of afternoon shift came to work at 3 p.m.,
they insisted for granting the leave (because the day shift workers had been granted leave
with pay) to celebrate solar eclipse. The management refused. Consequently, a large number
of workmen applied for leave. Management rejected all the leave applications and asked the
workers to go back to work. It is not clear from the report as to what happened thereafter
except that the workmen did not resume work until about 9 p.m. The tribunal held the
stoppage of work to be a strike. The labour appellate tribunal reversed the finding but the
Supreme Court restored it:

It cannot be disputed that there was a cessation of work by a body of persons

employed in the mills and that they were acting in combination and their refusal
to go back to work was concerted. All the necessary ingredients, therefore, of
the definition exist in the present case and the stoppage of work on 1 November
1948, amounted to a strike. 9
(b) The evidence required to prove 'combination' or 'concert' or 'common understanding'. The
mere absence from work does not amount to taking part in a strike. There ought to be some
evidence to show thatthe absence was due to some concert between him and other persons. 10
Proof of'combination' or 'concert' or' common understanding' is inevitably dependent
on proof of' common intention' or 'common object' and though the theoretical possibility of
direct evidence to prove 'common intention' cannot be eliminated, in practice, there cannot
be any direct evidence of 'common intention' except by an approver and the common
intention must be gathered from the circumstances. 11
In Delta Jute Mills Ltd v. Their Workmen 12, the workmen demanded Friday evening
and Saturday morning as a holiday to observe Muharram. The management declined to

7 Id. at 661.
8 Buckingham and Carnatic Mills Ltd v. Their Workmen, (1953) 1 LLJ 181 (SC).
9 Id at 183.
10 Ram Sarup v. Rex, AIR 1949 All. 218.
11 Delta Jute Mills Ltd v. Their Workmen, (1950) 2 LLJ 1054.
12 Ibid.
 Instruments of Economic Coercion • 40 1

grant them the requested holiday but agreed to declare the whole of Saturday as holiday.
Thereupon, workmen requested that they be paid wages on the morning of Friday and not
in the evening, as per practice. It was not clear from the report whether the management
conceded this demand. However, the workmen absented themselves en masse from the
afternoon shift on Friday. Even those few who turned up did not start work and the work
completely paralyzed. On these facts, it was held that there was a common intention to
remain absent from work in the afternoon shift on Friday.
In Sirka Colliery v. South Karanpura Coal Mines Workers' Union 13, the labour appellate
tribunal held that' ... The fact that none of the coal loaders and trammers attended on those
4 consecutive days and their total number was very large, about 2262, the 19 th ••• (and other
circumstantial evidence) leave no room for doubt that the cessation of work on those days
was concerted refusals under a common understanding.'
In Buckingham and Carnatic Mills Ltd v. Their Workers 14, the industrial tribunal observed
that the fact that very large number of leave applications were put in for various reasons
points to concerted action. The explanation given by the workers and their representatives
also indicates that they were acting in combination ... Their refusal to resume work in spite of
the attempts made by the officers and their own Madras Labour Union representatives shows
that they were not as a body prepared to resume work unless their demand was conceded.
The aforesaid findings of the tribunal were upheld by the Supreme Court.
In Lakshmi Devi Sugar Mills v. Ram Sarup 15 , the Supreme Court took notice of the
avowed intention of strikers not to resume work until their plan conceived at a meeting
held on the previous night was carried out, to come to the conclusion that there was a
'common understanding'. Moreover, tribunals16 have held that it is not necessary to prove
in 'combination and concert' that workers had any former consultation and thereby had
come to that decision.

B. Forms of Strike
Most of the cases present relatively simple instances of'cessation of work' 'refusal to continue
to work' or 'refusal to accept employment.'17

13 Sirka Colliery v. South Karanpura Coal Mines Workers Union, (1951) 2 LJ 52 (LAT). The strike was by
way of protest against the arrests made by police on account of clash and assaults occurring between
members of two rival unions.
14 Buckingham and Carnatic Mills Ltd v. Their Workers, (1951) 1 LLJ Supp. 1 (IT) on appeal (1953)
1 LLJ 181.
15 Lakshmi Devi Sugar Mills v. Ram Sarup, (1957) 1 LLJ 17(SC}.
16 Shree Meenakshi Mills v. Their Workmen, (1951), 1 LLJ 579, confirmed on appeal; JK Cotton Mills Spg.
and Wev. Mills Ltd v. Their Workmen, (1956) 2 LLJ 278.
17 Diamond Machinery Mfg. Works v. Their Workers, (1952) 1 LLJ 137 is perhaps the only case of its kind.
The management asked 14 of its moulders to do certain specified work. The moulders, however,
did not do the entire work despite the fact that they had been specifically informed of the urgency
of the work. They also did not report for duty after the lunch break. Next day, the manager issued
notices suspending each one of the concerned moulders for a period of 4 days and called for an
explanation of their conduct. The moulders themselves refused to take notice which,however, was
taken by their union secretary on their behalf. As a protest against the order of suspension of the
14 moulders, the remaining 63 workers in the establishment also left the workspot that day at lunch
break. The tribunal held that the 14 moulders were on strike along with the 63 workmen.
402 • Industrial Relations and Labour Laws

While negotiating for settlement of an industrial dispute, workmen may resort to

the use of instruments of economic coercion to get their point of view accepted by the
management. The workmen may remain at their respective home or at any place other than
the place of their work or may even be present near or within the premises or the place
of employment but not at their seats. However, difficult questions arise when workmen
deviate from traditional methods. What about stay-in-strike, pen-down strike, tool-down
strike, go-slow, hunger strike, sympathetic strike, and work-to-rule? Do these fall within
the meaning of the definition of strike18 as defined in Section 2 (q) of the IDA?
1. Stay-in-Strike, Sit-Down Strike, Pen-Down Strike, or Tool-Down Strike. Decision
makers19 and writers20 have used the expressions 'stay-in strike',21 'sit-down strike',22 'pen-
down strike"23 and 'tool-down strike'24 as synonyms of each other.
In Punjab National Bank Ltd v. Their Workmen,2 5 Mr Sabbarwal, a typist and secretary
of the Punjab National Bank Employees' Union of Delhi, applied for 7 days' leave. The
management declined to grant him leave. Even so, Sabbarwal absented himself from duty.
On resumption of duties, he was chargesheeted for absence without leave. However,
Sabbarwal refused to accept the show cause notice. The management thereupon sent it
to him by registered post and pending further inquiry, suspended him. Thereupon, the
employee's union instructed employees to stick to their seats and to refuse to work until
police intervened and threatened arrest or until orders of discharge or suspension were
served on them. The co-employees of Sabbarwal did this. Meanwhile, a turbulent crowd

18 The National Commission on Labour, while considering the adequacy or otherwise of the definition
of 'strike' under Section 2 (q) of the IDA declined to include concerted action such as 'go slow'
and 'work-to-rule' in the definition of 'strike'. According to the Commission, labour protest such
as 'go-slow' and 'work-to-rule' should be 'treated as misconduct or unfair labour practices under
the standing orders' (see the Report of the National Commission on Labour, 1969, 483.) The Industrial
Relations Bill, 1978 also did not include the aforesaid forms of labour protest in the definition of
'strike' under Section 2 (43).
19 See Punjab National Bank Ltd v. Their Workmen, (1959) 2 LLJ 666 (SC}; Sadul Textile Mills v. Their
Workmen, (1958) 2 LLJ 628 (Rajasthan); Hawrah Foundry Works v. Their Workmen, (1955) 2 LLJ 97
(IT}; Shalimar Works v. Their Workmen, (1955) 2 LLJ 395 (LAT}; Dalmia Cement Co. v. Their Workmen,
(1955) 2 LLJ 466 (LAT}.
20 These strikes were first used in the United States of America and France. The sit-down strike set its
foot on the Indian soil in April, 1939. The then Congress Government was hesitant to declare them
illegal. They attracted the attention of Indian judiciary in 1952. Early decision-makers held that it
was an invasion of the rights of the employer in the property of the mill. (See generally Dwarkadas
Kanji, Forty Five Years with Labour, 1962, 53.) But in Punjab National Bank Co. op. cit.,the Supreme
Court took a somewhat different view.
21 See Ludwig Teller, 1 Labour Dispute and Collective Bargaining 31 referred to and approved in Punjab
National Bank v. Their Workmen, op. cit., supra note 19. 666-87. See also Sadul Textile Mills v. Their
Workmen, op. cit. supra note 19. Chelpark Co. Ltd v. Commissioner of Police, (1967} 2 LLJ 836 (Madras);
Mysore Machinery Mfg. Co. Ltd v. State of Mysore, (1967) 2 LLJ 853, (Madras); Shalimar Works Ltd v.
Their Workmen, op. cit., Supra note 19 p. 363; Indian Machinery Co. v. Their Workmen, (1957) LAC 539;
Dalmia Cement Ltd v. Their Workmen, (1967} 2 LLJ 56 (LAT}.
22 Ibid.
23 See Punjab National Bank v. Their Workmen, (1959), 2 LLJ 666 (SC}.
24 See for instance, Lakshmi Devi Sugar Mill v. Ram Swaroop, (1957) 1 LLJ 17, 22 (SC}.
25 Punjab National Bank Ltd v. Their Workmen, (1952) 1 LLJ 531 (IT); on appeal (1952} 2 LLJ 648 and on
special appeal (1959) 2 LLJ 666 (SC}.
 Instruments of Economic Coercion • 403

gathered outside the premises of the bank. Some of the persons in the crowd shouted slogans
in support of the action of the employees. The management suspended 60 of the aforesaid
participating employees. This led to an industry-wide strike in Delhi and Uttar Pradesh.
The bank gave notice that unless the strikers resumed their duties by a specified date, they
would be treated as having voluntarily ceased to be employees and on their failure to report
for duty on the specified date, terminated the services of 150 of its employees after giving
them another chance to resume their duties.
On these facts, a question arose as to what is the nature of the employees' activities in
sticking to their seats but refusing to work. The Supreme Court recognized that the main
grievance of the bank was that the employees not only sat in their places and refused to
work but they did not vacate their seats when they were asked to do so by their superior
officers. However, it considered such an element of insubordination to be 'a different matter'
and not relevant for interpreting the definition of 'strike'.
The Court also rejected the contention that the impugned activity amounted to criminal
trespass:

... there are two essential ingredients which must be established before criminal
trespass can be proved against the employees. Even if we assume that the
employees' entry in the premises was unlawful or that their continuance in
the premises became unlawful, it is difficult to appreciate the argument that
the said entry was made with intent to insult or annoy the superior officers.
The sole intention of the strikers obviously was to put pressure on the bank to
concede their demands. Even if the strikers may have known that the strike may
annoy or insult the bank's officers, it is difficult to hold that such knowledge
would necessarily lead to the inference of the requisite intention ...26
And on a plain and grammatical construction of the definition held:
Refusal under common understanding to continue to work is a strike audit in
pursuance of such common understanding the employees entered the premises
and refused to take their pens in their hands, that would no doubt be a strike
under Section 2 (q). 27
We believe that the emphasis on literal interpretation resulted in ignoring the
conceptual understanding of the phenomenon known as strike and in encouraging
undesirable activities.
2. Go-Slow. Often workers deliberately slow down the pace of production. There is
no 'cessation of work' or 'refusal to continue to work' or 'refusal to accept employment'.
But, nevertheless, the economic implications are very serious as the cost of production goes
up, delivery schedule gets upset and very often, raw material and machinery are adversely
affected.
Workers adopt this practice to circumvent the statutory restrictions. 28 On go-slow,
however, when they are disciplined for misconduct, they assert that the practice amounts

26 Punjab National Bank Ltd v. Their Workmen, (1959) 2 LLJ 666 at 685.
27 Id. at 684.
28 Sections 22, 23 & 10 (3).
404 • Industrial Relations and Labour Laws

to a strike.29 Obviously, they cannot be permitted to blow hot and cold at the same time.
But, then the all important question is whether this practice, popularly called 'go-slow' is a
'strike'? The definition of a 'strike' uses the phrases 'cessation of work', 'refusal to continue to
work' and 'refusal to accept employment.' These phrases are not qualified by the expression
'total' or 'partial'. 30 But in Bharat Sugar Mills Ltd v. Jai Singh,31 Justice Das Gupta, speaking
for the Supreme Court observed:

Go-slow which is a picturesque description of deliberate delaying of production

by workmen pretending to be engaged in the factory is one of the most
pernicious practices that discontented or disgruntled workmen sometime
resort to. It would not be far wrong to call this dishonest. For, while thus
delaying production and thereby reducing the output, the workmen claim to
have remained employed and thus to be entitled to full wages. Apart from
this also, 'go-slow' is likely to be much more harmful than total cessation of
work by strike. For, while during a strike much of the machinery can be fully
turned off, during the 'go-slow', the machinery is kept going on at reduced
speed which is often extremely damaging to machinery parts. For all these
reasons 'go-slow' has always been considered a serious type of misconduct. 32
The aforesaid view was reaffirmed in Bank of India v. T S Kelawala 33 wherein the
Supreme Court observed:

... go-slow is a serious misconduct being a covert and a more damaging breach
of the contract of employment. It is insidious method of undermining discipline
and at the same time a crude device to defy the norms of work. It has been
roundly condemned as an industrial action and has not been recognized as an
legitimate weapon of the workmen to redress their grievance.
3. Hunger Strike. Hunger strike is a strike 34 with fasting by some or all strikers35 or even
outsiders super added to exert moral force or perhaps what may be more aptly described
as coercion, for acceptance of the demands. Its usage, however, is complicated because, like

29 See for instance, Firestone Tyre and Rubber Co. of India Ltd v. B. Shetty, (1953) 1 LLJ 599. (LAT); This
view was upheld by the Bombay High Court in (1954) 1 LLJ 281.
°
3 Clause 2 (34) of the Industrial Relations Bill, 1978 has defined 'strike', inter alia, to mean: total
or partial cessation of work by a body of persons employed in any industrial establishment or
undertaking... (emphasis added).
31 Bharat Sugar Mills Ltd v. Jai Singh, (1961) 2 LLJ 644 (SC).
32 Id at 647.
33 (1990) 2 RSJ I at 15 (SC).
34 In Katkona Colliery Western Coalfields Ltd v. Central Gavernment Industrial Tribunal cum Labour Court,
Jabalpur, (1978) Lab. IC 1531 the High Court of Madhya Pradesh held that 'if hunger strike is not
simply refraining from taking food but is also accompanied by cessation of work by a body of
persons employed in any industry, the same would obviously come within the definitions of strike.'
35 Pipraich Sugar Mills v. Their Workmen, (1956-57) XFJR4113 (LAT). Certain workmen who held key
posts in the factory went on a hunger strike on a holiday at the residence of the managing director
of the factory and continued to do so on other working days. On these facts, the labour appellate
tribunal held that the mere fact that the hunger strike was staged on ... a holiday, does not reduce
the essential characteristics of strike from this hunger 'satyagraha' for the intention of the strikers
was to continue it till their demands were met or till they die of starvation.
 Instruments of Economic Coercion • 405

the word strike, it is used to describe all protest fasts, whether or not the particular protest
activity is in furtherance of an industrial dispute. 36
4. Lightning or Wildcat Strike. The characteristic feature of this type of withdrawal
of labour is that the workmen suddenly withdraw their labour and bargain afterwards. 37
Such strikes are prohibited in public utility services under the Industrial Disputes Act,
194738 and all industrial establishments in public utility services in UP, Maharashtra, CP and
Gujarat, where notice is required to be given. Further, the standing orders of the company
generally requires for notice. Since no notice is required in industrial establishments other
than public utility concerns, a question arises whether such a strike in such a situation
would be a misconduct or unjustified strike. These questions have been the subject-matter
of judicial controversy.
In Swami Oil Mills v. Their Workmen 39, certain workmen resorted to sudden lightning
strike allegedly on failure of the government to refer the dispute to the tribunal. The question
for consideration with respect to strike was whether it was illegal or unjustified. The tribunal
held that the strike was not illegal and unjustified but observed:
It must be conceded that a sudden lightning strike, such as the one in question,
without any previous notice to the management, cannot be looked upon as
quite proper ...
In Sadul Textile Mills v. Their Workmen 40, certain workmen struck work as a protest
against the lay-off and the transfer of some workers from one shift to another without giving
four days' notice provided by Standing Order 23. On these facts, a question arose whether
the strike was justified. The industrial tribunal answered it in affirmative. Against this, a
writ petition was preferred in the High Court of Rajasthan. Reversing the decision of the
tribunal, Justice Wanchoo observed:
... we are of opinion that what is generally known as a lightning strike like this
takes place without notice and each worker striking (is) guilty of misconduct
under the standing orders and liable to be summarily dismissed (as) the strike
cannot be justified at all.
5. Work-to-Rule. In this form of concerted activity, employees, though remaining on
job, do the work literally in accordance with rules or procedure laid down for the purpose,
decline to do anything not mentioned therein, take all permissible time of the job, and do
the work in such a manner that it results in dislocation of the work. Usually rules of work
are stretched and followed in such a manner that under the shelter of complying with rules,
the very purpose of these rules, namely, harmonious working for maximizing production
is frustrated. In these tactics, the workers literally work according to rules but in spirit they
work against them. Though they are called 'work to rule' tactics, in substance they amount
to work against rule tactics.

36 Thus, students are said to be on hunger strike to press their demands against educational authorities;
political leaders are said to be on hunger strike to compel the government to redress their grievances
and various sections of community are said to be on hunger strike in support of their stand against
various authorities or bodies.
37 Kothari, Labour Law and Practice, (1964), 66.
38 Section 22.
39 Swami Oil Mills v. Their Workmen, (1953) 2 LLJ 785.
40 Sadul Textile Mills v. Their Workmen, (1958) 2 LLJ 628 (Rajasthan}.
406 • Industrial Relations and Labour Laws

These tactics are generally employed as an alternative to a traditional strike particularly,

where traditional strike cannot be called. Whatever may be the form of compliance of
the rules and whatever may be the outward manifestation, in substance, the conduct of
employees amounts to compliance in a manner not commensurable with the prevailing
normal practice and in harmony with expectations then entertained, it amounts to bringing
about unilateral changes in the working system by the employees and it is a misconduct for
which the employer is justified in taking action.
In USA, these tactics are recognized as a form of strike. But, in India they are not
covered by the definition of 'strike'. As in go-slow, so here, there is no 'stoppage' of work.
Again for the very reason because of which we are against extension of definition of' strike'
to include go-slow, we are also against inclusion of work-to-rule within the ambit of' strike'.
The (Second) National Commission on Labour has recommended that work-to-rule must
be regarded as misconduct.

C. Why Do Workmen Go on Strike

We have already seen that the Industrial Disputes Act, 1947 defines' strike'. A question arises
whether strike is a means to achieve ends other than getting time-off or an end in itself,
i.e., to get time-off on the very day the workmen indulge in cessation of work. Further, if
strike is merely a means to an end, whether the three forms of withdrawal of labour, viz.,
'cessation of work', 'refusal to continue to work' and 'refusal to accept employment' are
means to further 'trade dispute objectives' of the participants or even to achieve political
and other non-trade dispute objectives.

D. Judicial Response
1. Withdrawal of labour as a coercive measure to achieve non-trade dispute objectives
is not a strike. In Goodlass Wall Co. v. Amir Ahmad Bakoor Khan 41 , the workmen's union
requested the management to close the factory for half a day to mourn the death of
Marshal Stalin which was refused by the management. Thereupon, a large majority of
workers kept away from work after the lunch break. On these facts, a question arose
whether the conduct of workmen amounted to a strike. The labour appellate tribunal
upheld the decision of the tribunal that there was a 'concerted refusal to work' and,
therefore, a 'strike' and opined:

It is not correct to say that cessation or stoppage of work, unless it is caused

by virtue of an industrial dispute, is not a strike under Section 2 (q) ... of the
(Industrial Disputes) Act. There is nothing in the scheme of the Act or the
provisions thereof, to show any compelling necessity to add any such words.
In Matchwel Electricals Company v. Chief Commissioner42 , the workmen of the company
along with workers of various other industries stopped work to protest the intervention
of the Central Government in dismissing the Kerala Ministry in August 1959. The tribunal

41 Goodlass Wall Co. v. Amir Ahmad Bakoor Khan, (1954) 2 LLJ 573 confirmed on appeal, (1956) 1 LLJ
468 (LAT).
42 Matchwel Electricals Company (India) Ltd v. Chief Commissioner, (1962) 1 LLJ 545 (Punjab).
 Instruments of Economic Coercion • 407

held the stoppage to be a strike. The company sought the intervention of the High Court
under Article 226 of the Constitution. Justice Gosain conceded:

It is true that the strike in question was a sort of political strike and was
not, in any way, connected with any grievance of the workmen against the
management of the company, but nevertheless held the stoppage to be a strike
and, on this point, confirmed the decision of the tribunal.
It is difficult to agree with these decisions. It is true that in India, stoppages of work
to express one's resenbnent has been the order of the day in the political arena ever since
1921 and these work stoppages are popularly called strikes: indeed, political leader's call
is for a strike. Even so they are not strikes within the meaning of the law relating to labours
management relations and whatever their merits under conditions of foreign rule, the
earlier we isolate labours management relations from them in independent India, the better
it would be for all concerned.
But quite apart from policy considerations, the aforesaid work stoppages is not a
strike within the meaning of the Industrial Disputes Act, 1947 because of the absence of the
element of purpose, namely, to further trade disputes with employers.
2. Withdrawal of labour as a means to an end in itself i.e., as a means to get time-off
on a particular day, is not a strike. In Shree Meenakshi Mills v. Their Workers 43, a workman
died while he was working on a loom. His co-workers, without informing the management,
left the work post and proceeded to attend the funeral ceremony of the deceased co-worker.
The result was that the work was stopped. The labour appellate tribunal upheld the decision
of the tribunal that the stoppage amounted to a strike.
In Jeewan Dallo v. Metal Box Co. 44, the workmen requested the management to close the
factory on 14th, the last day of Ganesh Chaturthi, for half a day. The management refused.
On 14th, 35 workers did not report for work after the lunch recess, and further 323 workers
walked out of the factory and did not report for afternoon shift. On these facts, the tribunal
held that there was cessation in concert, so strike.
In Upper India Couper Paper Mills v. Their Workmen 45, the management directed workmen
(due to the exigencies of work) to do work on a listed holiday and offered compensatory
holiday (which was in accordance with prior agreement). Workers refused to work. The
labour appellate tribunal held the resulting stoppage of work to be a strike.
In Dalmia Cement Co. v. Chaniah46, the management (due to exigencies of work) informed
20 workmen individually on Saturday the 16th that on Sunday the 17th (a weekly off-day)
they had to report for work and they will get off-day on another day. The workmen did not
turn up. On these facts, the conduct of workmen was held to amount to a strike.

43 Shree Meenakshi Mills v. Their Workers, (1951) 1 LLJ 579, confirmed on appeal (1951) 2 LLJ 516.
44 Jeewan Dallo v. Metal Box Co., (1952) 2 LLJ 869.
45 Upper India Couper Paper Mills v. Their Workmen, (1954) 2 LLJ 347 (LAT).
46 Dalmia Cement Co. v. Chaniah, (1955) 1 LLJ 599 (IT}.
408 • Industrial Relations and Labour Laws

A. Elements of Picketing
Several elements comprise picketing. There is, for instance: (a) element of freedom of speech
and expression to the extent to which the communication of facts and views are involved;
(b) element of freedom of movement to the extent to which picketers remain stationary or
indulge in movement; (c) element of freedom of association to the extent to which picketing
involves group activity; and (d) element of freedom to carry on trade, profession or business
to the extent to which the activities may be designed to improve the working conditions
of the workers and adversely affect the corresponding right of the management or non-
picketing workers. All these elements may not be concurrently present in each and every
picketing. Events often quickly move from a phase involving some of these elements to
another involving other of these elements.

B. Picketing may be a Permissible Weapon

Picketing affects business and business is property. Frankfurter and Greene have indicated,
in their classic treaties, the Labour Injunction 47, the American judiciary's response to picketing.
Whether or not picketing was illegal under the common law, may be open to serious debate. But
there is no doubt that in British India, early regulations and statutes which directly or indirectly
rendered strikes illegal and exposed strikers to criminal prosecution also rendered picketing
an offence, both in specified industries as well as generally. The Indian Penal Code affected
picketing through abebnent, criminal intimidation, criminal restraint and among others,
breach of contract. Since 1930, picketers could also be prosecuted for criminal conspiracy.
The Criminal Law (Amendment) Act, 1932, further affected picketing. The relief given by the
Trade Unions Act did not extend to condoning such acts in furtherance of a trade dispute as it
amounted to an offence. Trade Disputes Act, 1929 further affected inciting, abetting or acting
in furtherance of an illegal strike was an offence-a position which is preserved under the
1947-IDA even though the concept of an illegal strike has undergone a revolutionary change.
Even at the risk of repetition, it may be reiterated that picketing in support of a legal strike, or
picketing in the absence of any strike whatsoever is not necessarily legal. Even today, in order
to maintain its legality, picketers' conduct must steer clear of the aforesaid provisions of the
IPC and the Criminal Law (Amendment) Act, 1932, but this may not be easy.
The Indian Constitution added another dimensions to the problem. To the extent to
which picketing involves elements of freedom of speech, movement, association and trade,
profession or business and to the extent to which the State is enjoined from taking away the
freedom, that law cannot adversely affect picketing.

C. Picketing and Right to Freedom of Speech

Section 7 of the Criminal Law Amendment Act, 1932 prohibits obstruction of access and
intimidation of persons or employees or loitering at places of residence or business with
the intent of deterring others from entering or approaching or dealing at such places. The
constitutional validity of the section was challenged in Damodar Ganesh v. State48 and Vimal

47 See Frankfurter and Greene, Labour Injunction, (1930).

48 Damodar Ganesh v. State, AIR 1951 Born. 459.
 Instruments of Economic Coercion • 409

Kishore Malhotra v. State of Uttar Pradesh. 49 In the former case, a dispute arose between
Bombay Mill Owners' Association and employees of various member mills regarding bonus.
The state of Bombay referred the dispute to the industrial court, Bombay which gave an
award. Against the award, the management preferred an appeal to the then labour appellate
tribunal. During the pendency of appeal before the labour appellate tribunal, the employees
of various mills commenced a strike and posted some of the workers near the gates of the
mills, where they distributed leaflets to the non-strikers. The petitioner did not intimidate
any workers. Further, they were behaving in such a manner that their acts were sufficient
to deter the workers from going on strike. These picketers were convicted under Section 7
of the Criminal Law Amendment Act, 1932. Aggrieved by the order, the picketer-accused
filed a revision application before the Calcutta High Court. It was, inter alia, contended
before the High Court that the provisions of Section 7 were contrary to Article 19 (1) (a) and
(d) of the Constitution and, therefore, void under Article 13 of the Constitution. The Court
rejected the contention and observed:

Peaceful picketing, as indulged in by the petitioners before us, can affect only
two rights which have been given by the Constitution, viz., the right of freedom
of expression and the right to move freely throughout the territory of India.
A restriction has been imposed only on the latter right by Section (1) of the
Criminal Law Amendment Act whether it is accompanied by the exercise of
the former right or not. If the Section had imposed restriction on both rights
then it would have been necessary to justify both the restrictions in the light
of the other clauses of Article 19 of Constitution. But in this case, restriction
is placed only on the right to freedom of movement of the petitioner without
any abridgement of their exercise of any other fundamental right. 50
Vimal Kishore Malhotra v. State of Uttar Pradesh 51 is another case in point. In this case,
certain workers of textile mills at Kanpur went on strike. The strike lasted for several weeks.
One of the general secretaries of the union was arrested under Section 7 of the Criminal
Law Amendment Act, 1932. It was proved that while one Janardan Pandey and other (non-
strikers) were going to the mills, the petitioner in the course of picketing said to the strikers,
'Note these men. They are rebels. They will not listen to verbal persuasion, until their hands
and feet are broken.' These words according to the Court amounted to criminal intimidation
made punishable by Section 506 IPC. Against the order of arrest, the petitioner Vimal Kishore
Malhotra preferred a writ petition under Article 226 of the Constitution for a direction of
writ in the nature of habeas corpus. It was, inter alia, contended by the petitioner that Section
7 of the Criminal Law Amendment Act, 1932 was ultra vires the Constitution. The Court
held that Section 7 was inter vires the Constitution at least so far as is it related to the charges
against the petitioner. But the Court did express an opinion about the constitutionality of
peaceful picketing and observed:

Section 7[of the] Criminal Law Amendment Act prohibits several acts. It may
be that prohibition of some of these acts is unconstitutional. But it does not
follow that prohibition of other acts also is unconstitutional. It is possible to
separate the valid part from the invalid parts. So assuming (without deciding)

49 Vimal Kishore Malhotra v. State of Uttar Pradesh, AIR 1956 Alld. 56.
50 Damodar Ganesh v. State op. cit., 463.
51 Vimal Kishore Malhotra v. State of Uttar Pradesh supra note 49.
41 o • Industrial Relations and Labour Laws

that certain parts of sub-section (1) of Section 7 of the Act are ultra vires the
Constitution, the entire Section 7 cannot be condemned on that ground.
In Simpson Group Companies Workers & Staff Union v. Amco Batteries Ltd52, the Karnataka
High Court held that the right to picket is a very intangible one which is closely limited by
the equal right of others to go about their lawful affairs free from objection, molestation or
intimidation. The methods of persuasion are limited to oral and visual methods, i.e., the use
of voice and exhibition of placards and should not be extended to physical obstruction of a
vehicle or a person which would be illegal. Accordingly, the workers may resort to peaceful
picketing, i.e., the marching to and fro before the premises of an establishment. They may be
accompanied by the carrying and display of signboards, placards or banners bearing statements
in connection with the dispute. They may also politely request the employees not to assist in
the running of the business and ask the customers not to patronize that establishment. Such
acts would constitute peaceful picketing and are protected under Section 18.
Pickets are, however, not entitled to (z) compel people to listen to them or to obstruct by
deliberately standing in their way or catching hold of their arms (iz) obstruct passage of vehicles
by lying down on the highway in front of them or otherwise blocking the highway and (iii)
pester those persons who do not wish to listen to them and who have requested them to desist.

D. Picketing and Freedom of Movement

Article 19(1) (d) of the Constitution guarantees to every citizen the right to move freely
throughout the territory of India, This right, however, does not protect loitering at or near a
place where such person or member of his family resides or works or carries on business.53
A question therefore, arises whether Section 7 of the Criminal Law Amendment Act, 1932
or other law curtails the freedom of movement by making a mere exercise of the right of
freedom of movement penal under certain circumstances. Upholding the same, the Bombay
High Court in Damodar Ganesh v. State54 observed:
In testing, therefore, the validity of Sec. 7 of the Criminal Law Amendment
Act, we have to see whether this restriction on freedom of movement, viz.,
loitering under certain circumstances accompanied by the requisite intention
is justified by Cl. (5) of Art. 19 of the Constitution.
The Court continued:
If even in this extreme form-without curtailment of any other fundamental
right-the section is good as contended by the learned Advocate General, it
cannot be bad if, the act prohibited is accompanied by certain other aggravating
circwnstances which bring into play other fundamental rights, which the section
is not designed to restrict. If loitering simpliciter (under certain circumstances
can validly be made an offence, then such loitering accompanied by verbal
utterances or distribution of pamphlet cannot be any the less an offence, merely
because the offender is exercising other fundamental rights and uttering slogans.

52 1992 Lab. IC 414.

53 Raj Narain v. State, AIR 1961 Mad. 531.
54 Damodar Ganesh v. State, ap. cit., AIR 1951 Born. 459.
 Instruments of Economic Coercion • 411

E. Picketing and Freedom of Association

If picketing is resorted to in combination by a number of workers or involves group activity,
it may well raise the question of freedom of association. Thus, Article 19(1) (c) of the
Constitution guarantees to all citizens the right to form associations and unions. This right
is, however, subject to reasonable restrictions in the interest of public order and morality.
For instance, if workers resort to picketing which endangers public peace, or interferes
with the maintenance of public order or the administration of law, it is not protected under
Article 19 (1) (c).In other words, Article 19 (1) (c) does not include the right to picketing.
However, Section 7 of the Criminal Law (Amendment) Act prohibits mere loitering with
certain intention and places restriction on picketing.

A. Nature and Concept of Gherao

The word 'gherao' is to be found in several of the Indian and Persian languages and
literally means encirclement.55 It is used to describe certain activities of workers in labour-
management relations and is of recent origin.
In the 1960s gherao became the most potent weapon in the hands of workers. Its use
spread throughout the length and breadth oflndia and found a special niche in West Bengal56
where ironically it, for the first time, lost its legitimacy in 1968.

B. Gherao is an Instrument of Physical, not Economic Coercion

In Jay Engineering Works v. State of West Bengal57, Chief Justice Sinha observed:

A 'gherao' is not an offence as such mentioned in the Indian Penal Code. But it is
an act indulged by labour against the management and where it is accompanied
by confinement, restraint or other offences under the criminal law of the land,
the fact that it is done by members of a trade union, and used as an instrument
of collective bargaining, gives rise to no special treabnent or exemption from
liability under the law. All workmen guilty of wrongfully restraining any
person belonging to the management, or wrongfully confining him, during a
gherao are guilty under Section 339 or 340 of the Indian Penal Code.

55 In the dictionary compiled by Jananendra Mohan Das, the word, 'gherao', is stated to have been
derived from the Hindi word 'ghera' and means 'covered or encircled'. It is also mentioned that
the word 'gher' is derived from the Sanskrit word 'ghari' which means 'to cover or to encircle'.
The word 'gherao' in this sense has been mentioned in 'Chalantika' and in the 'Bishwakosh'. In the
Sanskrit English Dictionary by Dr Monier Williams Boden, Professor of Sanskrit in the University
of Oxford, the Sanskrit word 'gher' (ghrihyate-Yitam) means to cover. In Williams's Glossary of
Legal Terms 'gher' or 'gherao' or 'gherana' are Persian words which mean surround, encircle, fence
or to bind a hedge. In Richardson's Persian-Arabic Dictionary we come across the Persian word
'ghera' which means 'confinement, not free'.
56 See Govt. of India, Annual Report of the Ministry of Labour of 1967-68 13.
57 Jay Engineering Works v. State of West Bengal, AIR 1968 Cal. 407.
41 2 • Industrial Relations and Labour Laws

We might add that gherao also comes within the term 'mischief' of Section 7 of the
Criminal Law Amendment Act, a fact which was overlooked by the Court. Indeed it appears
that even scholars have failed to notice the legality of gherao under the aforesaid provisions.
Further, gherao may also fall within the purview of 'criminal intimidation' under Section
503 IPC.
Interestingly, the workers tried to escape the consequence flowing from the aforesaid
declaration of illegality of gherao by pointing out that gherao was a concerted activity and
consequently they were immune from action under Section 17 of the Trade Unions Act,
1926. But, the Court rejected the contention:
Where there is concerted intention to commit an offence, it amounts to criminal
conspiracy under Section 120A of the Indian Penal Code and is not saved by
Section 17 of the Trade Unions Act, 1926.
We agree that an act which is legal if done individually, may become illegal, if done
by persons acting in combination. But an act which is illegal, if done by an individual does
not become legal when done by persons acting in combination.
The (First) National Commission of Labour deprecated the technique of gherao as an
instrument of coercion and observed:

We endorse this view and deprecate resort to gheraos which invariably tend
to inflict physical duress on the person(s) affected and endanger not only
industrial harmony but also create problems of law and order. If such means
are to be adopted by labour for realization of its claims, trade unions may come
into disrepute. It is the duty of all union leaders, therefore, to condemn this
form of labour protest as harmful to the interests of the working class itself.
Gheraos cannot be treated as a form of industrial protest. In the long run, they
may affect national interest.58
The (Second) National Commission on Labour also recommended that 'Go-slow' must
be regarded as misconduct.

A. Nature and Concept of Bandh

It is a Hindi word which means 'closed' or 'locked'. 'The expression therefore conveys an
idea that everything is to be blocked or closed'. Bandh is distinct and different from a general
strike or hartal.59

B. Bandh is Illegal and Unconstitutional

In Bharat Kumar K Palicha v. State of Kerala 60, the petitioners sought for a declaration that
calling for and holding of bandh is unconstitutional as it is violative of the fundamental rights
guaranteed to them under Articles 19 and 21 of the Constitution. The full bench of the Kerala

58 See Government oflndia, Report of National Commission on Labour, (1969) 328.

59 Bharat Kumar K. Palicha v. State of Kerala, AIR 1997 Ker. 291 at 295.
60 AIR 1997 Ker. 291.
 Instruments of Economic Coercion • 413

High Court upholding the contention declared bandh to be illegal and unconstitutional.
On appeal, the Supreme Court in Communist Party of India (M) v. Bharat Kumar and others 61
upheld the decision of the High Court. The Supreme Court, while approving the distinction
between a bandh and strike made by the High Court upheld the judgement of Kerala High
Court. The High Court gave following reasons in support of its conclusions:
(a) The call of bandh implies a threat to the citizen that any failure on his part to honour
the call would result in either injury to person or injury to property and psychological
fear against defiance.
(b) A citizen is coerced not to attend his work or prevented from going out for his work
or from practising his profession or carrying on his business which is a violation of
his fundamental right at the instance of others when a bandh is called and held.
(c) The calling of bandh entails the restriction of free movement of the citizen and his right
to carry on his vocation.
(d) No political party has a right to call for bandh on the plea that it is the fundamental
right of freedom of speech and expression. Moreover, nothing stands in the way of
political parties calling for a general strike or hartal accompanied by express or implied
threat of violence to enforce it. It is not possible to accept that the calling of a bandh
alone could demonstrate the protest of a political party.
(e) The High Court has jurisdiction under Article 226 of the Constitution to grant
declaratory relief to the petitioner regarding the right of political parties to call for a
bandh and to enforce it.
(f) No political party or organization can claim that it is entitled to paralyze the industry
and commerce in the entire state or nation and is entitled to prevent the citizens not
in sympathy with its viewpoint from exercising their fundamental rights or from
performing their duties for their own benefit or benefit of the State or nation. Such a
claim would be unreasonable and could not be accepted as a legitimate exercise of a
fundamental right by a political party or those comprising it.
(g) The political parties and organizations which call for such bandh are liable to
compensate the government, the public and private citizens for the loss suffered by
them for such destruction. The State cannot shirk its responsibility of taking steps
to recoup the loss from the sponsors and organizers of such bandhs.
The aforesaid view was reiterated in T K Rangrajan v. Government of Tamil Nadu. 62

C. No work No Pay for Absence during Bandh

In Management of Nagammal Mills Ltd v. Kumari Mavatta Noorppalal Thozilalar Munnetra
Sangam 63, the state government called a Bandh. But the management did not declare it a
holiday. Certain workmen did not report for work. The employer, therefore, did not pay
them wages on the principle of 'no work, no wages'. On these facts, a question arose whether
the denial of payment of wages to workmen absenting themselves from duty was justified.
The Madras High Court answered the question in affirmative. The Courtruled:

61 (1997) (7) SCALE 21.

62 2003 (6) SCALE 84.
63 1999 LLR 24.
414 • Industrial Relations and Labour Laws

If an employee wants to show his protest in issue either at the instance of any
external force or by himself and thereby he is not attending the work, during
which period he has to work according to the terms of the employment, he
must be ready to forgo the wages for the said period. When holding bandh
itself is against the interest of the nation, can the government or its authorities
direct the employers to declare that as holiday with wages. Even if it is so, as
has been done in this case, such direction would be nothing but illegal. In this
case the government had also declared holiday in support of the bandh which
is nothing but supporting illegality and unconstitutional activities.
The Court added:

In this case, it is factually found, which is not in dispute, that only with a
view to participate in the bandh, the respondents absented themselves from
attending the work. So, they are not entitled for any salary as they did not
earn their wages. So any employer cannot be compelled to pay wages to such
employees for such period. Giving such direction would be adding premium
to the illegality and against the interest of the society.

The use of the term 'lockout' to describe employer's instruments of economic coercion dates
back to 186064 and is younger 65 than its counterparts in the hands of workers, i.e. strike, by
100 years. Formerly, the instrument of lockout was resorted to by an employer or group of
employers to ban union membership. The employers refused employment to workers who
did not sign a pledge not to belong to trade union. Later, a lockout was declared generally
by a body of employers against a strike at a particular work by closing all factories until
strikers returned to work. 66
India witnessed lockout 25 years after it was known and used in the arena of labour-
management relations in industrially advanced countries. Karnik reports that the first known
lockout was declared in 1895 in Budge Budge Jute Mills. 67

A. The Statutory Definition

Section 2 (1) of the Industrial Disputes Act, 1947 defines 'lockout' to mean:
The temporary closing of a place of employment or the suspension of work, or the
refusal by an employer to continue to employ any number of persons employed by him. 68

64 The first record of the use of phrase 'to strike work' occurred in 1768, at the beginning of Industrial
Revolution (See Knowles, Strikes - A Study of Industrial Conflicts), 1952, 2-3.
65 See Encyclopaedia Britannica, (1959) 467.
66 Ibid.
67 VB Kamik, Strikes in India, 1967, 13-14 citing the Bengal Administration Report (1895-96). Another
lockout of which reference is found in that of the one declared in Buckingham and Camatic Mills
in 1968, See VB Karnik op.cit., 97.
68 The Ind us trial Disputes (Amendment) Act, 1982 provides that in Section 2 (1) for the words 'closing
of a place of employment' the words 'temporary closing of a place of employment' be substituted.
 Instruments of Economic Coercion • 415

A delineation of the nature of this weapon of industrial warfare requires description

of (z) the acts which constitute it (ii) the party who uses it (iii) the party against whom it is
directed and (iv) the motive which prompts resort to it.

B. Judicial Response
Early decision makers Gudicial and quasi-judicial) generally69 declined to treat lockout
merely as an instrument of economic coercion. They emphasized deliberate omission of the
objective clause from the definition of lockout and gave a catch-all meaning to Section 2 (1)
of Industrial Disputes Act, 1947. In Sun Rolling Mills v. Their Workmen 70, Shri SN Modak
observed that:

... the definition under the Trade Disputes Act intended the concept of 'lockout'
to be restricted by certain words involving an element of intention on the
part of employer. Those restrictive words have been deliberately omitted
under the present Industrial Disputes Act and in my view, there is no room
for introducing any element of intention, either bona fide or mala fide in the
definition of lockout under the present Act.
And, in Bengal Jute Mills v. Their Workmen, industrial tribunal after explaining that: If
the legislature intended to convey that a lockout as defined by Section 2 (1) of the present
Industrial Disputes Act could not possibly cover a case of termination of employment, it was
for the legislature to say so in clear terms,71 held that the termination of service irrespective
of the intention of the employer, amounted to a 'lockout'. Other industrial tribunals adopted
the rule of literal interpretation to hold that cases of lay-off, retrenchment and closure of
business were also covered by the definition of lockout.
However, there is a catena of cases in which appropriate decision makers stressed that
lockout is essentially an instrument of economic coercion and the omission of the objective
clause did not change its meaning. The observation of the labour appellate tribunal in
Presidency Jute Mills Co. Ltd v. Presidency Jute Mills Co. Employees Union 72 is significant:

The definition of strike as given in the (Industrial Disputes) Act is the same as
that given in the Trade Disputes Act of 1929. Those definitions do not express
in terms refer to any reason behind the concerted action of the workmen, but
the very conception of strike is that it is a recognized weapon in the hands
of the workmen for enforcing their collective demands. The use of the term
'strike' necessarily implies that it has relation to a collective demand which
has not been acceded to by the employer. Lockout is the counterpart of strike,
the corresponding weapon in the hands of the employer to resist the collective
demands of workmen or to enforce his terms.

69 Empire of India Life Insurance Co. Ltd v. Their Employees, Labour Gazette, October, 1947187, Sun Rolling
Mills v. Their Workmen, (1949) LLJ 696; Ganges Jute Manufacturing Company Ltd v. Their Employees,
(1950) LLJ 10; Bengal Jute Mills v. Their Workmen, (1950) LLJ 437 (IT}.
70 Sun Rolling Mills v. Their Workmen, (1949) LLJ 696 (IT}.
71 Bengal Jute Mills v. Their Workmen, (1950) LLJ 437,440 (IT}.
72 Presidency Jute Mills Co. Ltd v. Presidency Jute Mills Co. Employee's Union, (1952) 1 LLJ 796 (LAT).
416 • Industrial Relations and Labour Laws

It referred to the Oxford dictionary to ascertain the meaning of the expression 'lockout'
and in rearbitration betweenMessers Richardson and Sumuel & Co.,73 where the court of appeal
in England had ascertained the meaning of the expression untramelled by any statutory
definition, to conclude that the very use of the word 'lockout' necessarily implied that the
act of the employer was prompted by reason of a dispute with his workmen. The labour
appellate tribunal conceded that the then objective clause had been deliberately omitted
by the Legislature but explained that the clause may have been dropped in the Industrial
Disputes Act for the reason that it was a surplusage and for the purpose of placing the
definition of lockout and strike textually on the same terms. It ruled that the omission was
not made by the legislature to indicate that the necessity of a nexus between the termination
of service and a trade dispute was not necessary nor was the intention of the employer
behind the discharge.74
The scope of the words used in Section 2 (1) in general and 'suspension of work' in
particular was delineated in Premier Automobiles Ltd v. GR Sapre. 75 The Premier Automobiles
Ltd had three plants located at Kurla, Kalyan and Wadala. The workmen of the first plant
resorted to go-slow and indulged in subversive activities as a protest against non-recognition
of union in these plants. Consequently, the management not only locked out the plant at
Kurla but also suspended the work at Kalyan. The labour court held that the stoppage of
work at Kalyan plant amounted to a 'lockout' and it was illegal inasmuch as the same was
resorted to without giving 14 days' notice as required under Section 22 (2) of the Act. The
management challenged this order in the Bombay High Court. The first question arose
whether the suspension and stoppage of work at Kalyan plant amounted to a 'lockout'. The
Court held that the definition was wide enough to cover every process of stopping the work.
The other question was whether the abrupt stoppage of work at Kalyan Plant from
16 December 1978 was aimed' at persuading' by a coercive process the employees to see the
employer's 'point of view' and accept their 'demand'. The Court held that even though no
demand as such was ever made by the employers against the workmen, it would be idle to
expect the employers to make express demands every time. In its view it would be enough
if any such demand can even be implied from the course of conduct. The Court accordingly,
held that such suspension of work at Kalyan satisfied the test laid down in Kaibetta's76 case
and amounted to a 'lockout'.
Earlier, the Supreme Court in Kairbetta Estate v. Rajmanickam77 upheld the interpretation
given in the Presidency Jute Mills case. In the instant case, the manager of the estate was
assaulted by some of the workmen as a result of which he suffered a fracture and was
hospitalized for a month. Other members of the staff were also threatened and they wrote
to the management stating that they were afraid to go to the affected division of the estate
as their lives were in danger. On receiving this communication, the management notified
that the affected division would be closed until such time as workmen gave an assurance
that there would not be any further trouble and that the members of the staff would not be
assaulted. Ind ue course of time, on the intervention of labour commissioner, the concerned
workmen gave the requisite undertaking and work was resumed. However, the affected

73 In rearbitration between Messers Richardson and Sumuel & Co., 77 LT, 479-77; L. T. 868 (QB).
74 Messers Richardson and Sumuel & Co., op. cit.
75 (1981) Lab. IC 221 (Bombay).
76 Kairbetta Estate v. Rajmanickam, (1960) 2 LLJ 275 (SC).
77 Ibid.
 Instruments of Economic Coercion • 41 7

workers claimed lay-off compensation for the period they had been locked-out. The
industrial tribunal granted the compensation. The management appealed to the Supreme
Court. Justice Gajendragadkar referred to the omission of the objective clause from the
1947-definition and added:

Even so, the essential character of lockout continues to be substantially the

same. Lockout can be described as the antithesis of a strike. Just as a strike is
a weapon available to the employees for enforcing their industrial demands,
a lockout is a weapon available to the employer to persuade by a coercive
process the employees to see his point of view and to accept his demands.
In the struggle between capital and labour, the weapon of strike is available
to labour and is often used by it, so is the weapon of lockout available to the
employer and can be used by him. The use of both weapons by the respective
parties must, however, be subject to the relevant provision of the (Industrial
Disputes) Act. 78
He concluded that this was a case of a lockout.
1. Disciplinary measure not lockout. Cases of indiscipline, misconduct and violation
of the provisions of the certified standing orders frequently occur in Indian industrial and
business undertakings. Disciplinary measures adopted by the management range from
adverse entry in the character roll to the termination of employment. We are concerned
here with only such management's actions which result in suspension of the concerned
workmen during the pendency of investigatory proceedings as a punishment or otherwise
either on payment of emoluments, or otherwise and all other cases resulting in refusal by
an employer to continue to employ any number of persons employed by him such as orders
prohibiting late-coming workmen to resume work and making them absent for the day.
The question here is whether these disciplinary measures which come within the literal
meaning of Section 2 (1) of the Industrial Disputes Act, 1947, amount to a lockout or not.
In Ram Naresh Kumar v. State of West Bengal,79 the management found certain ash-
coolies guilty of adopting go-slow tactics, disobedience and assaulting the chief engineer.
Since, however, an adjudication proceeding was pending, the management suspended the
concerned workmen and applied to the tribunal for permission to terminate their services.
The concerned ash-coolies claimed, in a writ petition, that the suspension amounted to
a lockout, that such lockout was illegal under Section 23 and that the tribunal had no
jurisdiction to entertain the application. However, the Calcutta High Court rejected the
petition on the ground that the suspension of workers in this case would not amount to a
lockout. Explaining this, Justice Ray observed:

Evidently, the order of suspension of eight ash-coolies does not amount to a

closing of the place of employment or to a suspension of work. The only part of
the definition therefore, which may conceivably cover the order of suspension
of eight ash-coolies is the last part. The order of suspension of the eight ash-
coolies was merely a provisional order which to my mind, can only mean a
suspension for the time being of the employment of these ash-coolies or a
provisional putting into abeyance of the position of these men as employees,

78 (1960) 2 LLJ 275 at 278.

79 Ram Naresh Kumar v. State of West Bengal, (1958) 1 LLJ 667 (Calcutta).
418 • Industrial Relations and Labour Laws

although it could not amount to a final termination of their employment. As

a matter of fact, the true effect of this order of suspension, provisional in its
character, cannot be estimated till the final order of dismissal or discharge or
refusal to dismiss or discharge is passed. So long as the final order is not passed,
it can only amount to a provisional putting into abeyance of the position of
the men suspended as employees. 80
While we agree that the suspension of workmen in this case was not about any lockout,
we do not at all agree with the implications of the aforesaid observation, namely, that if the
management had terminated the services of the ash coolies, its conduct would have come
within the ambit of Section 2 (1) of the Industrial Disputes Act, 1947. It might be mentioned
that, during a lockout situation, employer-workmen relationship subsists and where there
is a termination of service, that essential condition is lacking. 81 It is, accordingly submitted
that whereas in case of Bharat Barrel and Drum Mfg. Co. v. Their Workmen,82 the particular
disciplinary measure taken by the management results in termination of employer-workmen
relationship, the management action cannot fall within the mischief of Section 2 (1) of the
Industrial Disputes Act, 1947.
In Talchar Coalfields Ltd v. Talchar Coalfields Workers' Union 83, certain workmen arrived
late and were loitering near the pithead. They were refused permission to resume their
duties. On a question having arisen as to whether such refusal amounted to a declaration
of lockout, the labour appellate tribunal observed:

The point ... for consideration is whether the act of the manager in not allowing
the latecomers of the first shift to resume their duties was prompted by
reason of a collective dispute with the workmen. If the dispute arose in the
consequence of, that is to say, after the act of the manager, his act would not
amount to lockout. 84

° Continuing, he said:
8

In this view, even the last part of the definition of a lockout will not be satisfied by order of
suspension for the simple reason that as there was a temporary termination of their employment
or as these workers ceased, under the order of suspension, for the time being, to be the employees
of the company, by refusing to give them employment during the subsistence of that order, the
company cannot be said to have refused to give them employment during the subsistence of that
order or the company cannot be said to have refused to continue to employ men employed by it
or men who were still in its employment. There was thus no lockout ....
81 It will be observed that certified standing orders not only itemize various acts of misconduct but
also provide for the grievance procedure. Further, Section 33 of the Industrial Disputes Act places
certain restrictions on the management's right to take disciplinary action by way of dismissal.
However, there is no provisions of the law which entirely takes away the right of the management
to discipline their workmen. On the contrary, Section 33 specifically permits management to dismiss
erring workmen under stated circumstances. The reason for this freedom, albiet, regulated freedom,
is obvious. Total prohibition would encourage indiscipline and render day-to-day running of the
industry impossible. Under the circumstances, if we were to hold that dismissal is included within
the term 'lock-out' we would be defeating the very purpose of the Industrial Disputes Act, namely,
to keep the wheels of industry moving, besides rendering a part of Section 33 useless.
82 Bharat Barrel and Drum Mfg. Co. v. Their Workmen, (1952) 2 LLJ 532 (IT).
83 Talchar Coalfields Ltd v. Talchar Coalfields Workers Union, (1953) 2 LLJ 21 (LAT).
84 Ibid at 24.
 Instruments of Economic Coercion • 419

2. Security measure not lockout. Dicta in certain cases85 indicate that 'the closing of a
place of employment, or the suspension of work or the refusal by an employer to continue
to employ any number of persons employed by him' may be a security measure and yet
the conduct of the employer may fall within the ambit of Section 2 (1) of the Industrial
Disputes Act, 1947. For instance, in Lakshmi Devi Sugar Mills v. Ram Sarup 86, Justice Bhagwati,
summarizing the views expressed by labour appellate tribunal in Jute Workers' Federation v.
Clive Jute Mills, 87 observed that 'a lockout is generally adopted as a security measure and
may in certain cases be used as a weapon corresponding to what the employees have in the
shape of a strike.' This is unacceptable. Lockout is an instrument of economic coercion and
not a security measure. Lockout is not an end in itself but a means to an end. The particular
means adopted are the putting of economic pressures on recalcitrant workmen. Further,
in harmony with the view 'no work no pay', 'the closing of a place of employment, or the
suspension of work, or the refusal by an employer to continue to employ and number of
persons employed by him' is the means adopted to put the requisite economic pressure. The
emphasis here is due as much on the means adopted as on the object sought to be achieved.
The observation of Justice Aiyar in Shri Ram Chandra Spinning Mills Ltd v. State of
Madras 88 is more pertinent:

The lockout is the corresponding weapon in the armoury of the employer. If

an employer shuts down his place of business as a means of reprisal or as an
instrument of coercion or, as a mode of exerting pressure on the employees or,
generally speaking, when his act is that may be called an act of belligerency,
there would be a lockout. If, on the other hand, he shuts down his work because
he cannot for instance get raw materials or the fuel or the power necessary
to carry on his undertaking or because he is unable to sell the goods he has
made or because his credit is exhausted or because he (is) losing money, that
would not be a lockout. 89
The Kairbetta Estate90 case raised the reverse problem, namely whether layoff included
lockout so that locked-out workmen could claim lay-off compensation. The Supreme Court,
after discussing the scope of the expression 'any other reason' occurring in Section 2 (kkk)
and the provisions relating to lay-off compensation under Section 25C and Section 25E (iii)
of the Industrial Disputes Act observed:

Stated broadly, lay-off generally occurs in a continuing business, whereas a

lockout is the closure of the business, in the case of a lay-off owing to the reasons
specified in Section 2 (kkk), the employer is unable to give employment to one
or more workmen. In the case of lockout, the employer closes the place of the
business and locks-out the whole body of workmen for reason which have no
relevance to causes specified in Section 2 (kkk). 91

85 See Jute Workers Federation v. Clive Jute Mills, (1951) 1 LLJ 663; Lakshmi Devi Sugar Mills v. Ram Sarup,
(1957) 1 LLJ 17 (SC); Lord Krishna Sugar Mills Ltd v. State of Uttar Pradesh, (1964} 2 LLJ 76 (All.).
86 Lakshmi Devi Sugar Mills v. Ram Sarup, op. cit.
87 Jute Workers' Federation v. Clive Jute Mills, op. cit.
88 Shri Ram Chandra Spinning Mills Ltd v. State of Madras, (1957) 1 LLJ 90 (Madras).
89 Id at 92-93.
90 Kairbetta Estate v. Rajmanickam, (1960} 2 LLJ 275 (SC).
91 Id. at 278.
420 • Industrial Relations and Labour Laws

The Court concluded that lay-off compensation could not be granted to locked-out
workmen.
3. Closure not lockout. In Express Newspaper Ltd v. Industrial Tribunal9'2, Justice
Gajendragadkar indicated that:

... the main point which the tribunal will have to consider is whether the strike
of the (workmen) on 27th April 1959 was justified and whether the action of
the (management) which followed the said strike is either a lockout or amounts
to a closure. The (workmen) will contend that it is a lockout which is in the
nature of an act of a reprisal on the part of the (management) whereas the
(management) will contend that it is not a lockout but a closure, genuine and
bona fide.
And, such inquiry, his Lordship held, was within the competence of the industrial
tribunal.
The Supreme Court in General Labour Union (Red Flag) v. B V Charvan 93 was invited to
determine the distinction between lockout and closure. The Court laid down the following
tests. 94
[W]here the parties are at variance whether the employers have imposed a lockout
or have closed the establishment, it is necessary to find out what was the intention of the
employer atthe time when itresorts to lockout or claims to have closed down the industrial
undertaking. It is to be determined with accuracy whether the closing down of the industrial
activity was a consequence of imposing lockout or the owner/employer had decided to
close down the industrial activity.
In a lockout, the employer refuses to continue to employ the workmen employed by
him even though the business activity was not closed down nor intended to be closed down.
The essence of lockout is the refusal of the employer to continue to employ workman. There
is no intention to close the industrial activity. Even if the suspension of work is ordered, it
would constitute lockout. On the other hand, closure implies closing of industrial activity
as a consequence of which workmen are rendered jobless.
While examining whether the employer had imposed a lockout or had closed the
industrial establishment, it is not necessary to approach the matter from this angle that the
closure has to be irrevocable, final and permanent and that lockout is necessarily temporary
or for a period ...

... [T]he true test is when it is claimed that the employer has resorted to closure
of industrial activity, the industrial court in order to determine whether
the employer is guilty of unfair labour practice must ascertain on evidence
produced before it whether the closure was a device or pretence to terminate
services of workmen or whether it is bona fide and for reasons beyond the
control of the employer. The duration of the closure may be a significant fact
to determine the intention and bona £ides of the employer at the time of closure
but is not decisive of the matter.

92 Express Newspaper Ltd v. Industrial Tribunal, (1962) 2 LLJ 227 (SC).

93 (1985) 1 LLJ 82.
94 Id. at 83--84.
 Instruments of Economic Coercion • 421

The aforesaid judgement emphasizes the possibility of closure being mala fide and a
disguise for lockout. The argument might have had some force had it been before the' catch-
all' definition of 'retrenchment' which was incorporated in the Industrial Disputes Act, 1947.
It might have continued to have some force after the Supreme Court curtailed the meaning
of the statutory definition of retrenchment in Barsi Light Railway Co. 95 but it loses much of its
weight in the face of Sections 25F, 25FF and 25FFF. Managements, particularly employers
of large number of workmen in an old and established concern, can hardly act light-
heartedly or merely with a motive of malice. The economic implications of these provisions
are tremendous. Moreover, they render closure or transfer ineffective as an instrument of
economic coercion. The only lacuna in the law is that although on closure, a workman is
entitled to compensation, he is not, as in the case of retrenchment, entitled to re-employment
on re-opening. However, the decisions in Workmen of Dimakuchi Tea Estate v. Dimakuchi
Tea Estate96 and Working Journalists of the Hindu v. The Hindu 97 render it impossible for the
discharged workmen to claim re-employment on re-opening. Under the circumstances, so
long as these decisions lay down the law of the land, either Parliament should extend the
provisions of Section 25H, relating to re-employment of retrenched workmen, to cover cases
of transfer and reopening after closure or it should be settled by an award.
4. Discharge not lockout. In Feroz Din v. State of West Bengal 98, a company dismissed
from its service four employees for taking part and instigating others to join in an illegal
slow-down strike in the hot mills section of its workshop which was a public utility concern.
On such dismissal, the slow-down strike, instead of abating, gained strength. The company
thereupon issued a notice to the concerned workers that unless they voluntarily recorded
their willingness to operate the plant to its normal capacity they would be considered 'to
be no longer employed by the company'. In pursuance of this notice, some of the workers
only recorded their willingness: majority of the workers did not respond at all. The company
thereafter issued a second notice, inter alia, stating that the workers who did not record
their willingness to work in the plant to its normal capacity in terms of the first notice,
were being considered as being no longer in service, but their formal discharge from the
company's service was being kept pending in order to ensure that no one who wanted to
work normally was discharged on circumstantial assumptions; calling upon the workers to
record their willingness, by a certain date, to operate the plant to its normal capacity; and
intimating that names of those who did not comply with the aforesaid request would be
removed from the company's roll and their discharge would become fully effective with
all the implications of a discharge. Consequent on this second notice, the entire body of
workers except those engaged in the essential services, went on strike.
Thereafter the company, with the permission of the government, filed a complaint
under Section 27 of the Act against some of the workmen for having instigated and incited
others to take part in an illegal strike. The magistrate found that the charge established
and convicted the workmen under the said section. On appeal, the additional session
judge confirmed that order and a petition to the High Court by way of revision also failed.
The workmen then appealed to the Supreme Court. They argued that the discharge of
the workmen under the aforesaid two notices amounted to a lockout; that such a lockout

95 Barsi Light Railway Co. Ltd v. Joglekar, (1957) 1 LLJ 243 (SC).
96 (1958) 1 LLJ 500 (SC).
97 (1961) 1 LLJ 288 (SC).
98 Feroz Din v. State of West Bengal, (1960) 1 LLJ 244 (SC).
422 • Industrial Relations and Labour Laws

was illegal because it was declared in a public utility service without complying with the
provisions of Section 22 of the Act, that the strike which was in pursuance of an illegal
lockout was legal; and that conviction of workmen under Section 27 of the Act was
contrary to law as they had not instigated or participated in any illegal strike. However,
the Supreme Court rejected the plea. Justice Sarkar who delivered the judgement for the
Court observed:

The Act treats strike and lockout on the same basis. It treats one as the
counterpart of the other. A strike is a weapon of the workers while a
lockout is that of the employer. A strike does not, of course, contemplate the
severance of the relation of employer and employed. It would be surge in
these circumstances, if a lockout did so .... the words 'refusal by an employer
to continue to employ any number of persons employed by him' in Section
2 (1) do not include the discharge of an employee. We feel no difficulty in
taking this view, for it does not seem to us that the words 'refusal to continue
to employ' in Section 2 (1) plainly include a discharge. These words have to
be read with the rest of the definition and also the word 'lockout'. The other
parts of the definition contemplate no severance of the relation of employer
and employee. 99
The Court held that discharge was not covered in Section 2 (1) of the Act.
5. Refusal to Give Work to a Single Workman: in Case of a Lockout. Whether the
management's refusal to give work to a single workman amounts to a lockout within the
meaning of Section 2(1) of the Act. This question was answered in the negative in Singareni
Collieries Co. v. Their Mining Sirdars 100 wherein it was observed:

... the definition of the word 'lockout' in Section 2(1) of the Act does not mean
and include one workman, but means more than one, that is, a number of
workmen. On this interpretation, an individual workman is not included in
the word 'lockout' as defined in Section 2(1) of the Act.

A. No Fundamental Right to Strike

Article 19 (1) (c) of the Constitution declares that:
All citizens shall have a right ... to form associations or unions.
This right, however, is not absolute. Clause 4 of Article 19 provides that:
Nothing in sub-clause (c) of the said clause shall affect the operation of any
existing law in so far as it imposes, or prevents the State from making any law
imposing, in the interests of the sovereignty and integrity of India or public
order or morality, reasonable restrictions on the exercise of the right conferred
by the said sub-clause.

99 (1960) 1 LLJ 244 at 249.

100 (1967) 2 LLJ 472.
 Instruments of Economic Coercion • 423

In All India Bank Employees Association v. National Industrial Tribunal, 101 the Supreme
Court considered the aforesaid provisions. It, inter alia, ruled that:
... even a very liberal interpretation of sub-clause (c) of clause (1) of Article 19
cannot lead to the conclusion that the trade unions have a guaranteed right to
... strike, either as part of collective bargaining or otherwise. 102
The Court however, added:
the right to strike or the right to declare lockout may be controlled or restricted
by appropriate industrial legislation, and the validity of such legislation would
have to be tested not with reference to the criteria laid down in clause (4) of
Art. 19 but by totally different consideration.
Similarly, the Andhra Pradesh High Court in Andhra Pradesh Electrical Equipment
Corporation, Hyderabad v. Andhra Pradesh Electrical Equipment Corporation Staff Union 103 held
that the right to lockout or strike cannot be a fundamental rights as it is controlled by Sections
10 (3), 10 A (4A), 22 and 23 of the Act and the penal action is engrafted for disobedience of
the prohibition of lockout and strike under Section 26 of the Act. Hence, right to strike can
be stated to be merely a statutory right but not a fundamental right.
On the basis of this analogy, one may well bring the right to strike within the purview
of fundamental right. Thus, the Allahabad High Court in Uttar Pradesh Shramik Sangh
v. State ofUttar Pradesh 104 equated 'freedom of association' with 'freedom to pursue without
restrictions the objects of association', and observed:

The right to form an association is not a right to be exercised in a vacuum or

an empty or a paper right. The enjoyment and fulfilment of the right begins
with the fulfilment of the purpose for which the association is formed. 105
And the Supreme Court declared in Gujarat Steel Tubes v. GST Mazdoor Sabha 106:

The right to union, the right to strike as a part of collective bargaining and ...
the right of... the labour to pressurize ... the capital, to negotiate and render
justice are processes recognized by industrial jurisprudence. 107

B. Right to Strike under the Industrial Disputes Act

Though, the right to strike is not a fundamental right as such, it is open to a citizen to go on
strike or withhold his labour. The right to strike has been recognized under the Industrial

101 All India Bank Employees Association v. National Industrial Tribunal, AIR 1962 SC 171.
102 Id. at 181.
103 1986 Lab. IC 1851 (AP).
104 AIR 1960 All. 45.
105 Id. at 49.
106 (1980) 1 LLJ 137 (SC).
107 Id. at 168.
424 • Industrial Relations and Labour Laws

Disputes Act, 1947 by defining the circumstances under which a strike is to be regarded as
illegal. 108
Thus, the labour appellate tribunal in Ram Krishna Iron Foundry v. Their Workers 109 ruled:

The right to strike has been recognized by necessary implication in the

industrial legislation in India and express statutory provisions have been made
for the purpose of regulating it. It is thus a recognized weapon of the workmen
to be resorted to by them for asserting their bargaining power and backing up
their collective demands on an unwilling employer.11°
Again, in GR SM (W) Co. Ltd v. District Collector111 , the Kerala High Court summarized
the legal position of the workers' right to strike in the following words:

Though under the Constitution of India, the right to strike is not a fundamental
right as such, it is open to a citizen to go on strike or withhold his labour.
Every strike is not illegal and the workers in any democratic State have the
right to resort to strike whenever they are so pleased in order to express their
grievances or to make certain demands. A strike in the circumstances is a
necessary safety valve in industrial relations when properly resorted to. It is
a legitimate weapon in the matter of industrial relations.
In common law also the right to strike 112 cannot be taken away even if there are
standing orders abrogating their rights. To hold otherwise would be to interfere with the
fundamental right of employees to resort to strike as a means to enforce their demands
which falls within the subject of an industrial dispute.11 3
The Supreme Court in B R Singh v. Union of India 114 has observed that the right to strike
'though not raised to the high pedestal of a fundamental right... ... it is recognized as a mode of
redressal for resolving the grievances of workers. But the right to strike is not absolute under
our industrial jurisprudence and restrictions have been placed on it. These are to be found in
Sections 10 (3), lOA (4A), 22 and 23 of the Industrial Disputes Act, 1947.' The Court added:

The right to fonn associations or unions is a fundamental right under Article 19(1)
(c) of the Constitution. Section 8 of the Trade Unions Act provides for registration
of a trade union if all the requirements of the said enacbnent are fulfilled. The
right to form associations and unions and provide for their registration was
recognized obviously for conferring rights on trade unions. The necessity to form

108 Gwalior Rayon Silk Mfg. Co. v. District Collector, (1982} 1 LLJ 356 (Kerala); Buckingham and Carnatic
Mills Ltd v. Their Workmen, (1951) 2 LLJ 314-316 (LAT}; Amalendu Gupta v. LIC., (1982} 2 LLJ 332
(Calcutta).
109 Ram Krishna Iron Foundary v. Their Workers, (1954) 2 LLJ 372 (LAT}.
110 Id. at 373.
111 1982 Lab. IC 367. See also Coimbatore PDM. Sangam v. Sivakumar Transport, (1986} Lab. IC 1012
(Madras).
112 'There is nothing inherently unlawful or illegal in a strike...... common law permitted an employee

to stop work if he so desired'. See Raja Bahadur Motilal Poona Mills v. Mills Mazdoor Sabha, (1954)
1 LLJ124.
113 Id. at 71.
114 1990 Lab. IC 389 (SC}.
 Instruments of Economic Coercion • 425

unions is obviously for voicing the demands and grievances of labour. The trade
unions act as mouthpieces of labour. The strength of a trade union depends on
its membership. Therefore, trade unions with sufficient membership strength
are able to bargain more effectively with the managements. This bargaining
power would be considerably reduced if it is not permitted to demonstrate.
Strike in a given situation is only a form of demonstration. There are different
modes of demonstrations e.g., go slow, sit-in, work-to-rule, absentism, etc., and
strike is one such mode of demonstration by workers for their rights. The right
to demonstrate and, therefore, the right to strike is an important weapon in the
armoury of the workers. This right has been recognized by ahnost all democratic
countries. Though not raised to the highest pedestal of a fundamental right, it is
recognized as a mode of redress for resolving the grievances of workers.
The aforesaid right is available only to industrial workers and not to government
servants.

C. Interference of Court and Police

The Kerala High Court relying upon its earlier decision in C Kannan v. Superintendent of
Police 115 held that the Court should exercise great caution in dealing with an application for
police protection. Managements placed under very tying circumstances may have to seek the
assistance of the Court in obtaining orders for police protection. However, such orders should
not interfere with the rights of workers to carry on their agitation peacefully. In this connection,
the Court underlined the need for adopting Mahabna Gandhi's method of resistance. The
Court also pointed out that if the government decided not to step in the labour dispute with its
police power 'to tilt the balance in favour of the capital, the Court shall not act a spoke in the
wheel to interfere with such policy.' 116 At the same time, the Court cautioned that the police
could not be told thatthey should not take action when an offence was committed. The police
officer was answerable to law and to the law alone. If in the guise of peaceful satyagraha or
strike, cognizable offences were sought to be committed and violence was resorted to, police
should interfere. Police should certainly interfere if there was any imminent danger or peril
to life and property. But the right to strike conferred by the Act cannot be extended to non-
workmen because that would result in anarchy in the industrial society. 117
In Standard Chartered Bank v. Chartered Bank Employees' Union (Regd) 118, the High Court
of Delhi held that workmen's right to strike is not unlimited.' As the Indian citizens when
they want to exercise their fundamental rights to form a union and to have demonstrations
for the redressal of their grievances, they also have a reciprocal duty not to cause nuisance
or mental or physical danger to their employers and others.' The Court also held that if
the defendants comply with the provisions of sub-section (1) of Section 22, there could not
be any injunction in absolute terms to restrain them from exercising their right to go on
strike. Similarly, the using of badges or putting mask on the mouth or wearing some caps
indicating that they are going on strike, the court cannot restrain them from doing so if they
fulfil the provisions of Section 22.

115 1974 Ker. LT 516.

116 Id. at 361.
117 Kerala State Electricity Workers Federations v. Kerala State Electricity Board, (1983) 1 LLJ 435,442 (Kerala).
118 1996 LLR 418 (Delhi).
426 • Industrial Relations and Labour Laws

Strike has, however, an adverse effect upon production and upon the industry. It
is, therefore, desirable that it should be used 'as a last resort when all other avenues for
settlement of industrial disputes, have proved futile.' 119 The Supreme Court in Chandramalai
Estate v. Their Workmen 120 recognized that strike is a legitimate and sometimes unavoidable
weapon in the hands of labour.

D. Right to Demonstrate
In Kameshwar Prasad v. State of Bihar121 , the Supreme Court applied the theory of concomitant
rights to include demonstration under the constitutional guarantee of Article 19(1)(a) and 19
(l)(b): 'Article 19 (1) confers on all citizens the right by sub clause (a) to freedom of speech
and expression and by sub-clause (b) to assemble peacefully and without arms, and the
right to demonstrate would be covered by these sub-clauses'122 •
The Court added:
The approach to the question regarding the constitutionality of the rule should
be whether the ban that if imposes on demonstration would be covered by
limitation of the guaranteed rights contained in Article 19(2) and 19 (3). 123
The Court declared Rule 4A as unconstitutional insofar as it prohibited all
demonstrations, even those which were peaceful, if the Rule had been so framed as to prohibit
such demonstrations only as were likely to lead to a disturbance or public tranquility, it
would have been valid. But it prohibited even innocent demonstration and so it could not
be sustained under Article 19 (2) and (3).
Injunction against staging of demonstration: The Supreme Court in Railway Board,
New Delhi v. Niranjan Singh 124 held that exercise of this freedom will come to an end as soon
as the right of someone else to hold his property intervenes. However, use of badges, masks,
caps, and placards, to sit on relay hunger strike cannot be restrained. 125
A trade union can be restrained from holding demonstration, dharna, meeting, etc.,
within 100 metres from the factory or residential premises of the employer. 126
However, in Standard Chartered Bank v. Chartered Bank Employees' Union 127, the Delhi
High Court held that bank employees can be restrained from staging demonstration within
50 metres of the building.

E Government Servants' Right to Strike

The right of' government servants' to form association, hold demonstration and strike has
been questioned in a number of decided cases. Their position is somewhat anomalous.

119 See Ram Krishna Iron Foundry v. Their Workers, (1954) LLJ 516, 520 (LAT); See also Chandramalai
Estate v. Their Workmen, (1960) 2 LLJ 243 (SC).
12°Chandramalai Estate v. Their Workmen, op. cit.
121 AIR 1962 SC 1166.
122 Id. at 1168.
123 AIR 1969 SC 996. See also Sreekumar v. State of Kerala (1996) LLR 327.
124 Id. at 1168.
125 See Standard Chartered Bank v. Its Union, (1996) LLR 418 (Delhi).
126 Delhi Security Printer v. Hindustan Engg. and General Mazdoor Union (1996) LLR 714.
127 (1996) LLR 418.
 Instruments of Economic Coercion • 427

On the one hand, government servants like industrial workers have the guaranteed
fundamental right to form associations or unions and to demonstrate for redressal of their
grievances. On the other hand, unlike industrial workers, government servants generally
are charged with onerous responsibilities for operating essential and vital services to
the community. As such, they are expected to behave in a responsible manner without
resorting to concerted activity on the ground that strike would be tantamount to disloyalty
to the nation and the public. However, it is unfortunate that government servants have
in fact resorted to strike despite the prohibition provided by law. Government has tried
to regulate these activities through the Government Servants' Conduct Rules, Essential
Services Maintenance Ordinances, etc. For example, the President, in exercise of powers
conferred upon him by the proviso to Article 309, issued the Central Civil Services
(Conduct) Rules, 1955. Rule 4A of the Rules reads:

No government servant shall participate in any demonstration or resort

to any strike in connection with any matter pertaining to his condition of
service.

F. Right to Strike of Government Servants under the Constitution

The question whether government employees have a right to strike has consistently been
answered in the negative.
Meghraj v. State of Rajasthan 128 is one of the earliest cases on this point. In this case, the
validity of the Rajasthan Government Servants Conduct Rules129 was challenged. Justice
Wanchoo in the course of judgement observed:

... under our Constitution, the right to strike is not a fundamental right.
Kameshwar Prasad v. State of Bihar 130 is a leading case on this point. The petitioner
Kameshwar Prasad was an assistant in the public health engineering deparbnent. On
27 September 1956, the Governor of Bihar promulgated the (Bihar) Government Servants
Conduct Rules under proviso to Article 309 of the Constitution and inserted Rule 4A which
provided that:

No government servant shall participate in any demonstration or resort to any

form of strike in connection with any matter pertaining to their conditions of
service.
Aggrieved by such action, the petitioner filed a writ petition in the Patna High Court
under Article 226 of the Constitution challenging the validity of Rule 4A of the Bihar Service
Conduct Rules, on the ground that it interfered with the fundamental rights guaranteed to
the petitioner under Article 19 (1) (a), (b) and (c) of the Constitution. He demanded a stay
order to restrain the state of Bihar from giving effect to the Rule and desist from interfering
with his right to go on strike or to hold demonstration.

128 Meghraj v. State of Rajasthan, (1956) 1 LLJ 366.

129 Rule '22A of the Rajas than Government Service Conduct Rules provided that 'no government servant
shall resort to any form of strike for the purpose of securing redress of his grievances'.
130 Kameshwar Prasad v. State of Bihar, (1962) SCR 369.
428 • Industrial Relations and Labour Laws

The Patna High Court pointed out that Rule 4A prohibited only two methods of
showing their dissatisfaction by the government servants-'strike' and 'demonstration'.
Other reasonable methods remain open to them for purpose of ventilating their grievances,
e.g. making representations orally or in writing. The restrictions imposed by Rule 4A apply
only to one very important class of the community, namely government servants, who
occupy a very different position from those who are working in industries. Government
servants have a greater responsibility and status. Rule 4A, the Court held, had been
promulgated in the interest of public order within the meaning of Articles 19(2) and 19(4)
of the Constitution.
The petitioner then appealed to the Supreme Court. The Supreme Court did not fully
agree with the view of the Patna High Court in regard to the validity of Rule 4A and it
accepted the appeal only partially. The Court held that the validity of Rule 4A could not
be challenged insofar as it prohibited strike, but held the rule invalid in so far as it banned
all kinds of demonstrations. 131
In Ramrao Laxmikant Shirkhedkar and Others v. Accountant General Maharashtra 132, the
argument stood on a different footing. It was contended that the persons on whom the
prohibition of Rule 4A did not apply must be taken to have the right to strike. Disposing
to this question, the Bombay High Court observed:

It is true that so far as persons in industrial establishments are concerned, a

right to go on strike as a weapon to be used for implementing or enforcing the
demands is recognized before industrial tribunals called upon to adjudicate
between employers and employees. In our opinion, such a contention cannot
be availed of because there is no such right as a legal right to strike and, as
far as we are able to see, whether the strike should be prohibited in one form
or another according to the categories of employment in the government
service was a matter within the discretion and powers of the government as
an employer in framing rules.
0 K Ghosh and Others v. EX Joseph 133 is another case on this point. In this case, Joseph
was a clerk in the audit and accounts deparbnent at Bombay. He was the secretary of the
civil accounts association. The government withdrew recognition of the association but he
still continued to be its secretary. He was suspended from service and was served with a
chargesheet for having committed a deliberate breach of Rules 4A of the Central Civil Services
(Conduct) Rules, 1955. Deparbnental disciplinary proceedings were initiated against him.
The charges against him were mainly two-fold:

Firstly, he had infringed Rule 4A insofar as he participated actively in various

demonstrations organized in connection with the strike. He was also charged
for having organized meeting and instigating the staff to participate in the
strike by delivering inflammatory speeches.

131 JusticeAyangar while delivering his judgement, observed that Rule 4A of the Bihar
Government Servants Conduct Rules, 1956, has prohibited demonstration and strikes and no
government servant has any fundamental right to resort to any kind of demonstration and strike.
132 Ramrao Laxmikant Shirkhedhar v. Accountant General, Maharashtra, (1963) 1 LLJ 428 (Bombay)
133 0 K Ghosh and Others v. EX Joseph, AIR 1963 SC 814.
 Instruments of Economic Coercion • 429

Secondly, by continuing to remain on strike, the secretary of an unrecognized union

of government servants, he had infringed Rule 4B. Aggrieved by the order, he filed a writ
petition before the Bombay High Court under Article 226. He challenged the validity of
these proceedings on the ground that Rule 4A and Rule 4B were void as contravening the
fundamental rights guaranteed by Articles 19 (1) (a), (b), (c) and (g) of the Constitution.
The High Court held Rule 4B to be invalid but held Rule 4A to be valid as a whole. The
Court accordingly held that the deparbnental proceedings initiated against Joseph for
breach of Rule 4A were not valid. Against the decision of the Bombay High Court, Joseph
filed an appeal to the Supreme Court. The Supreme Court, following its earlier ruling in
the Kameshwar Prasad case, held that since there was no recognized fundamental right to
resort to strike, the Bombay High Court was in error in holding that the said rule was valid
in its entirety.
On 6 August 2003, a two-judge bench of the Supreme Court in T K Rangrajan v.
Government of Tamil Nadu and Others 134 delivered a momentous judgement on government
servant's right to strike. This decision has raised a lot of hue and cry among political parties
and trade unionists. 135
The Factual Background
In order to appreciate the decision, it is necessary to examine the relevant facts. In this case,
the government employees (including teachers of government-aided school and colleges)
went on an indefinite strike in pursuance of their demands relating to pension benefits
that had been curtailed on grounds of a resource crunch. The government of Tamil Nadu
first invoked the Tamil Nadu Essential Services Maintenance Act (TESMA), 2002 and then
promulgated an ordinance empowering the government with the power of summary
dismissal en masse, without giving the employees an opportunity to be heard. Accordingly,
the government of Tamil Nad u summarily dismissed about 1.7 lakh government employees
(including teachers) for participating in a strike under the Tamil Nadu Government Servants
Conduct Rules, 1973, Tamil Nadu Essential Services Maintenance Act, 2002 and Tamil Nadu
Ordinance No. 3 of 2003. The employees were also prevented from resuming their duties.
Quite apart from this, 2211 employees and their leaders were also arrested against whom
FIRs were registered and who had 'incited' the strike or 'indulged in violence'. Aggrieved by
this decision, the employees filed a writ petition under Article 226/227 of the Constitution
in the Madras High Court. The single Judge of the Madras High Court by an interim order
directed, inter alia, the state of Tamil Nadu (i) to keep in suspension the dismissal order issued
to the striking government employees until further orders, and (ii) to permit the employees
to resume duties forthwith in view of their undertaking to withdraw the strike and resume

134 (2003)
(6) SCALE 84.
135 TheCommunist Party of India (CPI), Communist Party India (Marxist), All India Trade Union
Congress and Centre of Indian Trade Unions have criticized the decision. They regard the Court's
decision as an assault on a basic constitutional guarantee. Bhartiya Janta Party and Indian National
Trade Union Congress require time to study the judgement. Some others described public servants
to be the 'laziest, most inefficient, corrupt lot in the world'. They feel that 'crippling essential
services is hardly exercising a fundamental right'. Some others observed 'bloated babudom of a
vital democratic home truth: Do not divorce the concept of right from responsibility or confuse
liberty with licence'. Still some others feel that it is 'a verdict that works'. [See the Hindu dt. August
8-9,.2003, 'Talking Point', Economic Times d t. 10.8.2003, Hindustan Times, New Delhi, August 7, 2003.
Times of India, New Delhi, August 8, 2003, 12 and 14].
430 • Industrial Relations and Labour Laws

duty. Aggrieved by this order, the state of Tamil Nadu filed an appeal before the division
bench of the Madras High Court challenging the interim order. A public interest litigation
was also filed on behalf of government employees wherein the validity of the Tamil Nadu
Essential Services Maintenance Act, 2002 and Tamil Nadu Ordinance No. 3 of 2003 were
challenged. The division bench of the High Court set aside the interim order and held that
without exhausting the alternative remedy of approaching the administrative tribunal, writ
petitions were not maintainable. It directed the state government employees to approach
the state administrative tribunal and not the Court. The Court also directed that those who
were arrested and lodged in jails be released on bail. Against this order, the employees filed
an appeal before the Supreme Court. The writ petitions were also filed before the Supreme
Court for getting the same relief.
Area of Conflict
The Supreme Court was called upon to decide the following issues:
(z) Was there any justifiable reason for the division bench of the High Court not to entertain
the petition on the ground the petitioner did not avail the alternative remedy provided
under the Constitution and the statute?
(ii) Is there any fundamental right to go on strike?
(iii) Whether the government servants have the right under any statute to resort to strike?
(iv) Is there any moral or equitable justification to go on strike?
(v) Whether the Tamil Nadu Essential Services Maintenance Act, 2000 and the Tamil Nadu
Ordinance No. 3 of 2003 were voilative of the provisions of the Constitution?

Power of the High Court to Exercise its Extraordinary Jurisdiction

The Supreme Court examined the order of the division bench of the High Court that the
writ is not maintainable because over 170,000 employees have not exhausted the alternative
remedy of approaching the state administrative tribunal provided under the Administrative
Tribunal Act. The Supreme Court found such refusal to entertain the writ petition to be
legalistic, particularly in an extraordinary situation where the government of Tamil Nadu
dismissed over 170,000 employees and the Tamil Nadu State Administrative Tribunal is
almost defunct as it has only the vice-chairman to run the same. The Court remarked that
it is unfortunate that the concerned authorities are not making the administrative tribunals
under the Administrative Tribunal Act, 1985, functional and effective by appointing men
of calibre and observed:

It is to be reiterated that under Article 226 of the Constitution, the High Court
is empowered to exercise its extraordinary jurisdiction to meet unprecedented
extraordinary situation having no parallel. It is equally true that extraordinary
powers are required to be sparingly used. The facts of the present case reveal
that this was a most extraordinary case, which called for interference by the
High Court, as the State Government had dismissed about two lakh employees
for going on strike. 136

136 Supra note 134.

 Instruments of Economic Coercion • 431

The Court conceded that no doubt it is true that the Supreme Court in L Chandra Kumar
v. Union of India 137 held that it is not open to the employees to directly approach the High
Court even where the question of vires of the statutory legislation is challenged. The
Court, however, added that this ratio should be read in the context of the question, which
was decided by the Supreme Court wherein it was contended that once the tribunals are
established under Article 323 A or Article 323 B, jurisdiction of the High Court would be
excluded. Negating the said contention, the Court in that case made it clear that jurisdiction
conferred upon the High Court under Article 226 of the Constitution is a part of inviolable
basic structure of the Constitution and it cannot be said that such tribunals are effective
substitute of the high courts in discharging powers of judicial review.
No Fundamental Right to Strike
The Supreme Court in the instant case ruled that there is no fundamental right to strike
as it has been well-settled in a series of cases decided by the Supreme Court. In order to
appreciate this ruling, it is necessary to examine the law on this subject. 138
Article 19(1)(a) of the Constitution provides:

All citizens shall have the right...to freedom of speech and expression.
The aforesaid right is subject to limitation prescribed under Article 19(2). The Supreme
Court, in Radhey Shyam Sharma v. The Post Master General Central Circle, Nagpur held that
there is no fundamental right to strike under the aforesaid article. Let us turn to examine
whether strike falls within the purview of Article 19(1)(c).
Article 19(1)(c) of the Constitution declares:

All citizens shall have a right ... to form associations or unions.

The above right, is however, not absolute. Clause 4 of Article 19 provides.
Nothing in sub-clause (c) of the said Clause shall affect the operation of any existing
law in so far as it imposes, or prevents the State from making any law imposing, in the
interests of the sovereignty and integrity of India or public order or morality, reasonable
restrictions on the exercise of the right conferred by the said sub-clause.
In All India Bank Employees Association v. National Industrial Tribunal, 139, the Supreme
Court considered the scope of the aforesaid provisions and inter alia, ruled:

.... even a very liberalinterpretationof sub-clause (c) of Clause (1) of Article 19

cannot lead to the conclusion that the trade unions have a guaranteed right to
... strike, either as part of collective bargaining or otherwise. 140
The Court, however, added:

The right to strike or the right to declare lockout may be controlled or restricted
by appropriate industrial legislation, and the validity of such legislation would

137 (1997) 3 sec 261.

138 (1964) 7 SCR 403.
139 All India Bank Employees Association v. National Industrial Tribunal, AIR 1962 SC 171.
140 Id. at 181.
432 • Industrial Relations and Labour Laws

have to be tested not with reference to the criteria laid down in clause (4) of
Article 19 but by totally different consideration.
A perusal of the aforesaid decision reveals that the Supreme Court in the case under
review has merely reiterated and applied the well-settled law on this point.

Statutory Prohibition on Government Servants' Right to Strike

The Supreme Court in the instant case observed that there is no statutory provision, which
empowers the employees to go on strike. On the other hand, there is a prohibition to go
on strike under the Tamil Nadu Government Servants Conduct Rules, 1973. Rule 22 of the
said Rules provides:

No government servant shall engage himself in strike or in incitements thereto

or in similar activities.
Explanation to the aforesaid provision defines the expression of 'similar activities' to
include:

The absence from work or neglect of duties without permission and with
the object of compelling something to be done by his superior officer of
the government or any demonstrative fast called 'hunger strike' for similar
purposes.
Rule 22A provides:

No government servant shall conduct any procession or hold or address any

meeting in any part of any open ground adjoining any Government office or
inside any office premises-(a) during office hours on any working day; and
(b) outside office hours or any holiday, save with the prior permission of the
head of the deparbnent or head of office as the case may be.
Let us turn to examine the legal position which existed prior to this case.
The right of 'government servants' to form association, hold demonstration and
strike has figured in a number of decided cases. Their position is somewhat anomalous.
While government servants like industrial workers have the guaranteed fundamental
right to form associations or unions and to demonstrate for redressal of their grievances.
But unlike industrial workers, government servants are generally charged with onerous
responsibilities for operating essential and vital services to the community. As such,
Government servants are expected to behave in a responsible manner without resorting
to concerted activity on the ground that strike would be tantamount to disloyalty to
the nation and the public. But, it is unfortunate that government servants have in fact
ignored the law of the land and resorted to strike which led the government to regulate
these activities through the Government Servants' Conduct Rules and Essential Services
Maintenance Ordinances, etc. Thus, the President in exercise of powers conferred upon
him by the proviso to Article 309 issued the Central Civil Services (Conduct) Rules, 1955.
Rule 4A of the Rules reads:

No government servant shall participate in any demonstration or resort to

any strike in connection with any matter pertaining to his condition of service.
 Instruments of Economic Coercion • 433

From the above, it is evident that a government servant has no right to go on strike
under any legislative enacbnent. On the contrary, there is a prohibition under the statute
to go on strike.

Moral or Equitable Justification to Go on Strike

After having held that strike is not a fundamental right and government servant has no right
to strike under any law, the Supreme Court proceeded to determine the issue whether there
is any moral or equitable justification to go on strike. The Court observed that (z) government
employees cannot claim that they can hold the society to ransom by going on strike. The
Court, however, added that even if there is injustice to some extent, they have to resort to the
machinery provided under different statutory provisions for redressal of their grievances;
(iz) Strike as a weapon is mostly misused which results in chaos and total mal-adminstration
and (iii) Strike affects the society as a whole and particularly in the instant case when two
lakh employees go on strike en masse, the entire administration comes to a grinding halt.
The Court also referred to the inconvenience caused to public due to strike by teachers,
doctors and transporters. In the case of strike by teachers, entire educational system suffers;
many students are prevented from appearing in their exam, which ultimately affects
their whole career. In case of strike by doctors, innocent patients suffer; in case of strike
by employees of transport services, entire movement of the society comes to a stand still;
business is adveresely affected and a number of persons find it is difficult to attend to
their work, to move from one place to another or one city to another. On occasions, public
properties are destroyed or damaged and finally this creates bitterness among public against
those who are on strike.
The Court also showed its concern against irresponsible behavior of government
servants, particularly when out of the total income from direct tax, approximately 90 per cent
of the amount is spent on the salary of about 12 lakh government employees in the state.
This is all the more so where there is large scale unemployment and number of qualified
persons are eagerly waiting for employment in government deparbnents or in public sector
undertakings. Accordingly, the Court emphasized the need to be fully aware of their duties,
responsibilities and effective methods for discharging the same in the prevailing situation.
The Court suggested that for redressing their grievances, instead of going on strike, the
employees should do more work. Such gesture of employees for acting honestly, diligently
and efficiently would not only be appreciated by the authority but also by people at large,
the Court added. This is so because in a democracy, even though they are government
employees, they are part and parcel of governing body and owe duty to the Society.
The Court also emphasized the need to deal with the misconduct by government
employees in accordance with law. 'However, considering the gravity of the situation
and the fact that on occasion, even if the employees are not prepared to agree with what
is contended by some leaders who encourage the strikes, they are forced to go on strikes
for reasons beyond their control. Therefore, even though the provisions of the Act and the
Rules are to be enforced, they are to be enforced after taking into consideration the situation
and the capacity of the employees to resist. On occasion, there is tendency or compulsion
to blindly follow the others'.
The aforesaid observations raise a basic question whether it was necessary to decide the
issue of moral or equitable justification to go on strike when it had already held the strike to
be illegal. This is all the more so when the Court, following its earlier decisions, ruled that
434 • Industrial Relations and Labour Laws

strike is not a fundamental right and government servants do not have any legal right to
go on strike. It is submitted that there was no need to decide such issues particularly when
the Supreme Court ruled that illegal strikes cannot be justified. In this context it is necessary
to refer to the development of case law on legality and justification.
A survey of the aforesaid decisions, therefore leads us to the conclusion that the
observation of majority has left the issue whether illegal strike per se is unjustified wide
open and introduces uncertainty.

Role of the Supreme Court in Providing Relief to Dismissed Strikers

The Supreme Court has played a constructive or even conciliatory role in easing and
possibly bringing to an end, the unfortunate situation created due to en masse dismissal of
over 1,70,000 government employees including teachers, who had gone on strike. In this
process, the Court succeeded in getting the undertaking from the government of Tamil
Nadu to the following effect:
(i) To reinstate all the government employees who are dismissed because they had gone
on strike, except (a) 2,200 employees who had been arrested and (b) employees against
whom FIRs had been lodged.
(iz) The aforesaid order of reinstatement in service would be subject to unconditional
apology as well as undertaking to the effect that employees would abide by Rule 22
of the Tamil Nadu Government Servants Conduct Rules 1973.
(iii) The government will proceed under the disciplinary rules only against those employees
who had indulged in violence and who had incited the other employees to go on strike.
(iv) The government of Tamil Nadu would pass an appropriate order for regularizing the
services of reinstated employees for the period for which they remained absent and
this would not be treated as a break in service.
We now turn to examine the specific direction issued by the Court:
• Direction to Reinstated Employees. The Supreme Court pointed out that employees who
are reinstated in service would take care in future to maintain discipline as there is
no question of having any fundamental, legal or equitable right to go on strike. On
the other hand, the employees adopt other alternative methods for redressal of their
grievances.
• Direction in Respect to Employees who are not Reinstated. The Supreme Court ordered
that for those employees who are not reinstated in service on the ground that FIRs are
lodged against them or after holding any deparbnental inquiry penalty is imposed, it
would be open to them to challenge the same before the administrative tribunal and
the tribunal would pass appropriate order including interim order within a period of
two weeks from the date of filing of such application before it.
• Direction to Government. The Supreme court showed its concern about the concerned
authorities not making the administrative tribunals under the Administrative Tribunal
Act, 1985, functional and effective by appointing men of calibre.
• Directions to the High Court. In case the administrative tribunal is not functioning, it
would be open to the employees to approach the High Court and it is for the High Court
to ensure that justice should not be denied to the affected persons if the administrative
tribunals are not functioning.
 Instruments of Economic Coercion • 435

Constitutional Validity of the Tamil Nadu Maintenance Act, 2002 and Tamil Nadu
Ordinance No. 3 of 2003
The Tamil Nadu Government Servants Conduct Rules, 1973 prohibits a government servant to
engage himself in strike or in incitements thereto or in similar activities. For the purpose of the
aforesaid rule, the expression 'similar activities' shall be deemed to include the absence from
work or neglect of duties without permission and with the object of compelling something to
be done by his superior officers or the government or any demonstrative fast usually called
'hunger strike' for similar purposes. However, despite this provision, in the year 2002, the Tamil
Nadu Essential Services Maintenance Act (TESMA), 2002, which is said to be a draconian law,
was first invoked in response to an indefinite strike by employees in pursuance of demands
relating to pension benefits that had been curtailed on grounds of a resource crunch.
The government also issued an ordinance empowering itself with the summary power
of dismissal en masse, without any application of mind and without giving the employees an
opportunity to be heard. The ordinance, which amended TESMA 141 provides for treabnent
as 'deemed participation' in the banned strike any absence of employees irrespective of
the actual reasons for their abstention from duty after the promulgation of the ordinance.
Midnight arrests of employees and their leaders, retrospective effect sought to be given to the
ordinance and dismissals without giving individual notices, all show that the government
was intent upon crushing the strike by any means.
The validity of the aforesaid Act and Ordinance was challenged before the Supreme
Court. The Supreme Court, however, did not decide the issue whether the Tamil Nadu Services
Maintenance Act, 2002 and Tamil Nadu Ordinance No. 3 of 2003 or interpretation of any of
the provisions thereof are ultra vires the Constitution on the ground that (i) state government
has gracefully agreed to reinstate 'most' of the employees who had gone on strike. However,
6,072 employees were not covered by the order and were not entitled to reinstatement.
The aforesaid decision raises several issues (z) Can the Court refuse to determine the
constitutionality of the Ordinance, or Act on the ground that most (and not all workers) are
likely to be reinstated? (iz) Whether the employees who have not been reinstated under the
agreement should become legal orphans? What would happen to those employees who would
not be reinstated? Quite apart from this, the Tamil Nadu Ordinance also raises several issues,
namely: (z) Can post1acto amendment be valid without application of mind and without giving
the employees an opportunity of being heard valid? (iz) Is the practical relief provided to certain
employees be the substitute for the alleged illegal act of Tamil Nadu Government? (iii) Can
the orderof dismissal under the Act or Ordinance (which is itself questionable) be sustained?
Quite apart from this, the court's judgement also raises various questions. First, to
what extent the Supreme Court's observations are enforceable? Second, will it really be
possible for the aggrieved employees to expect prompt response from the tribunals given
the way they function?

An Appraisal
From the above discussion, the following conclusions emerge:
(i) The Supreme Court, relying upon its earlier judgements, held that right to strike is not
a fundamental right and government servants have no constitutional or legal right

141 Section 7.
436 • Industrial Relations and Labour Laws

to go on strike. In this regard, we wish to point out that press reports referred to the
1989 judgement of the Supreme Court B R Singh v. Union of India 142 to support the
viewpoint that right to strike is recognized as a mode of redressal for resolving the
grievances of workers. However, we wish to point out that they failed to look into
the very next sentence wherein the court said, 'these are to be found in Sections 10(3),
10A(4A), 22 and 23 of the Industrial Disputes Act, 1947. From this it is evidentthat the
aforesaid rule is only applicable in cases of industrial workers and not to government
employees.'
(iz) This judgement is also not applicable to teachers employed in school and colleges
because they are not 'workmen' under the Industrial Disputes Act, 1947 and, therefore,
the Industrial Disputes Act, 1947 is not applicable. This law has been laid down by
the Supreme Court in Miss A Sundarmbal v. Govt. of Goa, Daman & Diu. 143 Quite apart
from this, press statements of political parties and trade union federations do not
make a distinction between the right to strike of industrial workers and government
employees while commenting on government servants' right to strike. Indeed they
are unable to distinguish between fundamental and statutory right to strike and use
them as if they are interchangeable. We wish to emphasize that fundamental rights
are those rights which are guaranteed under the Constitution while statutory rights
are those rights provided under the statute, i.e., in case of strike under the Industrial
Disputes Act, 1947.
(iii) Press statements of political parties and Federation of Trade Unions have also
misinterpreted the scope of ILO Convention No. 87 on Freedom of Association and
Convention No. 98 on Right to Organize and Collecting Bargaining, 1949. It is true that
India was a founder member ofILO but it has notyetratified these conventions primarily
because government servants have no right to collectively raise disputes with the State
under the respective conduct rules. The administrative tribunals have therefore, been
set up to resolve individual disputes. Quite apart from this, joint consultative machinery
for Central Government employees permits negotiations on certain matters.
(iv) The determination of moral or equitable justification to go on strike by the Supreme
Court in this case has been debated. It has been commented by various jurists that it is
'unwarranted and uncalled" for. Be that as it may, we feel that once the Court has held
that there is no fundamental right to strike and the government servants do not have
the right to go on strike as it is prohibited in the Conduct Rules, it was not necessary
to decide such issue. This is so because the Supreme Court in Indian General Navigation
and Railway Co. v. Their Workmen, 144 and Model Mills v. Dharam Das 145 held that strike
which is illegal cannot be characterized as 'justified'.
(v) The failure of the Supreme Court to decide the vital question of the constitutional
validity of the Tamil Nadu Essential Services Maintenance Act, 2002 and Tamil Nadu
Ordinance No. 3 of 2003 on the ground that the state government has gracefully agreed
to reinstate most of the employees who had gone on strike is open to debate. This is all
the more so when the ordinance suffers from infirmities and runs against the settled
principles of law.

142 (1990) Lab IC 389.

143 (1989) 1 LLJ 62 (SC).
144 (1960) 1 LLJ 13.
145 AIR 1958 SC 311.
 Instruments of Economic Coercion • 43 7

(vz) The Supreme Court has played a significant role in persuading the government of Tamil
Nadu to reinstate the employees and also to lay down norms for disposal of cases of
those employees who have not been reinstated. This is a commendable attempt and
needs to be highlighted.
(vii) The Supreme Court deprecated the tendency of Madras High Court to exercise its
extraordinary jurisdiction to meet the unprecedented situation wherein about 2 lakh
employees who had gone on strike were dismissed. While dealing with decision in
L Chandra Kumar v. Union ofIndia 146 decided upon by the High Court, the Supreme Court
said that no doubt it was held in that case that alternative remedy should have been
exhausted before moving to the High Court under Article 226 and 227 of the Constitution
but in the instant case, if thousands of employees are directed to approach the High Court
which incidentally has only one man, it would not be in a position to render justice. The
Court accordingly held that in a very exceptional circwnstance, that arose in the present
case, it was not justifiable for the High Court not to entertain the petition.
(viii) The Supreme Court's remarks that administrative authorities are not making the
tribunal functional and effective by appointing men of calibre, which makes the
alternative remedy less effective is instructive. It is hoped that the government will
take adequate steps in this direction.
In Jan Chowkidar (Peoples Watch) v. State of Bihar,147 the Patna High Court held that the
government servants who are getting salary from the state from the public exchequer should
be more responsible to the public at large. Whether strike was illegal or whether it was
unjustified, what was the misconduct of each of the employees, whether they have merely
participated in the strike or whether they have committed any offence, incited violence and
obstructed other willing employees to work, all these questions are to be decided by the
employer according to law complying with the principle of natural justice and service law.
In any event, right to work is a fundamental right and nobody has the right to obstruct the
willing employees to do the work. Destruction of public property etc., cannot be justified.

G. Constitutional Validity of the Essential Services Maintenance Ordinance 1960

S Vasudevan and Others v. S D Mital 148 again raised the problem of government servants'
right to go on strike vis-a-vis the power of the government to prohibit it under the Essential
Services Maintenance Ordinance, 1960. The main issue involved in this case was whether
the right to form an association or union included the right to go on strike. The Supreme
Court answered the issue in the negative.
The facts of the case were as follows: The petitioner, S Vasudevan, was a permanent
upper division clerk of the Union of India in the office of the general manager, Telephones,
Bombay. He joined the general strike of the employees of Union of India commencing on
12 July 1960. The director of telegraphs suspended him from service on the ground that
disciplinary proceedings were contemplated to be taken against him. He was charged with
committing grave misconduct by participating in an illegal strike in contravention of the
Essential Services Maintenance Ordinance, 1960, which had declared the strike by Posts and
Telephone officials as illegal. He was also charged for having deliberately contravened the

146 (1997) 3 sec 261.

147 (2009) 4 LLJ 870.
148 S Vasudevan v. S D Mital, AIR 1962 Born. 53.
438 • Industrial Relations and Labour Laws

provision of the Central Government Civil Services (Conduct) Rules, 1955, insofar as he had
participated actively in demonstration organized in connection with the strike of the Central
Government employees and took very active part in preparation for the strike and he failed
to report for duty as required of him from 12 July 1960. This was also in contravention of
the Essential Services Maintenance Ordinance, 1960.
Vasudevan filed a writ petition under Article 226 in the Bombay High Court wherein
he prayed to hold the order of suspension and the charges served on him as void, illegal
and inoperative in law. The Ordinance was challenged on the ground that it was in excess
of the powers conferred on the President under Article 123(1) of the Constitution. It was also
argued on behalf of workmen that the Ordinance violated the right conferred on a citizen by
Article 19(1) (c) of the Constitution. Deciding the question whether the right to go on strike
was included within it the right to form associations or unions, Justice Tambe observed:
(The right to go on strike) is not joint or collective expression of view but is
joint or collective action. By its very nature it is fraught with possibilities of
leading to violence. History has been telling us that in large number of cases
where people have gone on strike there has been resort to violence.
He added:

If the Constitution-makers had intended to confer on the citizens as a

fundamental right, the right to go on strike, they would have expressly said so.
On the basis of the assumption that the right to go on strike has not expressly been
conferred on the citizen, his Lordship arrived at the conclusion that right to strike was not
included in the right conferred under Article 19 (1) (c) of the Constitution. Further, his
Lordship also referred to the observation in Corpus Juris Secundum 149 that 'the right to strike
is a negative right which can be exercised with due regard to the right of others. Neither
the common law nor the Fourteenth Amendment to the Federal Constitution confers an
absolute right to strike.'

Since 1950, the Constitution guarantees the right to acquire, hold and dispose of property. The
Constitution also guarantees the right to carry on any occupation, trade or business. Is the
employer's right to lockout workmen guaranteed under any or both of these constitutional
provisions violative of the Constitutional guarantee unless it imposes reasonable restrictions in
the interest of general public? This question was answered in this negative by the Andhra Pradesh
High Court in A P Electrical Equipment Corporation v. Its Staff Union. 150 The Court observed:

... the right to lockout is now controlled by Sections (10) (3), lOA (4A) ... 22
and 23 of the Act and the penal action is engrafted for disobedience of the
prohibition of lockout under Section 24. If it is held that the petitioner has a
fundamental right to declare lockout, then naturally the provisions referred
to earlier would be rendered otiose. 151

149 Corpus Juris Secundum, Vol. 83,525.

150 (1986) Lab. IC 1851.
151 Id. at 1857.
 Instruments of Economic Coercion • 439

The Court accordingly held that right to lockout is a statutory right controlled by the
relevant provisions of the Industrial Disputes Act, 1947 and must be exercised in conformity
therewith.

A. General Prohibition on Strikes and Lockouts

Section 23 which prohibits strikes and lockouts provides:
No workman who is employed in any industrial establishment shall go on strike in
breach of contract and no employer of any such workman shall declare a lockout:
(a) during the pendency of conciliation proceedings before a board and seven days after
the conclusion of such proceedings;
(b) during the pendency of proceedings before a labour court, tribunal or national tribunal
and two months after the conclusion of such proceedings;
(c) during the pendency of arbitration proceedings before an arbitrator and two months
after the conclusion of such proceedings, where a notification has been issued under
sub-section (3A) of section 10 A; or
(d) during any period in which a settlement or award is in operation in respect of any of
the matters covered by the settlement or award.
The aforesaid provisions do not limit illegality only to strikes (or lockouts) which
cover demands which are the subject-matter of the pending proceedings. Thus, a strike (or
lockout) which is called during the pendency of conciliation proceedings or pendency of
adjudication or arbitration proceedings is illegal, although it is in respect of demands which
are not covered by conciliation or adjudication proceedings. 152
Curtailment of Scope of General Prohibitation. In Chemicals and Fibres of India Ltd
v. DC Bhoir 153 there was a dispute between a workman and the employer concerning the
former's dismissal. This 'individual dispute' became an 'industrial dispute' because of the
provisions of Section 2A of the IDA and the reference thereof by the appropriate government
to a labour court for adjudication. During the pendency of adjudication proceedings relating
thereto, the management of M/ s Chemicals and Fibres Ltd, dismissed three other workmen.
Thereafter, the workmen of M/ s Chemicals and Fibres Ltd, went on strike to protest against
the dismissal of the aforesaid three employees. Was this strike prohibited under Section 23
(b)? The Supreme Court ruled:

Even in respect of clause (b), some limitations should be read confining it to

the parties to the proceedings either actually or constructively, as in the case
of the Union espousing the cause of an individual workman. 154
The Court held that the prohibition contained in Section 23 did not apply to the
workmen employed in Chemical and Fibres of India Ltd, even though they went on strike,
and matters relating to the dismissal of a single workman of that establishment were

152 Chemicals and Fibres of India Ltd v. D.C. Bhoir, (1975) 2 LLJ 168 (SC).
153 Balmer Lawrie & Co. Ltd v. Its Employees' Union, (1989) Lab. IC 88 (Bombay).
154 Id. at 173.
440 • Industrial Relations and Labour Laws

pending adjudication before labour court. At the same time, the Supreme Court widened,
in a different direction, the scope of the prohibition imposed by Section 23 when it approved
the High Court decisions which established:

... that even though the proceedings pending before the labour court, tribunal
or national tribunal might relate to certain matters only, there cannot be a
strike or lockout even in relation to matters other than those which are pending
before the labour court tribunal or national tribunal. 155
Among the decisions cited and approved by the Supreme Court is the decision of the
Calcutta High Court in Provat Kumar Kar v. WT Parkar. 156
In view of its approval of the principle established in Provat Kumar Kar's Co. Ltd,
the Supreme Court did not advert to the question whether the subject matter of the
impugned strike arose out of or was connected with or was relevant to, the subject-matter
of pending adjudication proceedings. The Court proceeded on the basis, (as decided in
that case), that the general prohibition contained in Section 23 did not cover workmen
employed in establishments which were not concerned in the adjudication proceedings.
It applied itself to a limited question: did the prohibition affect all workmen employed in
the establishment or establishments involved in the pending adjudication proceedings, or
only those workmen who were parties to the proceeding? Having reached the conclusion
that the general prohibition imposed by Section 23(b) affected only those workmen who
were parties to the adjudication proceedings, the Supreme Court went to assert that, since
the pending adjudication proceeding related to an 'individual dispute', other workmen of
the establishment were not affected by the general prohibition.

B. Additional Restrictions on Strikes and Lockouts in Public Utility Services

Strikes and lockouts adversely affect the interest of the community in maintaining a high
level of production and uninterrupted public utility services. Section 22, which regulates
strikes and lockouts in public utility services, inter alia, directs:
(1) No person employed in a public utility service shall go on strike, in breach of contract:
(a) without giving to the employer notice of strike, as hereinafter provided, within 6
weeks before striking;
(b) within 14 days of giving such notice; or
(c) before the expiry of the date of strike specified in any such notice as aforesaid; or
(d) during the pendency of any conciliation proceedings before a conciliation officer
and 7 days after the conclusion of such proceedings.
(2) No employer carrying on any public utility service shall lockout any of his workmen:
(a) without giving them notice of lockout as hereinafter provided, within 6 weeks
before locking-out; or
(b) within 14 days of giving such notice; or

155 Id. at 170.

156 Provat Kumar Kar v. WT Parkar, AIR 1950 Cal. 116; The Supreme Court approved the decision in
State ofBihar v. Deodhar Jha, AIR 1958 Pat. 51.
 Instruments of Economic Coercion • 441

(c) before the expiry of the date of lockout specified in any such notice as aforesaid;
or
(d) during the pendency of any conciliation proceedings before a conciliation officer
and 7 days after the conclusion of such proceedings.
The scope of this section will be examined hereunder:
1. Public Utility Services. Unlike the provisions of Section 23 which, as we have already
seen, contain general prohibition on the use of the instruments of economic coercion, the
provisions of Section 22 are limited in their scope. They apply to strikes and lockouts only
in public utility services.
Section 2(n) of the IDA defines 'public utility services' to mean:
(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;
(iz) any section of an industrial establishment on the working of which the safety of the
establishment or the workmen 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;
(vz) 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, declared 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 6 months, at any one time if in the opinion of the
appropriate government public emergency or public interest requires such
extension.
It will be observed that there are two categories of public utility services (z) those that
are mentioned in clauses; (i) to (v) of Section 2 (n); and (ii) those which being listed in the
First Sched u1e, are declared by the appropriate government to be 'public utility services.' The
second of these two categories can be classified as public utility service only for a period of
six months from the date of government notification though the government is empowered
to extend to period from time to time by successive notifications.
Lest the true scope of governmental power to impose additional restrictions on the use
of instruments of economic coercion remains camouflaged in the provisions of the IDA, it is
necessary to point out that appropriate governments are empowered to add to or subtract
from the list of industries mentioned in the First Schedule. Thus, Section 40 of the Industrial
Disputes Act, inter alia, specifically provides:
(a) The appropriate government may, if it is of the opinion that 'it is expedient or necessary
in the public interest to do so, by notification in the official gazette, add to the First
Schedule any industry and on any such notification being issued, the First Schedule
shall be deemed to be amended accordingly.
442 • Industrial Relations and Labour Laws

(b) The Central Government may, by notification in the official gazette, add to or alter
or amend the Second Schedule or the Third Schedule and on any such notification
being issued, the Second Schedule or the Third Schedule, as the case may be, shall be
deemed to be amended accordingly.
(c) Every such notification shall, as soon as possible after it is issued be laid before the
legislature of the state, if the notification has been issued by a state government or
before Parliament, if the notification has been issued by the Central Government.
Accordingly, the First Schedule has grown in bulk. The First Schedule, as modified
by the Central Government from time to time, now provides:
(a) Transport (other than railways) for the carriage of passengers or goods, by land or
water
(b) Banking
(c) Cement
(d) Coal
(e) Cotton textiles
(f) Foodstuffs
(g) Iron and steel
(h) Defence establishments
(i) Service in hospitals and dispensaries
G) Fire brigade service
(k) India Government mints
(1) India Security Press
(m) Copper mining
(n) Lead mining
(o) Zinc mining
(p) Iron ore mining
(q) Service in any oilfield
(r) Service in the uranium industry
(s) Pyrites mining
(t) Security Paper Mills, Hoshangabad
The 1971 Amendment however, deleted item 18 from the First Schedule and added
in it a sub-clause (ia) to the aforesaid clause (n) of Section 2. Thus, the concept of public
utility service itself has undergone a change. It now includes not only those industries which
directly affect health and safety of the members of the society but also those which are the
basis of national economic reconstruction and development. In addition, state governments
have declared other industries157 to be public utility services.
In Swadeshi Industries v. Its Workmen 158, the company was running three different units,
namely, (z) cotton textile weaving unit, (ii) silk unit, and (iii) art silk products manufacturing

157For instance Government of Bihar and West Bengal added '(ii) Oxygen and Acetylene' in the First
Schedule.
158 Swadeshi Industries v. Its Workmen, (1960) 2 LLJ 78 (SC).
 Instruments of Economic Coercion • 443

unit. The cotton textile industry was declared a 'public utility service' by the appropriate
Government. The workmen employed in the silk unit went on strike without giving any
notice as required by the aforesaid Section 22. The company dismissed the striking workmen
on the ground that they had gone on illegal strike. The strikers, however, asserted that the
silk unit was not a 'public utility service' and consequently Section 22 was not applicable.
The Supreme Court agreed that prima facie the silk unit was not a public utility service.
Further, since the company did not prove that the concerned workmen at the time of strike
or prior to that, had even worked in the cotton weaving unit; that the workmen employed in
the silk unit, were required under the terms of employment to work in the cotton unit, and
that textile unit workers in the cotton textiles unit was ever assigned to any of the striking
workmen, the concerned workmen could not be said to be employed in a 'public utility
service' within the meaning of Section 2 (n) and for the purposes of Section 22.
Earlier in D N Banerjee v. PR Mukherjee 159 the Supreme Court referred to the provisions
of Section 2 (n) and the First Schedule of the IDA to support the decision of the Court that
local bodies were within the purview of the IDA.
Seven years later, Justice Gajendragadkar speaking for the Supreme Court referred
to entry (q) in the First Schedule and; even though he could not decide in State of Bombay v.
Hospital Mazdoor Sabha 160 on the basis of that entry as the Parliament had added that entry
after the commencement of the proceedings in that case, he used it to demonstrate legislative
intent indicative of including services in hospitals within the purview of industry and added:

After the addition of the relevant entry in the Section 1, it would not be open to
anybody to suggest that services in hospitals does not fall under Section 2 G). 161
Even so, Chief Justice Hidayatullah held in Safdarjung Hospital 162 that, though public
conservancy or sanitation was an industry, services in government or charitable hospitals
did not fall within Section 2 G).
2. The Central Scheme ofRegulation under Section 22. The Act163 adopts a two pronged
approach to prevent the use of instruments of economic coercion in public utility concerns
and thereby to maintain continuity of production or services. First, the section postpones the
implementation of the decision to use the instruments of economic coercion by prescribing
a statutory requirement of notice. Second, Section 22 read with Section 12 ensured 'peace
making' efforts by imposing a statutory duty on conciliation officers to hold conciliation
proceedings and directing the parties not to resort to the use of the instruments of economic
coercion during the pendency of a statutory requirement of notice.
The overall perspective of the IDA indicates that Section 22 may also be looked at
as the step which leads to governmental intervention in labour management relations to
preserve the interest of the community.
(a) Requirements of notice. Section 22 (1) of the IDA requires that persons employed
in public utility services shall not go on strike 'in breach of contract' without giving the

159 D N Banerjee v. PR Mukherjee, AIR 1953 SC 58.

160 Stateof Bombay v. Hospital Mazdoor Sabha, (1960} 1 LLJ 250 (SC}.
161 (1960} 1 LLJ 250 at 259.
162 (1970) 2 LLJ 266 (SC}.
163 Section 22.
444 • Industrial Relations and Labour Laws

requisite notice. And Section 22 (4) directs that the notice of strike shall be given in the
prescribed manner.
Likewise, Section 22 (2) of the IDA states that employers carrying on any public utility
service shall not declare lockout without giving the requisite notice. And Section 22 (5)
directs that the notice of lockout shall be given in the prescribed manner.
It is difficult to ignore the difference in the phraseology of Section 22 (1) and 22(2).
While the former speaks of 'person employed' and 'in breach of contract', the latter merely
speaks of 'employer' and 'his workmen'. The obvious question is what, if any, are the
consequences of this difference in terminology?
The clause 'no person employed in a public utility service shall go on strike in breach
of contract' must necessarily be read in the light of the definition of 'strike'. The net effect of
this interpretation would be that even if a person is not a 'workman' within the meaning of
Section 2 (s) of the IDA, but is employed under a contract, whether the contract is of service
or for services, he is prohibited from going on strike in 'breach of contract'. In view of the
importance of public utility services, this enlarged coverage or the prohibition is logical.
Further, the emphasis on 'breach of contract' suggests the prohibition under Section 22
would not apply to persons who after the termination of the period of contract 'refuse to
continue to work or to accept employment'. In view of the penal consequences flowing
from violation of the prohibition and the constitutional prohibition against forced labour
contained in Article 23 of the Constitution, the emphasis on breach contract is again logical.
The use of the expression 'employer' and 'his workmen' automatically import the element
of contract. However, to the extent to which 'non-workmen' persons employed under a
contract are excluded from the prohibition of Section 22 (2) that sub-section is narrower
than Section 22 (1).
(b) To whom notice is to be given:
(i) Strike notice. Section 22 (1) (a) of the Act states the persons to whom the notice of
strike is to be given. It, inter alia, provides:
No person employed in a public utility service shall go on strike in breach of contract
without giving to the employer notice of strike ... and, Section 22 (4) directs that:

The notice of strike referred to in sub-section (1) shall be given by such number
of persons to such person or persons and in such manner as may be prescribed.
However, the Industrial Disputes (Central) Rules, 1957 do not prescribe person
or persons to whom notice of strike is to be given. Under the circumstances,
notice is to be given to persons stated in Section 22(1) (a), i.e., 'employer.'
(ii) Lockout notice. Section 22 (2) (a) of the IDA provides that:

No employer carrying on any public utility service shall lockout any of his
workmen: without giving them notice of lockout... ...
And Section 22 (5) directs that:
'The notice of lockout referred to in sub-section (2) shall be given in such manner as
may be prescribed.'
This has to be read with Rule 72 which, inter alia, provides that:
... where a registered trade union exists, a copy of notice shall also be served
on the secretary of the union.
 Instruments of Economic Coercion • 445

Unlike Section 22(4), Section 22(5) does not specifically include 'to such person or
persons' but Rule 72 requires that persons, other than those mentioned in 22 (1) to whom
a copy of notice is to be served.
(c) Notice: when to be given. The legislature has drafted in a perplexing manner the
minimum period of notice. Section 22(1)(b) of the IDA provides:

No person employed in a public utility service shall go on strike, in breach of

contract-
(b) within fourteen days of giving such notice.
Likewise, Section 22(2)(b) prescribed the minimum period of notice, to be given by
the employer:

No employer carrying on any public utility service shall lockout any of his
workmen.
(c) 'within fourteen days of giving such notice.'
The reason for prescribing the minimum period is presumably to give time to employer
or workmen, as the case may be, and to the various governmental authorities to see whether
strike or lockout can be prevented and workmen may come either partially or wholly to
workmen's or employer's point of view as the case may be. Otherwise it becomes difficult
if not, impossible, for the authorities to anticipate outbreak of hostilities.
(d) Notice: effective for how long. Section 22(1) (a) prescribes the upper limit within which
strike notice would be effective. It states:

No person employed in a public utility service shall go on strike, in breach

of contract.
(a) without giving to the employer notice of strike, as hereinafter provided, within 6
weeks before striking.
Similarly, Section 22 (2) (a) prescribes the upper limit in case of lockout:

No employer carrying on any public utility service shall lockout any of his
workmen.
(a) without giving them notice of lockout as hereinafter provided, within 6 weeks
before locking-out.
ltis clear from above that notice of strike or lockout would be ineffective after 6 weeks
from the date it is given: the strike or lockout must be effected within this period from the
date of notice of strike or lockout. The reasons for prescribing the maximum limit is to
provide sufficient security measure by the custodian of law, if the strike or lockout was to
break out within the stipulated period. Otherwise, it becomes too difficult, if not impossible,
for the authorities to anticipate outbreak of hostilities.
In Mineral Miner's Union v. Kudremukh Iron Ore Co. Ltd164, the union of workmen
employed in a public utility service gave a notice of strike required under Section 22 on
1 September 1984 of its intention to go on one day token strike any day after 20 September 1984.

164 (1986) 1 LLJ 204 (Kamataka).

446 • Industrial Relations and Labour Laws

Thereupon the conciliation proceedings commenced and took place between 19 September,
1984 to 1 October 1984 on which date the conciliation failed. The failure report was submitted
to the Government on 12 October 1984 and the parties were informed about the failure
of conciliation only on 9 November 1984. Thereafter on 10 December 1984 the workmen
who were members of the union went on strike. Thereupon the management informed the
union considering the strike to be illegal, that the workers were not entitled to wages for
10 December 1981, which amount was deductible under the Payment of Wages Act, 1936.
On these facts a question, inter alia, arose for determination whether fresh notice is required
on failure of conciliation and conclusion after six weeks from the date of strike notice. The
Karnataka High Court answered the question in the affirmative and observed:

a fresh notice under S. 22 (1) in compliance with clauses (a), (b) and (c) of S. 22
(1) and S. 24 is necessary if in a given case, by the date on which the failure of
conciliation proceeding is intimated, 6 weeks period from the date of notice
of strike issued earlier under S. 22 (1) of Act had expired.
In Management, Essoripe Mills Ltd v. Presiding Officer, Labour Court and Others,1 65 the
respondents 2 to 23 went on illegal strike from 8 November 1990. Respondent no. 15 and
one SL Sundaram who had died in the meantime were the first to strike work in the blow
room resulting in stoppage of the entire operation of the appellant's mill. On 14 March 1991,
the general secretary of the Tamil Nadu Panchalai Workers' Union served a strike notice on
the management under Section 22(1) of the Industrial Disputes Act, 1947 stating that 'strike
would commence on or after 24 March 1991'. But on 8 April, 24 April and 13 May 1991,
the management dismissed respondents 2 to 23 from service after holding a disciplinary
inquiry. Aggrieved by this order, respondents 2 to 23 filed petitions under Section 2A of
the Act for reinstatement with back wages and continuity of service. The labour court by its
award dated 24 January 1994 held that the strike was illegal. However, in purported exercise
of its powers under Section llA of the Act, the labour court substituted the punishment of
dismissal by order of discharge and awarded compensation of fS0,000 to each workman.
The award was challenged by the appellant as well as the workmen before the High
Court. On 5 August 2000, a single judge of the High Court allowed the writ petition filed
by respondents 2 to 23 on the ground of non-compliance of Section 33(2)(b) of the Act and
directed reinstatement of the workmen with full back wages and continuity of service.
According to him, a copy of the strike notice dated 14 March 1991 was sentto the conciliation
officer and therefore, conciliation proceedings were pending on the date of the dismissal and
since the dismissal was without the approval of the conciliation officer in terms of Section
33 of the Act, the same was illegal.
Against this order, the appellant filed a writ petition against the order of punishment,
which was dismissed. Thereupon, special leave petitions were filed before the Supreme
Court. In the course of the hearing, the Court suggested certain terms for amicable settlement
which the appellant agreed to but respondents 2 to 23 did not agree. The Supreme Court
observed:

Section 22(1) prohibits a strike in a public utility service, in breach of contract,

without giving to the employer advance notice of 6 weeks. Section 22(1)
prohibits a strike in a public utility service, in breach of contract, without giving

165 (2oos) 7 sec 594.

 Instruments of Economic Coercion • 44 7

to the employer advance notice of 6 weeks. It prohibits strike (a) within the
notice period of 6 weeks, (b) within 14 days of giving such notice, (c) before the
expiry of the date of strike specified in such a notice, (d) during the pendency
of any conciliation proceedings before a conciliation officer and 7 days after
the conclusion of such proceedings.
The Court added that the strike notice issued on 14-3-1991 stating that the strike will
commence on or after 24-3-1991 i.e. (just 10 days notice) does not satisfy the requirement
of advance notice stipulated under section 22(1). Therefore, it is not a valid notice.
Consequently, in the eye of law, there was no commencement of conciliation proceedings
as a result of the said notice. Unless a conciliation proceeding was pending at the time
of dismissal of workmen, section 33 will not be attracted and there is no question
of seeking permission of the conciliation officer in such a case. The Court remarked
that the High Court failed to appreciate that in terms of Section 33A for not obtaining
permission of the conciliation officer under Section 33, the only legal consequence is
that the conciliation officer shall take the complaint of contravention of the provisions of
Section 33 into account in mediating in and promoting the settlement of such industrial
dispute. Therefore the order of dismissal in any event was not illegal. The Court also
observed that the conciliation officer, unlike the labour court or an industrial tribunal,
has no power of adjudication. Therefore, he cannot set aside the order of dismissal and
therefore dismissal would be valid.
The Court then noted that the notice was given about the proposed strike after the
strike. Thus, the workers resorted to strike on 8 November 1990, while the notice was given
on 14 March 1991. The Court then enumerated the following stages under Section 22:
(i) advance notice of 6 weeks
(iz) 14 days given to the employer to consider the notice;
(iii) the workmen giving the notice cannot go on strike before the indicated date of strike;
(iv) pendency of any conciliation proceedings.
The Court then observed that in case no conciliation proceedings were pending under.
Sub-section (4) of Section 22, the notice of strike referred to in sub-section (1) has to be given
in such manner as may be prescribed. The Central Rule 71 prescribes the manner in which
the notice has to be given and the notice is in Form 'L'. The notice as mandated under
Section 22 has to be given to the employer. Further, there is nothing in Section 22 which
requires giving of intimation or copy of the notice under Section 22 to the conciliation officer.
At the stage of notice under Section 22, there is no dispute. Moreover, the date of notice is
14 March 1991 and the proposed strike was on 24 March 1991. Therefore, on the face of it,
it cannot be treated to be a notice as contemplated under Section 22(1)(a).

In the notice it is stated that the strike will commence on or after 24-3-1991.
Obviously, 6 weeks' time before the date of strike was not given. In this
case the date of notice is 14-3-1991 and the proposed strike was on or after
24-3-1991. The inevitable conclusion is that the notice cannot be treated to be one
under Section 22. If no notice is given to the employer, the effect of it is that he
is not aware of the proceedings. Obviously, the conciliation proceedings must
be one meeting the requirements of law. Here, no notice in terms of Section
22 of the Act was there.
448 • Industrial Relations and Labour Laws

The Court added:

Somewhat unacceptable plea has been taken by Respondents 2 to 23 that in

terms of Section 22(1)(b) after 14 days of giving the notice, the workmen can
go on strike. If this plea is accepted 6 weeks' time stipulated in Section 22(1)
(a) becomes redundant. The expression 'giving such notice' as appearing in
Section 22(1 )(b) refers to the notice under Section 22(1 )(a). Obviously, therefore,
the workmen cannot go the strike within 6 weeks' notice in terms of Section
22(1)(a) and 14 days therefore in termsofSection22(1)(b). The expression 'such
notice' refers to 6 weeks' advance notice.
It is difficult to accept the aforesaid interpretation. If the expression 'without giving to
the employer notice of strike, as hereinafter provided, within 6 weeks of before striking' means
what the Supreme Court has held it to mean; one wonders what was the need of clause (b),
namely 'within 14 days of giving such notice', which means that persons employed in public
utility services shall not go on strike 'in breach of contract' without giving 14 days' notice. And
Section 22(4) directs that the notice of strike shall be given in the prescribed manner. Indeed,
Section 22(1)(a) prescribes the upper limit within which strike notice would be effective.
In other words, the notice of strike or lock-out would be ineffective after 6 weeks from
the date it is given. The reason for prescribing the maximum limit is to provide sufficient
security by custodian of law, if the strike or lock-out were to break out within the stipulated
period. Otherwise, it becomes too difficult, if not impossible, for the authorities to anticipate
outbreak of hostilities.
(e) Notice: how to be given. The notice of strike is to be given by workmen under sub-
section 4 in accordance with Rule 71 of the Industrial Disputes (Central) Rules, 1957, which
reads:
(1) The notice of strike to be given by workmen in a public utility service shall be in
Form 'L.'
(2) On receipt of a notice of a strike under sub-rule (1), the employer shall intimate the
fact to the conciliation officer having jurisdiction on the matter.
Similarly Sub-section (5) requires that:

(t)he notice of lockout referred to in sub-section (2) shall be given in such

manner as may be prescribed,
and Rule 72 of the Industrial Disputes (Central) Rules, 1957 provides that:

(t)he notice of lockout to be given by an employer carrying on a public utility

service shall be in Form 'M'.
The Rules further states:

The notice shall be displayed conspicuously by the employer on a notice board

at the main entrance of the establishment and in manager's office.
The Rule also makes it obligatory upon the employer:
 Instruments of Economic Coercion • 449

Where registered trade union exists, a copy of notice shall be served on the
secretary of the union. 166
A perusal of the aforesaid provisions reveals that the form in which notice is to be
given is mandatory. This view gets support from the use of the term, 'shall' both in sub-
sections (4) and (5). Further the word 'shall' which occurs in Rules 71 and 72 of the Central
Rules confirms this view. Moreover, 'the intention of the legislature in enacting the relevant
provisions and the scheme of the IDA leaves no doubt that compliance of the contents of
notice is mandatory.' Judicial decisions also, confirm this view. For instance, in Employees
of Dewan Bahadur Ram Gopal Mills v. Dewan Bahadur Ram Gopal Mills 167, the workmen of a
public utility concern gave a notice under Section 22. The notice was, however, not in the
prescribed form and it did not specify the date of strike as required under Rule 52 (1) of
the (Hyderabad) Industrial Disputes Rules, 1950, which was in pari materia with Rule 71
of the Industrial Disputes (Central) Rules 1957. Construing Rule 52 (1) of the Hyderabad
Industrial Disputes Rules, the labour court observed:

A perusal of the form E shows that the notice of strike shall specify: the date
of strike. Rule 71 of the Industrial Dispute (Central) Rules of 1957 contains a
similar provision. It is contended that neither the so called notice of strike ...
is on the prescribed form nor does it specify any date of strike. In my opinion,
the provision of Rule 52 ... is mandatory and contravention thereof renders the
alleged notice, ineffective as a statutory notice, as contemplated by Section 22
(1) of the Industrial Disputes Act, 1947. 168
The same question figured again in Municipal Committee v. Industrial Tribunal. 169 In this
case workmen gave a notice of strike to the employer on 26 March, 1967. The notice was,
however, not in accordance with the provisions of Section 22 read with Rule 71 and form
'L' of the Schedule. Construing the provisions of Section 22 read with Rule 71, the Punjab
and Haryana High Court held:

Reading relevant statutory provisions of Section 22 (1) in conformity with Rule

71 and the contents of Form L, it appears to be self evident that the statutory
requirements of the notice are of a mandatory norm.
The Court rejected the contention that the provisions of sub-section (3) of Section
22 are merely directory and a patent violation of these provisions would entail no legal
consequence. The Court reiterated that 'compliance with the provisions of Section 22 is the
core of the matter for determining whether a particular strike be legal or otherwise'.
In Savita Chemicals (Pvt.) Ltd v. Dyes and Chemical Workers Union, 170, the Supreme Court
while dealing with validity or otherwise of the notice of strike given by the union under the
Maharashtra Act, read with the rules made thereunder namely the labour court (Practice
& Procedure) Rules, 1975 held that if all the essential requirements in the prescribed form
for giving of notice are fulfilled, in substance, the basic requirement of the prescribed form

166 Rule 71.

167 Employees of Dewan Bahadur Ram Gopal Mills v. Dewan Bahadur Ram Gopal Mills, (1958) 2 LLJ 115.
168 Id. at 116.
169 Municipal Committee, v. Industrial Tribunal. (1971} 2 LLJ 52 (Punjab and Haryana).
170 (1999} 2 sec 143.
450 • Industrial Relations and Labour Laws

of notice of strike would be satisfied. It is not necessary that the notice must be typed in
the same sequence as given in the prescribed form. The prescribed form and the sequence
of any information to be given therein are mere formal requirements. Similarly, whether
notice is given by registered post or by hand delivery is also not a basic requirement. It is
sufficient if the notice is duly served on the employer.
It is submitted that aforesaid reasoning can be equally applied examining the validity
or otherwise of a strike notice under Section 22(1) (a) of the ID Act, read with rule 71 and
form L under the Industrial Disputes (Central) Rules, 1957.
(f) Notice: When not necessary. Sub-section (3) of Section 22, provides that no notice
needs to be given when a strike or lockout already exists, but in such a case, the employer
must send notice of such strike or lockout on the day when it was declared to the authorities
specified by the appropriate Government under the IDA.
(g) Requirement of compliance with notice. Clause (c) of sub-section (1) of Section 22 is
not happily worded. It provides that strike or lockout shall not be resorted to:
'before the expiry of the date of strike or (lockout) specified in any such notice as
aforesaid' the relevant portion of Form L framed under Rule 71 of the Industrial Disputes
(Central) Rules, 1957 reads:

In accordance with the provisions contained in sub-section (1) of Section 22 of

the Industrial Disputes Act, 1947, I/We hereby give you notice that/I propose
to call on strike we propose to go on strike on ... 20 ... for the reasons explained
in the annexe ...
Similarly, Form M framed under Rule 72 reads:

In accordance with the provisions of sub-section (2) of Section 22 of the

Industrial Disputes Act, 1947. I/We hereby give notice to all concerned that it is
my/ our intention to effect a lockout-in........... deparbnent(s) / section(s) of my/
our establishment with effect from ... for the reasons explained in the annexure.
Whether the workmen are bound to specify the date of strike in a notice given under
Section 22 (1) of the Act? The Karnataka High Court171 answered the question in the
affirmative and observed that in a notice of strike required to be given under Section 22 (1)
of the Act, the date on which the workmen intended to go on strike should be specified and
its non-specification renders the strike illegal.
(h) Requirement of reporting to the government agencies. Sub-section (6) makes it incumbent
on the employer within five days of receipt of notice of strike under sub-section (1) or where
he served a notice of lockout under sub-section (2) to report to the appropriate government
regarding the number of notices received or given on a particular date. And Rule 74 of the
Industrial Disputes (Central) Rules, 1957 lays down:
The report of notice of a strike or lockout to be submitted by the employer under sub-
section (6) of Section 22 shall be sent by registered post or given personally to the assistant labour
commissioner (central) appointed for local areas concerned with copy by registered post to:
1. The concerned administrative deparbnent of the Government of India.
2. The regional labour commissioner (central) for the zone.

171 Mineral Miners' Union v. K Iron Ore Co. Ltd, (1986) 1 LLJ 2004 at 2008.
 Instruments of Economic Coercion • 45 1

3. Chief labour commissioner (Central).

4. Ministry of Labour of the Government of India.
5. Labour deparbnent of the state government concerned.
6. The district magistrate concerned.
The object of Sub-section (6) is perhaps to enable the authorities either to make efforts
to avert such strike or lockout or to make alternative arrangements for running the public
utility service or even to make security arrangements as public service is vital to the day-
to-day life of the community.
(i) Issuance of second notice of strike/lockout on failure of conciliation.
While the requirement of issuing a fresh notice of strike (under Section 22) might be
mandatory for going on strike after the failure of conciliation, on the issue of such second
notice, conciliation cannot be deemed to have commenced or required to be commenced
under Section 20 (1) and 12 (1) of the Act respectively, for the conciliation proceedings
would have already taken place, a failure report would have been intimated to the parties
by the government and consequently clause (d) of Section 22 which prohibits strike during
the pendency of conciliation does not get attracted. The only course open under the Act
to prevent strike in a public utility service is to refer the demands for adjudication under
Section 10 of the Act as by such reference, the prohibition of strike incorporated in Section
23(b) gets attracted. Obviously for this reason, the second proviso to Section 10 (1) makes
it obligatory for the government to refer a dispute relating to a public utility service on the
issuance of notice under Section 22 unless the demand is found to be frivolous or vexatious
or otherwise inexpedient for being referred for adjudication. 172
3. The Response of the (First) National Commission on Labour. The Commission has
attached considerable importance to public utility services. It has, therefore, provided for
compulsory adjudication as an alternative for strike. In the event of failure of negotiation
as also after the failure of the party to agree to arbitration, 'either party shall notify the
proposed IRC with a copy to the appropriate government, of the failure of such negotiation,
whereupon the IRC shall adjudicate upon the dispute and its award shall be binding upon
the parties'173
4. The Response of the (Second) National Commission on Labour. The Second National
Commission on Labour recommended that in socially essential services like water supply,
there may be a strike ballot and if the strike ballot shows that 51 per cent of workers are

172 (1986) 1 LLJ 204 at 206.

173 The procedure stated for the settlement of dispute is as follows:
(,) After negotiations have failed and before notice of strike/lockout is served, the parties may agree to
voluntary arbitration and the commission will help the parties in choosing an arbitrator mutually
acceptable to them.
(ii) Alternatively, either party may, during the period covered by the said notice, approach the
commission for naming the conciliator within the Commission to help them in arriving at a
settlement.
(iii)In essential industries/services, when collective bargaining fails and when the parties to
the dispute do not agree to arbitration, either party shall notify the IRC, with a copy to
the appropriate government, of the failure of such negotiations, whereupon the IRC shall
adjudicate upon the dispute and its award shall be final and binding upon the parties.
See Government of India, Report of the National Commission on Labour, p. xxv (1969).
45 2 • Industrial Relations and Labour Laws

in favour of strike, it should be taken that the strike has taken place, and the dispute must
forthwith be referred to compulsory arbitration.
The commission also recommended that a strike could be called only by the recognized
negotiating agent and that too only after it has conducted a strike ballot amongst all the
workers, of whom at least 51 per cent support the move to strike.

C. Prohibition on Continuance of Strike and Lockout

1. Legislature Measures
Sub-section (3) of Section 10 provides:

Where an industrial dispute has been referred to a board, labour court, tribunal
or national tribunal under this Section, the appropriate government may by
order prohibit the continuance of any strike or lockout in connection with such
dispute which may be in existence on the date of the reference.
The discretion to issue prohibitory order where an industrial dispute has been referred
to arbitrator under Section 10 A, however, is subject to additional restrictions. Sub-section
4 A of Section 10 A lays down:

Where an industrial dispute has been referred to arbitration and a notification

has been issued under sub-section (3A), the appropriate government may, by
order, prohibit the continuance of any strike or lockout in connection with such
dispute which may be in existence on the date of the reference.
A plain reading of the aforesaid provision clearly indicates that to invoke the power
under the said sub-section for making an order prohibiting a strike, two conditions must
exist: first there must be an industrial dispute in existence and secondly, such dispute must
have been already referred for adjudication. 174
A strike or lockout shall be illegal if it is continued in contravention of an order
made under Sub-section (3) of Section 10 or Sub-section 4A of Section 10 A. The reason
underlying the prohibition is that industrial disputes should be tried in a spirit of amity
and no party should be in a position to coerce the other during the pendency of such
proceedings. It is for this reason that the appropriate Government has been empowered by
Section 10 (3) of the IDA in case of strike or lockout declared before the commencement of
such proceedings to prohibit their continuance while the dispute is being adjudicated. 175
The discretion given to the appropriate government to make a prohibition order has to
be exercised in accordance with the object and purposes of the Act. There cannot be any
absolute rule obliging the appropriate government to prohibit continuance of strike during
the pendency of proceedings because in some cases, strike may not affect production or
injure the community in general and, in such cases, the appropriate government may not,
in the exercise of its discretion, prohibit such continuance. 176 However, the exercise of
this unfettered discretionary power has been attacked by opposition political parties, and
perhaps not always without reason.

174 S T Employees Federation, Orissa v. State of Orissa, (1990) Lab. IC 1591(Orissa).

175 Keventers Karmachari Sangh v. Lt Governor, Delhi, 39 FLR 206 (1971).
176 Id. at 211.
 Instruments of Economic Coercion • 45 3

2. Section 10 (3) or 10A (4A) if Mandatory: Judicial Approach

The judicial interpretation has raised several problems. (i) Whether courts can quash the
order where the very nature of management action is in dispute? (iz) Whether Section 10(3)
violates Article 14 of the Constitution? (iii) Whether strike can be prohibited where one or
more and not all the demands were referred for adjudication? (iv) Whether workman should
be given any opportunity of show cause before strike is prohibited?
(a) Nature of the order of prohibition. In Express Newspapers Ltd177, the Court held that the
management could ignore the prohibitory order with impunity and, while remanding the
case to tribunal to determine whether there was lockout or closure, refused to quash the order.
The decision raises at least two problems. (1) What if the tribunal holds the management
conduct to be a lockout? 178 (2) Can the government issue the prohibitory order where the
very nature of management's action is in dispute?
(b) Can Government issue prohibitory orders where some and not all demands were referred?
Prior to 1978, even different benches of the court in their decisions in Workmen of Edward
Keventers (P) Ltd v. Delhi Administration179 and Keventers Karmachari Sangh v. Lt. Governor
Delhi180 were divided on the issue whether strike could be prohibited where one or more and
not all the demands were referred for adjudication? In the former case, a division bench of
the Delhi High Court took the view that if out of several demands only some were referred
for adjudication, the continuance of strike could be prohibited only regarding the dispute
with respect to the matter which had been referred to adjudication and prohibition of the
continuance of strike with respect to the matter which had not been referred to adjudication
was unwarranted. On the other hand, in the latter case another division bench of the same
High Court was of the opinion that even if one of the demands connected with strike had
been referred as industrial dispute, the strike would be in connection with such dispute
and the power to prohibit the continuance of strikes could be exercised. This conflicting
opinion among the two benches of the same High Court provided an opportunity to the
Supreme Court in Delhi Administration v. Workmen of Edward Keventers and Others,181 to
express its opinion on the aforesaid issue. Speaking for the Supreme Court, Justice Krishna
Iyer observed:

Two conditions are necessary to make Section 10 (3) applicable. There must
be an industrial dispute existing and such existing dispute must have been
referred to a board, labour court, tribunal or national tribunal under this
section, namely, Section 10 (1). Section 10 stands as a self contained code as it
were so far as this subject-matter is concerned ... Secondly, such dispute must
have been already referred for adjudication. Then, and then alone, the power
to prohibit in respect of such referred dispute can be exercised.
But having said so, his Lordship framed an inquiry:

Imagine 20 good grounds of dispute being raised in a charter of demands by

the workmen, and the appropriate government unilaterally and subjectively

177 Express Newspapers Ltd, (1962} 2 LLJ 227 (SC}.

178 Meghraj Kishangarh Mills Ltd, (1953) 2 LLJ 214 (Rajas than}.
179 Workmen of Edward Keventers (P) Ltd v. Delhi Administration, ILR (1969} Delhi 767.
18°Keventers Karmachari Sangh v. Lt. Governor Delhi, (1971} 2 LLJ 375.
181 Delhi Administration v. Workmen of Edward Keventers, (1978) 2 LLJ 209 (SC}.
454 • Industrial Relations and Labour Laws

deciding against the workmen on 19 of them and referring only one for
adjudication. How can this result in the anomalous situation of the workmen
being deprived of their basic right to go on strike in support of those 19
demands? 182
and came to the conclusion:

This would be productive not of industrial peace, which is the objective of

the Industrial Disputes Act, but counter-productive of such a purpose. If
government feels that it should prohibit a strike under Section 10 (3), it must
give scope for the merits of such a dispute or demand being gone into by some
other adjudicatory body by making a reference of all those demands under
Section 10 (1) as disputes. In regard to such disputes as are not referred under
Section 10 (1), Section 10 (3) cannot operate. This stands to reason and justice
and a demand which is suppressed by a prohibitory order and is not allowed
to be ventilated for adjudication before a tribunal will explore into industrial
unrest and run contrary to the policy of industrial jurisprudence.183
(c) No requirement to give show cause notice. The High Courts are divided on the issue
whether the government is bound to give show cause notice to the affected parties. Thus,
the Kerala High Court in AK Kalippa Chettiar & Sons v. State of Kerala 184 held that power
exercised under Section 10 (3) is a quasi judicial power and an order thereunder cannot be
passed without a reasonable opportunity to all those who would be affected by the order
to state and establish their case. On the other hand, the High Courts of Andhra Pradesh,
Karnataka and Bombay took the opposite view. Thus, in Eenadu Press Workers Union v.
Government ofAndhra Pradesh 185 and A P Electricals Equipment Corporation v. Its Staff Union 186,
the Andhra Pradesh High Court held that it was not necessary that the government should
issue a show cause notice to the affected parties before issuing the prohibitory order under
Section 10 and it would not violate the principles of natural justice. According to the Court,
the action under Section 10(3) is only preventive one, and if prior opportunities and hearing
is given before invoking Section 10(3), the object of restoring industrial peace and harmony
would be jeopardized and a self defeating one. Similar view was expressed by the Karnataka
High Court in Mysore City Powerloom and General Workers' Association v. State of Karnataka.
In this case, the petitioner challenged the validity of the order issued by the government of
Karnataka under Section 10(3) prohibiting the continuance of strikes and lockouts on the
ground that the appropriate government had failed to provide opportunity of being heard
and, therefore, the order was violative of the principles of natural justice. The Court rejected
the contention and observed:

Having regard to the nature and purpose of the power conferred under sub-
section (3) of Section 10 ... by necessary implication the application of rules of
natural justice stands excluded. The power conferred under the sub-section is
such as would call for an immediate action, on the part of the government in

182 Id.at 211.

183Ibid.
184 (1970) 1 LLJ 97 (Kerala).
185 1979 Lab. IC 330 (Andhra Pradesh).
186 1986 Lab. IC 1851 (Andhra Pradesh).
 Instruments of Economic Coercion • 455

order to ensure industrial peace, of prohibiting a lockout or strike, as the case

may be, when the dispute, in connection with which the lockout or strike was
resorted to, had been referred by the appropriate government for industrial
adjudication. To insist on compliance with the Rule of audi alteram partem
before passing an order under sub-section (3) of Section 10 is plainly contrary
to the common sense of the situation and would make the provision lifeless
and would defeat the purpose of the provision.
The aforesaid view was followed by the Bombay High Court in H B Khaitan v. State
of Maharashtra. 187
(d) Scope of discretion in refusing to prohibit the continuance of strike/lockout. In Cement
Works Karmcharis Sangh, Sawai Madhopur v. State of Rajasthan,188 on receipt of failure report
of conciliation officer, the government referred the dispute in the public utility services to
the Industrial Tribunal for adjudication. The Government, however, refused to take action
under Section 10 (3) to prohibit the continuance of lockout. No reason was stated as to
why lockout be allowed to continue even after the enforcement of rehabilitation scheme
by BIFR. On these facts, the Jaipur bench of the Rajasthan High Court held that the order
under Section 10 (3) was not proper and be set aside.
(e) Whether Section 10A(4A) is mandatory. Section lOA (4A) empowers the appropriate
government where -
(z) an industrial dispute has been referred to arbitration; and
(ii) it is satisfied that the person making a reference present the majority of each party
to issue a notification within a period of one month with a view to provide an opportunity
to those who are not parties to arbitration agreement but are concerned in the dispute to
present their case before the arbitrator or arbitrators. ls the aforesaid provision mandatory
or directory? One confronts with the divergence of judicial opinion on this question. The
Madras High Court in Madras Machine Tools Manufacturers v. Special Deputy Commissioner of
Labour 189 has held that the provisions of Section lOA (3A) to be mandatory because:

If Section lOA (3A) is not complied with, we fail to understand how an award
could ever be characterized as valid. There is an important legal consequence if
Section lOA (3A) is not complied with. No notification under Section lOA (4A)
can be issued prohibiting the continuance of that strike or lockout,19() which
not only would jeopardize the peace and harmony but divert the government
from issuing a notification under Section lO(A) (4A).
However, this aforesaid decision runs contrary to the views expressed by the Madhya
Pradesh High Court in Singh (K P) v. Gokhale (S K). 191 Here, the Court has held that the
procedural requirement in Section lOA (3A) is directory and is dependent on the satisfaction
of the appropriate government.

187 (1987)
Lab. IC 836 (Born).
188 (1999)
Lab. IC 503 (Raj.}.
189Madras Machine Tools Manufactures v. Special Deputy Commissioner of Labour, (1979) 2 LLJ 331.
190/bid.
191 K p Singh v. SK Gokhale, (1970) 1 LLJ 125.
456 • Industrial Relations and Labour Laws

Section 24 of the Industrial Disputes Act, 1947 defines 'illegal strikes and lockouts'. Sub-
section (1) provides that a strike or a lockout shall be illegal if-
(i) it is commenced or declared in contravention of Section 22 or Section 23: or
(iz) it is continued in contravention of an order made under Section 10 (3) or Section
lOA (4A).
Further, Sub-section (2) says that where a strike or lockout in pursuance of an industrial
disputes has already commenced and is in existence atthe time of the reference of the dispute
to a board, an arbitrator, labour court, tribunal or national tribunal, the continuance of such
strike or lockout 'shall not be deemed to be illegal', if:
(i) such strike or lockout was not, at its commencement in contravention of the provision
of the Industrial Disputes Act, 1947.
(iz) the continuance of such strike or lockout was not prohibited under sub-section (3) of
Section 10 or sub-section 4A of Section lOA of the Act.
Under Sub-section (3) of Section 24, a lockout is not illegal if it is declared in
consequence of an illegal strike. Similarly, a strike is not illegal if declared in consequence
of an illegal lockout.

A. Sanction
1. Penalty for Illegal Strikes and Lockouts. Section 26 (1) prescribes punishment to a
workman for commencing, continuing or otherwise acting in furtherance of a strike which
is 'illegal' under Section 24 of the IDA. The penalty in case of participation in an illegal strike
may extend with imprisonment for a term which may extend to one month, or with a fine
which may extend upto fifty rupees, or with both. Thus, in order to convict a person under
the Act, it is necessary to prove that:
(i) the accused is a 'workman';
(iz) the accused commenced, continued or otherwise acted in furtherance of a strike; and
(iii) the accused had the knowledge that the strike in question was illegal.
Likewise, Section 26(2) prescribes punishment to employers for commencing,
continuing or otherwise acting in furtherance of a lockout which is illegal under Section
24. The employer is punishable for imprisonment for a term which may extend upto one
month, or with fine upto fl,000 of with both for commencing, continuing or otherwise
acting in furtherance of illegal lockout.
A perusal of the aforesaid provision reveals that (i) the correlation between
imprisonment and fine is missing. Whereas Section 26 (1) prescribes the ratio of one month
imprisonment and/or f50 fine, Section 26 (2) provides one month imprisonment and/or
fl,000; (iz) the penalties under the section are different from penalties mentioned in Section
31 for contravention of Section 33192; and (iii) the duties imposed by Section 26 are statutory

192 Sun Rolling Mills, v. Their Workmen, (1949) LLJ 382.

 Instruments of Economic Coercion • 457

duties owed by the workmen or employers to the public, which could solely be enforced
by criminal procedure.
2. Penalty for Instigating or Inciting Illegal Strikes or Lockouts. Section 27,
unlike Section 26 (which is limited to workmen and employers) is wide enough to
cover all persons. Section 27 provides for imprisonment for a term which may extend
to 6 months, or with a fine which may extend to fl,000, or with both for 'instigation and
incitement of any strike or lockout which is illegal under the IDA'. In order to bring the
activities of a person within the mischief of Section 27, two conditions must be satisfied:
(i) the particular strike complained of is itself illegal, and (iz) the strike for which he incited
the workers to take part in is to his knowledge illegal. 193
The vires of this provisions was challenged in Raja Kulkarni and Others v. State of
Bombay. 194 The Supreme Court upheld the validity of the Section and observed that the
Industrial Disputes (Appellate Tribunal) Act, 1950 imposed no restriction either upon the
freedom of speech and expression of the textile workers or their right to form associations
or unions. Hence Section 27 of the Act was not void as being opposed to the fundamental
rights under Article 19(1) (a) and (c) of the Constitution.
Deshpande v. Ferro Alloy Corporation,195 the management and workmen (represented
by the office-bearers of the union) entered into a settlement on 30 September 1959. Such
a settlement was arrived at in the course of conciliation proceedings. Two persons (non-
workmen and officer of trade union) who were fully aware of the settlement incited
the workmen to go on strike in breach of settlement with effect from 24 September to
2 October 1960. A prosecution was launched against these two officers (non-workmen) of
trade unions. The magistrate convicted the accused under Section 27 of IDA. The decision
was upheld by the session judge. Then the concerned accused filed a petition before the
Andhra Pradesh High Court. Justice Kumarayya observed:

In fact the workers have a fundamental right to launch a strike, and, any
instigation or incitement to stage a strike would not therefore be illegal, unless
the particular strike complained of itself is illegal under the Act. The person
instigating would be guilty only when it is established that the strike which
he incited the workers to take part in is to his knowledge illegal. 1%
The Court accordingly upheld the order of conviction of lower court and held that
non-workmen inciting workmen bound by settlement to go on illegal strike were liable
under Section 27.
3. Penalty for Giving Financial Aid to Illegal Strikes or Lockouts. Whereas Section 25
prohibits financial aid to illegal strikes and lockouts, Section 28 provides penalty therefor.
The latter section reads:

(Any) person who knowingly expends or applies any money in direct

furtherance or support of any illegal strike or lockout shall be punishable with
imprisonment for a term which may extend to six months, or with fine which
may extend to one thousand rupees or with both.

193 Deshpande v. Ferro Alloy Corporation, (1964) 1 LLJ 613.

194 Raja Kulkarni and Others v. State of Bombay, AIR 1954 SC 73.
195 Deshpande v. Ferro Alloy Corporation, (1964) 1 LLJ 613.
196 Id. at 619.
45 8 • Industrial Relations and Labour Laws

It is clear from the aforesaid provisions that the person spending or applying money
must know that the strike or lockout is illegal. Thus, mens rea is a necessary element of an
offence under this Section. The provisions of this Section are attracted if the strike or lockout
is held to be illegal and not otherwise.

B. Criminal Proceedings
1. Permission of the Government. (a) Legislative response. Sub-section (1) of Section 34 of the
IDA provides:

No court shall take cognizance of any offence punishable under this Act or
of the abebnent of any such offence save on complaint made by or under the
authority of the appropriate government.
It follows that Section 34 (1) empowers the appropriate government (i) to make a
complaint or (ii) to authorize someone else to file a complaint. The object of the Section is
to prevent a frivolous, vexatious or otherwise patently untenable complaint being filed. 197
(b) Judicial Response. The seed of examining whether sanctioning authority knew the
facts alleged to constitute the offence was shown in Gokul Chand Dwarka Das Morarka v.
King. 198 Here the sanction given by the government mentioned the name of person to be
prosecuted, and the clause of the order which was alleged to have contravened. The sanction,
however, did not specify the facts alleged to constitute such contravention. On these facts
their Lordships of the Privy Council observed:

Under ... (Clause 23 of Cotton Cloth and Yarn (Control) Order,. .. sanction has
to be given to a prosecution for the contravention of any of the provisions of
the order ... he must be charged with the commission of certain acts which
constitute a breach, and it is to that prosecution that is for having done acts
which constitute a breach of the order-that the sanction is required.
The Privy Council accordingly held that there was no extraneous evidence to show
that the sanctioning authority knew the facts alleged to constitute a breach of the order, and
hence the sanction was improper and invalid.
In Feroz Din v. State of West Bengal 199, the above view received the approval of Supreme
Court. In the instant case, the authority given by the government did not specify the facts
constituting the offence. There was, however, ample evidence which stated that all facts
connected with the offence had been placed before the sanctioning authority and the sanction
had been granted after due consideration. It was consented by workmen that the authority
given was bad as it had been granted without reference to the fact constituting the offence,
and hence invalid. The Supreme Court, however, rejected the contention relying on Gokul
Chand Dwarka Das case.200

197Raj Kumar Gupta v. Lt Governor, Delhi, AIR 1997 SC 2680.

198 Gokul Chand Dwarka Das Morarka v. King., 75 I.A. 30.
199 Feroz Din v. State of West Bengal, (1960) 1 LLJ 244 (SC) This view was followed in State of Kerala v.
Chako, (1961) 2 LLJ 569 (Kerala).
200 Gokul Chand Dwarka Das Moraka v. King. op. cit. 30.
 Instruments of Economic Coercion • 459

In Raj Kumar Gupta v. Lt Governor, Delhi,2°1 the three-judge bench of the Supreme Court
interpreted the expression 'or under the authority of' under Section 34 to mean that 'the
appropriate government may authorize someone other than itself, even a non-government
servant to file a complaint under Section 34.' Earlier the court observed that under Section
34 'there is no limitation is regard to the party to whom authorization may be given. It is the
workman, the trade union and the employer who are most concerned with offences under
the Act and neither the terms of Section 34 nor public policy require that they should be
excluded from making such complaint.'
2. Court of Competent /urisdiction. Section 34 (2) of the IDA provides that no court
inferior to that of a metropolitan magistrate or a judicial magistrate of the first class is
competent to try an offence punishable under the Act.

C. Protection to Persons Refusing to take Part in an Illegal Strike and Lockout

The Industrial Disputes Act202 protects persons, refusing to take part or to continue to take
part in an illegal strike or lockout from (i) expulsion from any trade union or society or
(ii) any fine or any penalty, or (iii) deprivation of any right or benefit to which he or his
legal representatives would otherwise be entitled or from (iv) liability to be placed in any
respect, either directly or indirectly under the disability or at any disadvantage as compared
with other members of union or society. The immunity under this section is to prevail
notwithstanding anything contrary in the rules of the trade union or society.

A. Justified Strike and Lockout

In collective bargaining, the question of employment of striking employees and wages
for the strike or lockout period can form the subject of negotiation in the settlement of a
dispute. In adjudication system that possibility being closed, refusal to award wages for
strike or lockout period might lead to further unrest. To avoid this unhappy situation and
at the same time to protect the interest of working class and industry, tribunals and courts
have evolved the concept of 'justified' and 'unjustified' strike and lockout. In a series of
decisions the courts and tribunals have provided guidelines for determining whether a
strike or lockout is justified or not.
1. /ustified Strike. A strike would be held to be justified, when it was resorted to:
(i) after exhausting the remedies provided in the IDA and these being proved futile 203,
(ii) against an unfair labour practice or victimization on the part of the management204,
(iii) to press reasonable demands of workmen in a peaceful manner205, (iv) due to provocation

201 AIR 1997 SC 2600 at 2683.

202 Section 35.
203 See for instance, Swadeshi Industries Ltd v. Their Workmen, (1955) 2 LLJ 785 (LAT}; Swami Oil Mills v.

Their Workmen, (1953) 2 LLJ 785 (IT}; Crompton Greaves Ltd v. Their Workers, (1978) 36 FLR 329 (SC}.
204 See F W Heilgers and Co. Ltd v. Its Workmen, (1950) LLJ 231 (IT}; Ambika Jute Mills v. Their Workers,

(1954) 1 LLJ 835 (IT); See also Indian Machinery Mazdoor Union v. Indian Machinery Co. Ltd, (1956) 2
LLJ 408 (LAT}.
205 Vellanikara and Thuttil Rubber Estate v. Its Employees quoted in Govt. of India, Industrial Awards in

India, (1959), 113.

460 • Industrial Relations and Labour Laws

of the other party206, (v) as a measure of protest against retrenchment of workmen207, (vi)
as a measure of protest against suspension of fellow workmen208, (vii) against discharge
of union officials209, (viii) against refusal to recognize the union210, (ix) against emplo er's
refusal to pay advance wages211 , (x) on refusal to give advance for festival holidays 12 or
11
against government's refusal to refer the dispute for adjudication. 213
2. /ustified Lockout. A lockout is held to be justified if: (i) it was neither actuated nor
occasioned by any unfair labour practice on the part of employer214, (iz) it was adopted due
to security measure 215; (iii) it was necessitated by the conduct of the workmen216, (iv) it was
in consequence of a strike which was unreasonable 217, (v) it was declared after a tool down
strike was staged.218

B. Unjustified Strike and Lockout

1. Nature and Concept. The concept of unjustified strike seems to be based upon the
principle that in their dealings with the management, the workers should be considerate,
loyal and disciplined. The workers realize that the capacity to pay is dependent upon the
economic situation of the industry. In any case, they should adopt peaceful and orderly
method for venting their grievances. Similarly, the concept of the unjustified lockout is
based on the principle that it should not be declared in haste or by way of reprisal or
victimization, etc.
In short, strike and lockout should be declared as a last resort after all available
remedies, formal or informal, have been exhausted. When a strike or lockout situation
is brought before the tribunal or court, there is a tendency on the part of both workers
and management to blame each other. While in a unjustified strike most of the blame for
the strike rests with the workers, in unjustified lockout the blame for lockout rests with
employers.
2. Factual Analysis. Like justified strike or lockout, an unjustified strike or lockout
is a varying concept. No attempt has been made to give an exhaustive description or the
situation, which would give rise to an 'unjustified' strike or lockout.

206 Indian Cycle Mfg Co. Ltd v. Their Workers, (1951)1 LLJ 390 (IT); Certain Banks in the State of Punjab and
Delhi v. The Workmen, (1950) LLJ 425 (IT).
207 Dalmia Cement (Bharat) Ltd v. Their Workers, (1955) 2 LLJ 466 (LAT); Standard Mills Ltd v. Their

Workmen, (1953) 2 LLJ 135 (IT)., See also Crompton Greaves Ltd v. Its Workmen, op. cit., supra note 1.
208 Union Tile Works v. Their Employees, (1954) 2 LLJ 103 (IT).
209 Indian Cycle Mfg Co. v. Their Workers, (1952) 2 LLJ 390 (IT).
210 Associated Cement Co. v. Their Workmen (1952) 2 LLJ 255 (IT).
211 Bihar Fire Works and Potteries Ltd (1953) 1 LLJ 49 (LAT).
212 Caltex Ltd v. Their Workmen, (1954) 2 LLJ 51.
213 Swami Oil Mills v. Their Workers, (1953) 2 LCJ 785 (IT).
214 Ambika Jute Mills v. Their Workers, (1954) 1 LLJ 835 (LAT).
215 Hanuman Jute Mills v. Their Workmen, (1953) 2 LLJ 684 (LAT); Govind Sheet Metal Works and Foundry

v. Their Workmen (1956) FJR 363 (LAT).

216 Mahalaxmi Cotton Mills v. Their Workmen, (1952) 1 LLJ 68.
217 See also Highway Group ofEstates v. Industrial Tribunal, (1978) 2 LLJ 251 (IT); Certain Tailoring Concerns

v. Its Workmen, (1950) LLJ 280.

218 Pioneer Match Factory v. Their Workmen, (1951) 1 LLJ 43 (IT).
 Instruments of Economic Coercion • 461

(a) Unjustified strike. A strike is held to be 'unjustified' if it was resorted to: (i) to press
the demands of workers which according to community standards are unreasonably high,219
(iz) immediately on failure of conciliation proceedings without awaiting for reference,220 (iii)
without exhausting the remedies provided under the IDA,221 (iv) as a measure of protest
against assault of co-workers by the officer of the company, even after the assurance given
by the management to inquire into the incidents of assault222 or any other grievance of the
workmen, (v) even when the management was prepared from the beginning to settle the
dispute through the conciliation, adjudication or arbitration,223 (vz) force arbitration,224 (vii)
as a measure of protest against the transfer of the President of the Union,225 (viii) when the
workers did not co-operate with the authorities for peaceful solution,226 (ix) when the staff
association was hasty,227 (x) by using violence or acts of sabotage.228
(b) Unjustified lockout. A lockout was held to be unjustified if: it was with a view to
oblige workmen to accept the lower wages229 or the management's refusal to allow workers
to enter the factory 230 or it was declared on account of an unfair labour practice on the part
of the management231 or it was uninevitable and unjustified. 232

C. Determination of 'Justified' or 'Unjustified' Strike and Lockout

1. Reasonableness of Demand. Justified or unjustified strike or lockout, we have already
seen, determines whether workmen are entitled to wages for the period of strike or lockout.
The question, therefore, arises; how to ascertain the justification or otherwise of strike,or
lockout? First reading of Associated Cement Co. Ltd v. Their Workmen 233 leaves an impression
that reasonableness of demand is determinative. Observed the industrial tribunal:

I am of opinion (that) it was a legitimate and proper demand, that is to say,

as a demand it was proper and as such required due consideration... [The]
demand was one which the management should have given due consideration
and in respect of which the workmen were left withoutremedy, and held that

219 Ram Krishna Iron Foundry v. Their Workmen, (1951) 2 LLJ 372 (LAT); Chandramalai Estatev. Its Workers,
(1960) 2 LLJ 243 (SC); Indian Marine Service v. Its Workers, (1963) 1 LLJ 122 (SC); Viriji Bhai Laxman
Bhai v. New Commercial Mfg. Co., (1958) Born. Ind. Ct. Rep. 1153.
22°Chandramalai Estate v. Its Workers, (1960) 2 LLJ 243.
221 Hapkings and Williams Travancore Ltd v. Mineral Companies Staff Association, (1955) 2 LLJ 293 IT).
222 Jaypore Sugar Co. Ltd v. Their Employees, (1955) 2 LLJ 444 (LAT).
223 Digvijay Cement Co. Ltd v. Their Workmen, (1951) 1 LLJ 236 (IT); M/s Pierce Leslie & Co. Ltd published
in Kerala Gazette, No. 43 dt. 3 November 1959, 13; Ashok Textiles Pvt. Ltd case, Kerala Gazette,
October 13, 1959.
224 Lakshmi Vilasam Tile Works Kerala, Gazette No. 501 dt. 22 December 1959, 7.
225 Certain Banks in the State of Punjab and Delhi v. Workmen, (1950) LLJ 245 (IT).
226 Ashok Textile Pvt. Ltd v. Their Employees, published in Kerala Gazette, October 13, 1959, 13.
227 M/s Pierce Leslie and Co. Ltd Alleppey v. Their Workmen, published in Kerala Gazette, No. 43,
3 November 1959, 13.
228 Crompton Greaves Ltd v. Its Workmen, (1978) 36 FLR 329 (SC).
229 Shri Ram Silk Mills v. Their Workmen, (1952) 2 LLJ 862 (IT).
230 Bharat Barrel and Drumn Mfg Co. v. Their Workmen, (1952) 2 LLJ 532 (IT).
231 India Machinery Mazdoor Union v. Indian Machinery Co. Ltd (1956) 2 LLJ 408 (LAT).
232 Pioneer Match Factory v. Their Workmen, (1951) 1 LLJ 43 (IT).
233 Associated Cement Co. Ltd v. Their Workmen, (1952) 2 LLJ 255 (IT).
462 • Industrial Relations and Labour Laws

workmen had reasonable and justifiable cause for strike and hence workmen
were entitled to wages for such a period. Even independently of this decision,
other decisions of the Tribunals and Courts have also adopted the test of
reasonableness of demand.
2. Bonafides of Strike or Lockout. Reasonableness of demand is not the only relevant
factor to arrive at a conclusion whether a strike or lockout is justified or not. The bona fide of
the strike or lockout should be the most important factor for deciding the issue. It is necessary,
therefore, to describe the circwnstances when a strike or lockout can be deemed to be bona
fide. Thus, when a strike is resorted to without exhausting the remedies available to workmen
under the IDA or without waiting for the result of the conciliation officer's report sent to the
government or if it is not inevitable or if the strike is continued even after the assurance given
by the management or the preparedness of the management to settle the dispute by direct
negotiations or adjudication or when it is resorted to frequently and frivolously, predominant
motive being to ruin the industry, we may say it is not a bona fade strike.
The full bench of the labour appellate tribunal in Ram Krishna Iron Foundry v. Their
Workers 234 has held that a strike is normally a weapon to lodge a protest and as such it is
unobjectionable unless it is used for a purpose other than of giving an expression of the
grievances of the workers. A strike would normally be deemed to be unjustified unless the
reasons for it are absolutely perverse and unsustainable.
Similarly, a lockout may be deemed to be bona fide, if it is adopted as a security
measure to protect the personnel and property, or if it is in consequence of a strike which
is unreasonable or if it is launched after remedies provided in the IDA proved futile, or
when it is declared if the workmen do not show their willingness to settle the dispute
through negotiation. However, it might be mentioned that the illustrations given are not
exhaustive but illustrative. It is hoped that it would lessen the uncertainties connected with
classification of strike or lockout.
3. Can an Illegal Strike be /ustified. Even though the legislature has not provided
for any classification of illegal strike into justified and unjustified strike, the judiciary has
examined this question while dealing with the cases of dismissal of strikers and wages for
the period of strike/lockout.
The question came up for interpretation before the Supreme Court for the first time in
Indian General Navigation of Railway Co. Ltd v. Their Workmen. 235 The Supreme Court ruled
that a strike which is illegal cannot be characterized as 'perfectly justified' and these two
conclusions cannot in law co-exist. The Court reasoned;
The law has made a distinction between a strike which is illegal and one which is
not, but it has not made any distinction between an illegal strike which may be said to be
justifiable and one which is not justifiable.236
The Court accordingly depricated the tendency to condone illegal act in the statute.
An attempt to re-open the question was negatived in Model Mills v. Dharam Das237
wherein the Supreme Court held that even though the reasons for going on strike may be

234 Ram Krishna Iron Foundry v. Their Workers, (1954) 2 LLJ 372 (LAT).
235 Indian General Navigation of Railway Co. Ltd v. Their Workmen, (1960} 1 LLJ 13 (SC}.
236 (1960} 1 LLJ 13 at 22.
237 Model Mills v. Dharam Das, AIR 1958 SCS 1; See also Caltex India Ltd, Madras v. Their Workmen, (1955)

2 LLJ 693 (LAT}.

 Instruments of Economic Coercion • 463

completely justified, yet the illegal strike would be totally unjustified. Likewise, when a
strike is illegal, the question whether it is provoked or not is immaterial.238
The majority decision in Gujarat Steel Tubes v. Gujarat Steel Tubes Mazdoor Sabha 239,
however, shook the foundation laid in Indian General Navigation and ruled that 'mere illegality
of strike does not per se spell unjustifiability.' It visualized that between perfectly justified
and unjustified the neighbourhood is distinct.' In support of the aforesaid observation, the
Court heavily relied upon its earlier decision Crompton Greaves Ltd v. Their Workmen. 240 But
it may be pointed out that the Supreme Court misread the decision of Crompton Greaves Ltd
case when it said:

even if strike is illegal, it cannot be castigated as unjustified, unless the reasons

for it are entirely perverse or unreasonable.
Indeed, what it said was:

... in order to entitle the workmen to wages for the period of strike, the strike
should be legal as well as justified. A strike is legal if it does not violate any
provision of the statute. Again, a strike cannot be said to be unjustified unless
the reasons for it are entirely perverse or unreasonable. 241 A survey of the
aforesaid decisions, therefore leads us to the conclusion that the observation
of majority has left the issue whether illegal strike per se is unjustified wide
open and introduces uncertainty.

The problems of dismissal of strikers has assumed great significance in India since the
adoption of adjudication system. In the absence of any specific statutory provisions in the
industrial legislation, the Supreme Court has faced the problems relating to dismissal of
strikers. In deciding the questions of legality of management's action to dismiss strikers,
the courts have not been solely governed by the legality or illegality of the strike. According
to the Court, neither illegal strike authorizes the management to terminate the services of
strikers not the legal strike disallows the management to terminate their service. In such a
situation, the Supreme Court has made a significant contribution to industrial jurisprudence
by evolving a multifaced and highly complex concept of 'justified' and 'unjustified' strike to
decide the issue. The Court laid down the following grounds for intervention by tribunals
for the purpose of giving relief to the workers against wrongful dismissal:
(i) when there is want of good faith
(iz) when there is victimization or unfair labour practice
(iii) when the management has been guilty of a basic error or violation of principles of
natural justice, and

238 See Colliery Mazdoor Congress v. New Virbhoom Coal Co. Ltd (1952) LAC 219 Mahalaxmi Cotton Mills
Ltd v. Their Workmen, (1952) 2 LLJ 635 at 640 (LAT}.
239 Gujarat Steel Tubes v. Gujarat Steel Tubes Mazdoor Sabha, (1980} 1 LLJ 137 (SC}.
24°Crompton Greaves Ltd v. Their Workmen, (1978) 2 LLJ 80 (SC}.
241 Ibid.
464 • Industrial Relations and Labour Laws

(iv) when on the materials, the finding is completely baseless or perverse242

Where the order terminating services of workmen was held illegal, the courts have
generally directed reinstatement of workmen with or without wages.
The aforesaid norms have been formulated by the Supreme Court on at least three
important conditions. First, the industrial worker must be placed in such a position that
security of his service may not depend upon the caprice or arbitrary will of the employer.
Second, the industrial peace should be maintained. Lastly, the industry should be efficiently
managed. 243
Tribunals and courts have ruled that workers participating in a legal and justified
strike cannot be dismissed because if this is permitted, the statutory right of strike would
become ineffective even in a reasonable and bona fide situation. The court also ruled that
workers participating in a legal and justified strike cannot be denied reinstatement simply
on the ground that their places were filled by other persons. While laying down these rules,
the court was cautious in maintaining industrial discipline when it held that such a rule
was applicable only to peaceful strikers.
The legal and unjustified strike raises more complex issues. It has been recognized by
the Court that merely because the strike has been held to be legal, it does not foreclose the
possibility of dismissal of strikers. This line of thinking has been adopted in view of the fact
that sometimes the conduct of strikers has been objectionable, or they have been guilty of
serious misconduct or intentional damage to the property of concern or they have inflicted
personal injuries to the employees of the concern. It is also found that strike is sometimes
resorted to in haste. In the aforesaid situation, the courts have evolved the following rule
to regulate management's power to dismiss strikers in a legal and unjustified strike:
1. A workman cannot be dismissed for joining a strike which is not illegal but which is
simply unjustified;
2. The employer, however, will have the right to dismiss a workman joining an unjustified
strike:
(a) when the strike itself was not bona fide or
(b) when it was launched on other extraneous considerations and not solely with a
view to better the conditions of labour. 244
It has been settled in view of the Supreme Court decision in National Transport General
Co. v. Workman 245 and Punjab National Bank v. Their Employees 246 that workers wrongfully
dismissed for participating in a legal but unjustified strike are normally entitled to
reinstatement notwithstanding the fact that their places were filled by other persons during
the strike. Further, workers are entitled to reinstatement if they participated in a strike with
was occasioned on account of any unfair labour practice or victimization on the part of
the employer. But it is exceedingly doubtful in view of the decision in Spencer & Co. Ltd v.

242 Indian Iron & Steel Co. v. Their Workmen, AIR 1958 SC 130.
243 See Smith Stain Street and Co. v. Smith Stain Street Worker's Union, (1953) 1 LLJ 67 (LAT}; see also
Swami Oil Mills v. Their Workmen, (1953) 2 LLJ 785; Swadeshi Industries v. Its Workers, (1955) 2 LLJ
785 (LAT}.
244 Ram Krishna Iron Foundry v. Their Workmen, (1954) 2 LLJ 372,375 (LAT).
245 Civil Appeal No. 312 of 1956 decided by the Supreme Court on 2 January 1957.
246 Punjab National Bank v. Their Employees, (1959) 2 LLJ 666 (SC}.
 Instruments of Economic Coercion • 465

Their Workmen,247 Swadeshmirtran & Co. Ltd v. Their Workmen 248 and Bangalore Silk Throwing
Factory v. Their Workmen 249 that workmen participating in a legal and unjustified strike (who
were substituted by other persons) provided unfair labour practice is absent, can claim
reinstatement. It is equally doubtful if the workmen can claim reinstatement for participating
in an illegal strike for non-observance of the provisions of certified standing orders.
It has also been well-established that mere participation in an illegal strike would not
justify the dismissal of strikers.
The ruling of the Supreme Court in Model Mills v. Dharam Das250 and IM H Press, Delhi
v. Addl. Tribunal 251 suggests that the management can dismiss the strikers participating in an
illegal strike according to the rules of standing orders of the company. The Court, however,
pointed out that even in this situation, the rules of natural justice must be followed. This
view raises two significant questions: First, is it desirable in the interest of industry to allow
wholesale dismissal or strikers? Second, whether the rule equally applies to peaceful strikers
as against violent strikers? Indeed, the view taken by the Court in the above case is not in
conformity with its decision in Punjab National Bank. v. Their Workmen 252 and Indian General
Navigation v. Their Workmen. 253 The end of justice would be served if a lesser punishment
is given to strikers, participating in an illegal strike where their conduct has been peaceful.
The Supreme Court in Burn & Co. Ltd v. Their Workmen 254 has deprecated the tendency
of the management to discriminate among strikers while terminating their services in the
absence of clear distinction. It has to be proved in each case that certain strikers who have
been singled out for disciplinary action can be treated differently on rational and reasonable
consideration.
The Supreme Court255 has adopted a pragamatic approach in dealing with the question
of management's power to dismiss peaceful strikers even though they happen to participate
in an illegal strike. It has distinguished between peaceful and violent strikers. It ruled that
the punishment of dismissal may be imposed upon violent strikers. But, where the strikers
remained peaceful, such extreme punishment of dismissal would not be justified. Further,
it would not be in the interest of industry and workers themselves.
The process of distinguishing one case from the other is best depicted in Bata Shoe Co.
v. D N Ganguli256 and IM H Press v. Addl. Tribunal.257 Here the Supreme Court observed
that the peaceful strikers should not be subjected to extreme penalty of dismissal as it would
lead to mass dismissal of workers. However, the Court at the same time ruled that in the
process of distinguishing the case, the context in which judgements were given should
always be kept in mind.

247 Spencer & Co. Ltd, v. Their Workmen, (1956) 1 LLJ 714 (LAT).
248 Swadeshmitran & Co. Ltd v. Their Workmen, (1952) 1 LLJ 479 (IT).
249 Bangalore Silk Throwing Factory v. Their Workmen, (1957) 1 LLJ 435 (LAT).
250 Model Mills v. Dharam Das, AIR 1958, SC 311.
251 IM H. Press, Delhi v. Addl. Tribunal, (1961) 1 LLJ 499 (SC).
252 Punjab National Bank v. Their Workmen, (1959) 2 LLJ 666.
253 Indian General Navigation Co. v. Their Workmen, (1960) 1 LLJ 13 (SC).
254 Burn & Co. Ltd v. Their Workmen, (1959) 1 LLJ 450 (SC).
255 See Indian General Navigation and Rly Co. v. Their Workmen, op. cit., Gujarat Steel Tubes v. Gujarat Steel

Tubes Mazdoor Sabha, (1980) 1 LLJ 137 (SC).

256 Bata Shoe Co. v. D N Ganguli, AIR 1961 SC 1158.
2571 M H. Press v. Addl. Tribunal, (1961) 1 LLJ 499.
466 • Industrial Relations and Labour Laws

The Supreme Court258 has consistently held that the order of dismissal of strikers by
the management in violation of Section 33 is illegal. In such situation they are entitled to
reinstatement.
The Supreme Court259 has given due importance to the observance of the provisions
of Standing Orders of the Company. If the dismissal was found to be in accordance with
the principles of natural justice the Court refused to interfere in the management's order of
dismissal of strikers. The only exception to this rule has been the case in which a striker is
dismissed for participating in a legal and justified strike.
The Supreme Court260 has consistently held that one of the functions of the industrial
tribunals is to scrutinize the action taken by the management in dismissing the strikers in
order to satisfy itself that proper domestic inquiry has been held and the principles of natural
justice, have been complied with. Thus, Lord Hewart verdict that 'justice should not only
be done' is regarded to a considerable extent in matters of dismissal of strikers.
It has now been settled through the decisions of Supreme Court261 that normal relief in
cases of wrongful dismissal is reinstatement. But in so ordering the tribunal is expected to be
inspired by a sense of foul play towards the employees on the one hand and considerations
of discipline on the other. The relief of reinstatement is granted on the basis of social justice.

There is no specific provision either in the Industrial Disputes Act, 1947 or in other labour
legislation for determining the question of wages for the period of strike or lockout. In the
absence of such a provision, the judiciary has evolved certain norms to fill this gap.
In Statesman Ltd v. Their Workmen, 262 certain workmen went on an illegal strike.
Thereupon the management declared a lockout. The question arose whether the workmen
are entitled to wages for the period of illegal strike or illegal lockout? The Supreme Court
observed:

If the strike is illegal, wages during the period will ordinarily be negatived
unless considerate circumstances constrain a different course. Likewise, if the
lockout is illegal, full wages for the closure period have to be 'worked out', if
one may use the expression. But in between lies a grey area of twilit law. Strictly
speaking, the whole field is left to the judicious discretion of the tribunal. Where
the strike is illegal and the sequel of a lockout legal, we have to view the whole
course of developments and not stop with examining the initial legitimacy.
If one side or other behaved unreasonably or the overall interests of good
industrial relations warrant the tribunal making such directions regarding
strike period wages as will meet with justice, fair play and pragmatic wisdom,
there is no error in doing so. His power is flexible.

258 See Punjab National Bank v. Their Workmen, op. cit: Shalimar Works Ltd v. Workmen, AIR 1959 SC 1217.
259 See Model Mills Ltd v. Dharam Das, AIR 1958 SC 311.; Bata Shoe Co. (Pvt.) Ltd v. D N Ganguli, op. cit.
260 See Indian General Navigation, and Rly Co. v. Their Workmen, (1960) 1 LLJ 13.
261 See Buckingham and Carnatic Mills Co. Ltd v. Their Workmen, (1951)2 LLJ 314 (LAT); Punjab

National Bankv. Their Workmen op. cit; ML Base & Co. (Pvt.) Ltd v. Its Employees, (1961) 2 LLJ 107 (SC).
262 (1976) 1 LLJ 484 (SC).
 Instruments of Economic Coercion • 467

From the aforesaid observation, it is evident that irrespective of the illegality of the
strike, the tribunal has a discretion to pass such order regarding wages during the strike
period as 'justice, fair play and pragmatic wisdom' dictate. This decision was given by the
bench of three judges.
In the latter decision in Crompton Greaves Ltd v. Workmen 263, a bench of two judges of
the Supreme Court without referring to its judgement in Statesman Ltd supra has observed
that in order to enable the workmen to wages for the period of the strike, the strike should
be legal as well as justified. Justice Krishna Iyer was a party to both the decisions. Yet no
attempt has been made in the latter case to explain the earlier observations.

A. Effect of Illegality of Lockout on Payment of Wages

Courts264 have held that, if the lockout is illegal, full wages for the period of lockout shall
have to be paid to workers.

B. Effect of Justification of Strike on Wages

No doubt strike is a legitimate weapon in the armoury of working class but it should be
sparingly used depending upon the exigencies of the case, particularly in the conditions
prevailing in India. With a view to discouraging the misuse of the weapon of strike, the
tribunal and courts have applied the concept of 'justified' and 'unjustified' strike in cases
where strike is legal. They held that in case of unjustified strike, workmen are not entitled
to wages.
1. Strike Declared Against Unfair Labour Practice or Victimization on the Part of
Management. The courts and tribunals while deciding the question of wages for the
period of strike have generally taken into account the fact whether such strike was
occasioned due to unfair labour practice on the part of employer. In such cases, the
workmen have been allowed wages for the period of strike.
2. Strike Declared to Press Reasonable Demands of Workmen in a Peaceful Manner. The
general policy of the tribunals and courts265 while dealing with the question of strike
has been to take into account the right of workers to resort to strike for redressal of
their genuine grievances, in tackling such questions tribunals emphasized that strike
is justified if it is resorted to in a peaceful manner. Where these conditions are satisfied
tribunals and courts have awarded wages for the period of strike.
3. Strike due to Provocation of the other Party. Another consideration taken into account
by the tribunals and courts266 in deciding the question of payment of wages for the
strike period is whether the strike was provoked by the action of the other party. In
such a situation, the tribunals and courts granted wages for strike period if the strike

263 (1978) 2 LLJ 80.

264 See Statesman Ltd v. Their Workmen, (1976) 1 LLJ 484 (SC); North Brook Jute Co. Ltd v. Their Workmen,
(1960) 1 LLJ 480 (SC).
265 See Vellanikara and Thutil Rubber Estate v. Its Employees, quoted in Government of India, Industrial

Awards in India, PSN Motors Ltd v. Their Workmen, 12 FJR 192.

266 India Cycle Mfg. Co. Ltd v. Their Workers, (1951) 1 LLJ 390 (IT); cf Certain Banks in the State of Punjab
and Delhi v. Their Workmen, (1950) LLJ 425 (IT).
468 • Industrial Relations and Labour Laws

was provoked as a consequence of unreasonable stand adopted by the management

in relation to workers' demand, provided of course the strike was not illegal.
4. Strike as a Measure of Protest against Retrenchment of Workmen. Tribunals and
courts267 have recognized that strike is a weapon to register a protest including a
protest against retrenchment and it cannot be said to be unjustified unless the reasons
for it are absolutely perverse of unreasonable.

C. Effect of Legal but Unjustified Strike on Wages

1. Strike to Press the Demands of Workers Which According to Community Standards
are Unreasonably High. One of the important considerations which has been taken
into account by tribunals and courts in reaching the conclusion that a strike is
'unjustified' is nature of demands made by the workers. If the demands of the workers
are unreasonably high or frivolous with the dominant nature to ruin the industrial
establishment, the strike is held to be unjustified and the workers have been refused
wages for the strike period.268
2. Strike Resorted Immediately after the Failure of Conciliation Proceedings without
Awaiting for Reference. In order to bring about settlement of disputes, the conciliation
officer is enjoined under the IDA (z) to expeditiously investigate the dispute and all
matter affecting the merits and the right settlement thereof, and (ii) to do all such things
as he thinks fit for the purpose of inducing the parties to come to a fair and amicable
settlement of the dispute. With a view to give time to the government to from an opinion
for making a reference, the Courts have held that strike resorted to immediately after
the failure of conciliation proceeding without awaiting for reference to be made to the
tribunal is unjustified, and accordingly denied wages for strike period.
In Chandramalai Estate v. Its Workmen 269, the union of workmen of the estate raised
certain demands. The conciliation proceedings in respect of these items of the disputes
ended in failure on 30 November 1955. Without awaiting further and without asking the
State Government to make a reference under Section 10 of the IDA, the workmen went on
strike from 9 December 1955, and the strike was withdrawn on 5 January 1956, the day when
the dispute was referred to the industrial tribunal for adjudication. One of the questions
for determination before the industrial tribunal was whether the strikers were entitled to
wage? The industrial tribunal granted 50 per cent of the total emoluments for the strike
period. Aggrieved by the order of the tribunal, the management filed an appeal before the
Supreme Court. Speaking for the Court, Justice Das observed:

In our opinion the workmen might well have waited for some time after
conciliation efforts failed before starting a strike and in the meantime to have
asked the government to make the reference. They did not wait at all. The
conciliation efforts failed on 30 November 1955 and on the very next day the
union made its decision on strike and sent the notice of the intended strike
from 9 December 1955, and on 9 December 1955 the workmen actually struck

267 See Dalmia Cement Ltd v. Their Workers, (1955) 2 LLJ 466 (LAT); Standard Mills Ltd v. Their Workmen,
(1953) 2 LLJ 135.
268 Ram Krishna Iron Foundry v. Their Workers, (1954) 2 LLJ 572 (LAT); Viriji Bhai Laxman Bhai v. New

Commercial Mfg. Co., (1958) ICR Bombay, 1153.

269 Chandramalai Estate v. Its Workmen, (1960) 2 LLJ 243 (SC).
 Instruments of Economic Coercion • 469

work. The government appears to have acted quickly and referred the dispute
on 3 January 1956. It was after this that the strike was called off. We are unable
to see how the strike in such circumstances could be held to be justified.270
The Court accordingly held that workmen were not entitled to wages for such period.
In Syndicate Bank v. Umesh Nayak271 it was held that if a strike is legal but unjustified,
it does not save such workers from losing their salary for strike period. It only saves them
from disciplinary action.
3. Strike Declared without Exhausting the Remedies Provided under the Act. It has
been observed elsewhere that strike is a recognized weapon of the workmen to be resorted
to by them for asserting their bargaining power for backing up their collective demands
upon an adamant employer. But in order to avoid the misuse of the weapon, the Court272
cautioned that it should be used as a last resort when all other avenues for settlement of
industrial dispute, as provided under the IDA have beer exhausted and proved futile.
4. Strike Resorted to in Haste. The tribunals and courts273 have deprecated the tendency
of workers to strike in haste.
5. Use of Violence during Strike. It has now been settled that the use of force, or
violence or act of sabotage resorted to by the workmen would disentitle them for wages.
Thus, in Crompton Greaves Ltd v. Its Workmen, the Supreme Court ruled, that the use of force
or violence or acts of sabotage resorted to by the workmen during a strike disentitle them
to wages for the strike period.274

D. Effect of Legal but Unjustified Lockout on Payment of Wages

Tribunals and courts have generally awarded wages to workmen when a lockout was legal
but unjustified. In Bharat Barrel and Drum Mfg Co. v. Their Workmen 275, certain workmen
turned up for work at the appointed hour on a certain date. Finding the doors locked, they
waited half an hour and then left. Thereupon the management locked its door and demanded
explanation from workmen for not attending the work on concerned day. The tribunal held
that workmen were entitled to wages for the lockout period.
The labour appellate tribunal in Italkholic Tea Estate v. Their Workmen 276 held that
workmen cannot be denied wages on the ground of their failure to report for work every
day during the lockout period because lockout implies that the employer would not allow
the workmen concerned in the dispute to work and the act of the employer, in declaring
lockout amounted to an anticipatory breach of contract on his part under any obligation to
present themselves for work. 277

270 (1960) 2 LU 243 at 246.

271 (1994) (5) JT 648.
272 Hapkings and Wiliam (Travancore Ltd v. Mineral Companies Staff Association), (1955) 2 LLJ 293 (LT).
273 See M/s. Pierce Leslie and Co. Ltd v. Their Workmen, published in Kerala Gazette No. 43, 3
November 1959, 13, quoted in Government oflndia, Supplement to Industrial Awards in India, 80
(1961);Ashok Textiles Pvt. Ltdv. Their Employees, published in theKeralaGazette,October13, 1959,3.
274 Crompton Greaves Ltd v. Its Workmen, (1978) 2 LLJ 80, 82 (SC).
275 Bharat Barrel and Drum Mfg. Co. v. Their Workmen, (1952) 2 LLJ 532 (IT).
276 Italkholic Tea Estate v. Their Workmen, (1954) 2 LLJ 717 (LAT).
277 1d. at 718.
47o • Industrial Relations and Labour Laws

E. Problem of Unjustified Lockout following Unjustified Strike and Vice Versa

Tribunals and courts are often faced with the situation where unjustified strike was followed
by unjustified lockout and vice versa. Faced with this situation, the Supreme Court in India
Marine Service Pvt Ltdv. Their Workmen 278 evolved the doctrine of 'apportionment of blame'.
To quote the Supreme Court:
Where, however, a strike is unjustified and is followed by a lockout which becomes
unjustified, a case of apportionment of blame arises.
The aforesaid view was followed in Northern Dooars Tea Company v. Workmen of Dern
Dima Tea Estate. 279

F. Deduction of Full Day's Wages for Absence during Crucial Portion of the Day
The Supreme CourtinBankofindiav. T S Kelawala and S UMotors (P) Ltdv. Their Workmen 280
has settled the controversy relating to the power of the management to deduct for the portion
of the day. Prior to the Supreme Court decision in Bank of India case, the High Courts were
divided on the issue whether the employer can deduct full day's wages for absence for a
portion of the day. Thus, the Calcutta,281 Kerala,2 82 Punjab and Haryana 283 and Madras284
High Courts took the view that it is not only permissible for the employer to deduct wages
for the hours of the day for which the employees are absent from duty but in certain cases
it is also permissible to deduct wages for the whole day even if the absence is for few hours.
On the other hand, the single judge of the Madras High Court in V Ganesan v. State ofIndia 285
and the division bench of the same High Court in State Bank of India v. Ganesan 286 took the
opposite view. They held that 'it is not possible to clothe the employer with the power or
a right to deduct or withhold the emoluments of the employee even for the hours during
which he worked.' Be that as it may, the Supreme Court in the instant case ruled that it is
permissible to deduct full day's wages for absence during crucial portion of the day. Thus,
in this process it emphasized the need for maintaining uninterrupted production, efficiency
and discipline in industry and thereby demonstrate the vital role of judicial process in
building the nation.

G. Other Problems
The Calcutta High Court in Amalendu Gupta v. Life Insurance Corporation of India 287 found
itself faced with two problems, namely, (z) whether justifiability of strike is a pure question
of fact which can be decided in a writ petition? and (ii) whether the Court can mandate the

278 Indian Marine Service Pvt. Ltd v. Their Workmen, AIR 1963 SC 528.
279 Northern Dooars Tea Company v. Workmen of Dem Dima Tea Estate, (1964) 1 LLJ 436 (SC}, See also
Pradip Lamp Works v. Their Workmen, (1969} 38 FJR 20 (SC}; Statesman Ltd v. Their Workmen, (1976)
1 LLJ 484 (SC}; Highway Group of Estates v. Industrial Tribunal, (1978) 2 LLJ 251 (Madras).
280 (1990} 2 LLJ 39.
281 (1978) 2 LLJ 117: Sukumar Bandyopadhyay v. State of West Bengal, (1976) Lab. IC 1980.
282 R N Shenoy v. Central Bank of India, (1984) Lab. IC 1493.
283 Dharam Singh v. Bank of India, (1979) Lab. IC 1079.
284 R Rajamanickam v. Indian Bank, (1981} 2 LLJ 367; V Ramachandran v. Indian Bank (1979) 1 LLJ 122.
285 (1981} 1 LLJ 64.
286 (1989} 1 LLJ 109.
287 (1982} 2 LLJ 332.
 Instruments of Economic Coercion • 4 71

Life Insurance Corporation (LI C) to pay the striking employees their wages for the period
of strike. The Calcutta High Court answered both the questions in the affirmative. On the
first issue the Court held that it may decide the question whether the strike was justified or
not. As regards the second issue, the Court observed:
If I refuse to exercise my powers under Art. 226 of the Constitution and to deny the
reliefs prayed for in this petition, the employees of the respondent No. 1, who have been
affected by the impugned circulars and who I understand, will number about 45,000 will
have to fall back on other remedies which may be available to them under the law. When
the respondent No. 1 and the Central Government took recourse to various measures in
order to prevent the employees from getting the bonus in terms of the settlement, it is
unlikely that the workmen will get a quick or efficacious relief by taking recourse to the
remedies available to them under the Act. In my view, the workmen have already been
driven from pillar to post and in spite of repeated orders of the highest Court of the land,
the respondent No. 1 did not pay them the bonus to which they were legally entitled, till
they resorted to the strike. It must also he borne in mind that the workmen immediately
called off the strike on 15 April 81 on receiving an assurance from the respondent No. 1
that the bonus will be paid.288
Swastic Textile Engineerings P. Ltd v. Rajan Singh Sant Singh 289 raises three issues namely,
(i) whether deduction of wages after withdrawal of illegal strike amounts to a penalty?
(ii) whether deduction of wages after withdrawal of strike amounts to change in conditions
of service? (iii) whether insistence on workmen to execute a written undertaking not to
go on strike in future and seek pardon is valid? In this case certain workmen went on an
alleged illegal strike. After termination of strike, the management asked them to give an
undertaking that they would not go on such strike. However, the concerned workmen
refused to furnish such an undertaking, and therefore they were not allowed to resume their
duties. On failure of the conciliation proceedings, the aggrieved workmen filed a complaint
under Section 34A. Further, the management deducted their wages for the strike period. The
tribunal held that the strike was not illegal. It accordingly held that each of the concerned
workman was entitled to wages for the period of strike. The tribunal further held that it
was neither fair nor legal on the part of the management to insist that its workmen should
execute an unconditional apology and an execution of such writing amounted to change in
the conditions of service. Against this order, the management filed a petition under Article
227 of the Constitution challenging the order of the tribunal in regard to wages for the
period of strike. The Gujarat High Court held that (z) insistence upon the execution of the
writing amounted to a change in the conditions of service of workmen because they were
not bound to execute such writing; (ii) deduction of wages amounted to a change in the
conditions of service because employer had no right to deduct wages; and (iii) withholding
of wages amounted to imposition of penalty under the Standing Orders.

288 (1982) 2 LLJ 332 at 34 1.

289 (1984) 2 LLJ 97.
Lay-off, Retrenchment,
Transfer and Closure 20
A. The Perspective
In the day-to-day running of business, management is often compelled to take measures to
effect economy and avoid waste. Some of these actions have a direct bearing on the workmen
employed by it. For instance, management may not temporarily require the services of
certain workmen on account of 'shortage of coal, power, raw material, accumulation of
stock, breakdown of machinery, strike by workmen in interdependent sections of the
establishment, or for any other similar reason. Under these situations, an employer does not
temporarily need the services of the normal strength of the workmen. In these circumstances,
he may well terminate the services of surplus workmen. But because he expects to resume
his normal work and the workmen wish to continue to work, the institution of lay-off has
been evolved. Herein, workmen are not discharged but nevertheless, they do not receive
their full wages. It is because of this anomaly that the right of lay-off compensation has
been established by practice, contract, standing orders or statutory provisions. With the
introduction of industrial adjudication system on an all-India basis, workmen sometimes
take advantage of the existing legal provisions. Their attitude of taking advantage of the
existing legal provisions is strongly demonstrated by their response to lay-off. An early
attempt was made to suggest that management's action in laying-off its workmen amounted
to a lockout1. Further, quite apart from the general prohibition contained in Section 23, both
lay-off and lockout were held to be within the mischief of Section 33 (2). However, after
the Amending Act of 1953, which defines 'lay-off' and provided compensation therefor,
workmen generally claimed that lockout amounted to lay-off and consequently, the locked-
out workmen were entitled to lay-off compensation.
It is unfortunate that the provisions relating to lay-off compensation were incorporated
in the Industrial Disputes Act,1947, only after 6 years of the operation of adjudication system
on an all-India basis. During this long period, several cases involving lay-off came before the

1 See, for instance, Annamalai Timber Trust Ltd (1950) LLJ 994 (IT).
4 7 4 • Industrial Relations and Labour Laws

tribunals and courts and they decided the question of payment of compensation. But a study
of the awards and decisions reveals that there was no uniformity in the rates of compensation.
Further, norms were irreconcilable. Quite apart from these difficulties, the Industrial Disputes
Act, 1947 as amended in 1953, did not contain any provision for preventing lay-off. There had
been many cases of large-scale lay-offs in big industrial concerns in the 1970s. This caused
great hardship to workmen. In order to avoid this hardship, the National Apex Body as well
as the state labour ministers urged the Central Government to bring out certain measures
for having a check on such arbitrary action of the management. Accordingly, the Parliament
enacted the Industrial Disputes (Amendment) Act, 1976 which made the prior approval of
the appropriate government necessary in industrial establishments employing 300 or more
workmen. 2 The 1982 and 1984 Amendment not only extended the provisions contained in
1976 Amendment to 'industrial establishments'3 employing 100 or more workmen but has
made a drastic amendment after taking into account the observations of the Supreme Court
in Excel Wear case.4

B. Nature of Lay-off
1. General. Strictly speaking, lay-off is neither a temporary discharge of the workman
nor a temporary suspension of his contract of service.5 It is merely a fact of temporary
suspension of his contract of service. It arises when there is the 'failure', 'refusal' or
'inability' on the part of the employer to give employment to his workmen for reasons
beyond the control of the employer. Further, lay-off does not end the employer-
workmen relationship.
2. Lay-off and Lockout. Lay-off and lockout have some common features. Both are
the phenomena of continuing business. Both are acts of the employer. Both involve
subsisting employer-workman relationship. But there are strong reasons to distinguish
lay-off and lockout. This was brought out by the Supreme Court in Kairbetta Estate v.
Rajmanickam. 6

Stated broadly, lay-off generally occurs in a continuing business, whereas

lockout is the closure of the business. In the case of a lay-off owing to the
reasons specified in Section 2 (kkk), the employer is unable to give employment
to one or more workmen. In the case of lockout, the employer closes the place
of business and locks out the whole body of workmen for reasons which have
no relevance to causes specified in Section 2(kkk) ...... .

2 Section 25 M.
3 Under Section 25 L, it is provided that for the purposes of Chapter VB (a) 'industrial establishment
means (i) a factory as defined in clause (m) of Section 2 of the Factories Act, 1948 (63 of 1948);(ii)
a mine as defined in clause(7) of sub-section(l) of Section 2 of Mines Act, 1952 (35 of 1952),or (iii)
a plantation as defined in clause (1) of Section 2 of Plantations Labour Act, 1951 (69 of 1951); (b)
notwithstanding anything contained in the sub-clause (ii) of clause (a) of Section 2. (ii) in relation to
any company in which not less than 51 per cent of the paid-up share capital is held by the Central
Government or (iii) in relation to any corporation not being a corporation established by or under
any law made by Parliament, the Central Government shall be the appropriate government.
4 Excel Wear v. Union of India, (1978) 2 LLJ 527 (SC).
5 Workmen v. Firestone Tyre and Rubber Co. (1976) I LJ 493 (SC).
6 Kairbetta Estate v. Rajmanickam, (1960) 2 LLJ 275 (SC).
 Lay-off, Retrenchment, Transfer and Closure • 4 7 5

It may be pointed out that the broad proposition laid down by the Supreme Court does
not clearly reflect the true legal position. First, both lay-off as well as lockout are phenomena
of a continuing business. Second, it is not true that only one or more but not all the workmen
of an establishment are denied job opportunities in the case of lay-off or that all the workmen
of the establishment and not only a few of them are always put under economic pressure in
a lockout. Third, the use of the expression 'closure' is exceedingly vague. It is theoretically
possible that there may be lockout only in a section of the establishment and the rest of the
establishment may be working.7
Lockout is an instrument of economic coercion. It is a means to an end and not an end
in itself, the particular means adopted being putting of economic pressure on recalcitrant
workmen. A lay-off on the contrary, is an economy measure; while it does affect the
workmen, the motive of putting economic pressure is absent. There is yet another basis of
distinction. Whereas in lay-off, statute makes it obligatory on the part of the employer to
pay compensation in accordance with the provisions of the Industrial Disputes Act, 1947; in
case of lockout, it is discretionary with the tribunals to grant wages for the period of lockout
depending upon the situations.
3. Lay-off and Retrenchment. Lay-off and retrenchment have some elements in common.
Both are measures of economy. Both are declared by the employer. In both the cases
statutory compensation must be paid. But, they differ in other respects. Whereas there
is a subsisting employer-workman relationship during lay-off, that relationship is
terminated in case of retrenchment. There is yet another basis of distinction. While
lay-off is temporary, retrenchment is a permanent measure. Moreover, if the term
'retrenchment' is included within the term 'lay-off', one fails to understand why the
legislature has defined these two terms separately.
4. Lay-off and Closure of Business. Lay-off as well as closure have some common
features. Both are measures of economy adopted by the employer. Both require
statutory compensation. But they differ in several respects. Lay-off is temporary while
closure is permanent, In lay-off, employer-workman relationship subsists but such
relationship is terminated in closure of business.

C. Statutory Definition of Lay-off

Prior to 1953, the word 'lay-off' was not used in any legislative enacbnent in India. Section
2 (kkk) 8 of the Industrial Disputes Act, 1947, defines 'layoff' to mean the 'failure', 'refusal'

7 For details see, Suresh C Srivastava, 'A Forgotten Element of Lockout'. 1966 Ban LJ 145.
8 Section 2 (kkk) of the Act defines 'lay-off' (with its grammatical variations and cognate expressions},
to mean: the failure, refusal or inability of an employer on account of shortage of coal, power or
raw materials or the accumulation of stocks or the breakdown of machinery or natural calamity
or for any other connected reason to give employment to a workman whose name is borne on the
muster-rolls of his industrial establishment and who has not been retrenched.
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 on 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 the second-half of the shift for
(Contd ... )
4 7 6 • Industrial Relations and Labour Laws

or 'inability' on the part of employer to give employment to any number of workmen on

account of:
(a) shortage of coal, or
(b) shortage of power, or
(c) shortage of raw material, or
(d) accumulation of stock or
(e) breakdown of machinery or
(f) for any other reason.
The definition requires further analysis. First, the definition mentions three acts,
namely, 'failure', 'refusal', or 'inability' on the part of the employer. The absence of these
circumstances will not amount to 'lay-off' within the meaning of Section 2 (kkk) of the Act.
Second, the expression 'for any other reason' occurring in Section 2 (kkk) is ejusdem generis
with the preceding expression. 9 Third, the definition requires subsisting employer workman
relationship during lay-off.

D. Management's Right to Lay-off

1. Under the Traditional Law. Under the traditional law, management had a right to
lay-off its workmen and adjust labour force to the requirement of work. If the lay-off
or adjusbnent of labour-force happened to be in breach of contract of employment or
otherwise wrongful, the aggrieved workmen are entitled to compensation. This right of
management has been curtailed to a great extent by the modern labour legislation and
judicial decisions following thereunder. They assert that the right of the management
to lay-off its workmen and adjust labour force is not absolute. It has now been settled
that management has no right to lay-off its workmen. 10
2. Under the Standing Orders. Where the standing orders certified under the Industrial
Employment (Standing Orders) Act, 1946 provide for lay-off, the employers are allowed
to lay-off their workmen in accordance with the provisions of the standing orders of
their establishment. They have no right to lay-off for reasons other than those laid
down in the relevant clauses of the standing orders.
3. Under the Industrial Disputes Act, 1947. Chapter V-A and V-B recognize management's
right to declare lay-off for reasons laid down therein. If any case is not covered by
the provisions of the standing orders of the establishment, it will be regulated by the
provisions of Industrial Disputes Act, 1947.

the day and is given employment then, he shall be deemed to have been laid-off 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 allowances for that part of the day.
9 See, Kairbetta Estate v. Rajmanickam, (1960) 2 LLJ, 275: See also Workmen of Dewan Tea Management,
(1964) I LLJ 358 (SC); Illness of Assistant Managing Director is not a ground for lay-off. See
Management of Gauhati Press (P) Ltd v. Labour Court, (1983)Lab. IC 824.
10 Workmen of Dewan Tea Estate v. Their Management,(1964) I LLJ 358.
 Lay-off, Retrenchment, Transfer and Closure • 4 77

The Supreme Court in Workman of Dewan Tea Estatev. TheManagement 11 while considering
the management's right to lay-off observed:

[W]hether it can be said that Section 25 C recognizes a common law right of

the industrial employer to lay-off his workmen? This question must, in our
opinion, be answered in the negative. When the laying-off of the workmen is
referred to in Section 25 C, it is the laying-off as defined by Section 2 (kkk), and
so, workmen who can claim the benefit of Section 25 C must be workmen who
are laid-off for occasions contemplated by Section 2 (kkk).
The Court added:

If any case is not covered by the standing orders, it will necessarily be governed
by the provisions of the Act and lay-off would be permissible only where one
or the other of the factors mentioned by Section 2 (kkk) is present and for such
lay-off, compensation would be awarded under Section 25 C.
However, in Workmen v. Firestone Tyre and Rubber Co., 12 the Supreme Court explained
the aforesaid observation to indicate that:

[I]f the power of lay-off is there in the standing orders but the grounds of
lay-off are not covered by them, rather are governed by the provisions of the
Act, then lay-off would be fermissible only on one or the other of the factors
mentioned in Clause (iii) .... 1 Butthere is no provision in the Industrial Disputes
Act specifically providing that an employer would be entitled to lay-off his
workmen for the reasons prescribed by Section 2 (kkk). In case of compensation
of lay-off, position is quite different:

If the terms of contract of service or the statutory terms engrafted in the

standing orders do not give the power of lay-off to the employer, the employer
will be bound to pay compensation for the period of lay-off which ordinarily
and generally would be equal to the full wages of the concerned workmen. If,
however, the terms of employment confer a right of lay-off on the management,
then, in the case of an industrial establishment which is governed by Chapter
V-A, compensation will be payable in accordance with the provisions contained
therein. But no compensation will be payable in the case of an industrial
establishment to which the provisions of Chapter V-A do not apply and it will
be so as per the terms of employment.

E. Prohibition on Lay-off
Till 1976, there was no provision for preventing lay-off in the Industrial Disputes Act, 1947.
In the 1970s, a number of cases of large-scale lay-off were reported. This resulted in all-
round demoralizing effect on the workmen. In order to prevent avoidable hardship and to
maintain higher tempo of production and productivity, the Industrial Disputes Act, 1947

11 ibid.
12 Workmen v. Firestone Tyre and Rubber Co., (1976) 1 LLJ 493 (SC).
13 Id. at 499.
4 7 8 • Industrial Relations and Labour Laws

was amended in 1976 whereby restrictions were imposed on the employer's right to lay-off
by Section 25 M. However, following the decision of the Supreme Court in Excel Wear case,
some high courts14 declared invalid the provisions contained in Section 25 M. In order to
remove the anomaly, Section 25 M was re-drafted and substituted by the Industrial Disputes
(Amendment) Act, 1984 which came into force w .e.f. 18 August 1984. Section 25 M, applies
to every industrial establishment (not of seasonal character) in which not less than 100
workmen are employed on the average per working day for the preceding 12 months. 15
Thus, Section 25 M, which imposes prohibition on lay-off provides:
1. No workman (other than a badli workman or a casual workman) whose name is borne
on the muster rolls of an industrial establishment to which this Chapter applies,
shall be laid-off by his employer except with the prior permission of the appropriate
government or such authority as may be specified by that government by notification
in the official gazette (hereinafter in this section referred to as the specified authority).
obtained on an application made in this behalf, unless such lay-off is due to shortage
of power or to natural calamity, and in the case of a mine, such lay-off is due also to
fire, flood, excess of inflammable gas or explosion.
2. An application for permission under sub-section (1) shall be made by the employer in
the prescribed manner stating clearly the reasons for the intended lay-off and a copy
of such application shall also be served simultaneously on the workmen concerned
in the prescribed manner.
3. Where the workmen (other than badli workmen or casual workmen) of an industrial
establishment being a mine, have been laid-off under sub-section (1) for reasons of
fire, flood or excess of inflammable gas or explosion, the employer, in relation to such
establishment, shall, within a period of 30 days from the date of commencement of
such lay-off apply, in the prescribed manner, to the appropriate government or the
specified authority for permission to continue the lay-off.
4. Where an application for permission under sub-section (1) or sub-section (3) has
been made, the appropriate government or the specified authority, after making such
inquiry as it thinks fit and after giving a reasonable opportunity of being heard to the
employer, the workmen concerned and the persons interested in such lay-off, may,
having regard to the genuineness and adequacy of the reasons for such lay- off, the
interest of the workmen 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.
5. Where an application for permission under sub-section (1) or sub-section (3) has been
made and appropriate government or the specified authority does not communicate
the order granting or refusing to grant permission to the employer within a period
of 60 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 60
days.
6. An order of the appropriate government or the specified authority granting or refusing
to grant permission shall, subject to the provisions of sub-section (7), be final and

14 For instance, the Madras High Court in K Gurumurthy v. Simpson & Co.,(1981) 2 LLJ 360 held that
Section 25 M was ultra vires the Constitution.
15 Section 25 K.
 Lay-off, Retrenchment, Transfer and Closure • 4 79

binding on all the parties concerned and shall remain in force for one year from the
date of such order.
7. The appropriate government or the specified authority may, either on its own motion
or on the application made by the employer or any workman, review its order granting
or refusing to grant permission under sub-section (4) or refer the matter or, as the case
may be, cause it to be referred 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 a period of 30 days from the date of such reference.
8. Where no application for permission under sub-section (1) is made, or where no
application for permission under sub-section (3) is made within the period specified
therein, or where the permission for any lay-off has been refused, such lay-off shall
be deemed to be illegal from the date on which the workmen had been laid-off and
the workmen shall be entitled to all the benefits under any law for the time being in
force as if they had not been laid-off.
9. 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 accident in the establishment or death of the employer or the like, it
is necessary to do so, by order, direct that the provisions of sub-section (1), or, as the
case may be, sub-section (3) shall not apply in relation to such establishment for such
period as may be specified in the order.
10. The provisions of Section 25 C (other than the second proviso thereto) shall apply to
cases of lay-off referred to in this section.
Explanation. For the purposes of this Section, a workman shall not be deemed to be
laid-off by an employer if such employer offers any alternative employment (which in
the opinion of the employer, does not call for any special skill or previous experience
and can be done by the workmen) in the same establishment from which he has been
laid-off or in any other establishment belonging to the same employer, situated in the
same town or village, or situated within such distance from the establishment to which
he belongs that the transfer will not involve undue hardship to the workman having
regard to the facts and circumstances of his case, provided that the wages which would
normally have been paid to the workman are offered for the alternative appoinbnent
also.

F. Penalty for Lay-off without Previous Permission

Section 25 Q prescribes penalty upon the employer contravening the provisions of Section
25 M. Thus, the employer who contravenes the provisions of Section 25 M is punishable
with imprisonment for a term which may extend to one month or with fine which may
extend to fl,000 or with both.

G. Procedure for Lay-off

The Industrial Disputes Act, 1947, does not provide for the procedure to be adopted before
declaring a lay-off. The procedure is, however, provided in the Industrial Disputes (Central
Rules) 1957. Rule 75 A makes it obligatory upon the employer of an industrial establishment
as defined in the Explanation to Section 25 A to give notice of the period of lay-off in the
forms 0-1 and 0-2 within 7 days of the commencement or termination of such lay-off as
480 • Industrial Relations and Labour Laws

the case may be to the affected workmen, This notice should be given by the employer to
the affected workmen irrespective of the fact whether they are or are not entitled to any
compensation under Section 25-C of the Act.

H. Compensation for the Period of Lay-off

1. Under the Standing Orders. Most standing orders contain a clause providing for lay-
off. It also generally provides for the manner in which lay-off compensation should
be paid. Where the relevant clauses of the standing orders provide for lay-off and
the compensation therefor, the question of compensation will be determined by such
standing orders. But in case of conflict between the provisions of standing orders and
the statutory provisions for lay-off compensation, the latter will override the former.
If the standing orders of the establishment merely provide for the reasons for which
lay-off may be declared by the employer and do not provide the manner in which the
compensation shall be paid to the laid-off workmen, the compensation shall be paid
to them in accordance with Section 25-C provided, of course, the lay-off is covered
under Section 2 (kkk).
2. Under Section 25 C of the Industrial Disputes Act. To ensure a minimum earning
during forced unemployment when workmen's names are borne on muster rolls,
the Industrial Disputes Act, 1947 provides for payment of compensation equal to 50
per cent of the total of the basic wage and dearness allowance, for all days during
which he is laid-off; provided he has completed continuous service of one year or
more. However, under proviso to Section 25-C (1) if during any period of 12 months,
a workman is laid-off for more than 55 days, no compensation shall be payable to a
workman in respect of any period of lay-off after the expiry of 45 days if there is an
agreement to that effect between the workman and the employer. Alternatively, the
employer may retrench the workmen at any time after the expiry of 45 days. If the
workmen is retrenched under such circumstances, compensation paid to him for having
been laid-off during the proceeding 12 months may be set-off against compensation
payable for retrenchment.

Nature and Scope of Agreement under Section 25-C(1)

In P Virudhachalam v. Management of Lotus Ltd16, the Supreme Court was invited to consider
whether there was an agreement between workman and employer to the effect that the
period of lay-off would be curtailed or restricted to 45 days only. It was contended on behalf
of the workman that in order to attract the first proviso to Section 25-C(l), there should be
an independent agreement between the workman and the employer to that effect agreeing
not to demand lay-off compensation beyond 45 days of the starting of the lay-off period.
Rejecting the contention, the Supreme Court observed:

It is difficult to appreciate this contention. An agreement restricting the claim

of lay-off compensation beyond the available period of 45 days can be said to
be arrived at between the workman on the one hand and the employer on the
other as there is such an agreement embedded in a binding settlement which

16 1998 Lab. IC 834 (SC).

 Lay-off, Retrenchment, Transfer and Closure • 481

has a legal effect of binding all the workmen in the institution as per Section
18 (3) of the Act.
The effect of such settlement arrived at during the conciliation proceedings would
get telescoped into the first proviso to Section 25-C(l) and bind all workmen even though
individually, they might not have signed the agreement with the management or their union
on behalf of its member workmen. The first proviso to Section 25-C(l) clearly lays down
that if there is an agreement for not paying any more lay-off compensation beyond 45 days
between the workmen and the employer, such an agreement has binding effect both on
the employer and the workman concerned. Such binding force gets clearly attracted in the
case of the appellants by virtue of operation of Section 12(3) read with Section I 8 of the Act
emanating from the settlement arrived at during the conciliation proceedings as aforesaid.
The Court also rejected the contention of workmen for isolating the effect of Section
1S(3) and observed:

It is difficult to appreciate how the said proviso can be of any assistance to the
appellants. All that is stated is that anything inconsistent with the provisions
of Chapter VA found to have been laid down by any other law including
standing orders, etc., will have no effect. Even sub-section (2) of Section 25-J
overrides any inconsistent provision of any other law or otherwise binding
rule of conduct and makes the provisions of Chapter VA operative on their
own. The submission of learned counsel for the appellants in this connection
was to the effect that 'any other law' as provided in Section 25-J(l) would
include even the Industrial Disputes Act, specially the provisions contained
in Section 18 thereof. It is difficult to agree that Section 25-J nowhere provides
that the provisions of Chapter VA shall have effect notwithstanding anything
inconsistent contained in any other chapter of the Industrial Disputes Act as
well as in any other law. Such a provision is conspicuously absent in Section
25-J(l). If submission of learned counsel for the appellants is accepted, Section
25-J(l) will have to be rewritten by introducing the additional words therein
'in any other part of this Act or' before the words 'any other law' as mentioned
therein. On the express language of the said provision, therefore, such an
exercise is contra-indicated and is totally impermissible.

I. Applicability of Section 25 C to 25 E
Scope and Coverage. Section 25 C to 25 E shall not af ply to (i) an 'industrial establishment'
which means any 'factory'17 'mine 18 'plantation'1 emrcloying less than 50 persons on
average per working day in preceding calendar months 0, or to industrial establishments
which are of seasonal character or in which work is performed only intermittently; or to
industrial establishments to which Chapter V-B applies. From this it is clear that scope
of Section 25 A to 25 E is limited. It, therefore, raises a significant question whether it is
open to the industrial tribunal to award lay-off compensation to workmen employed in an

17 See Section 2 (m) of the Factories Act 1948.

18 See Section 2 (7) of the Mines Act, 1952.
19 See Section if> of the Plantation Labour Act, 1951.
20 Section 25 A
482 • Industrial Relations and Labour Laws

'industrial establishment' to which Section 25 C is not applicable. The question, however,

has been answered in the negative, by the Bombay High Court in KT Rolling Mills Ltd v.
MR Mehar 21 and by Kerala High Court in South India Corporation v. All Kerala Cashewnut
Factory Workers' Federation. 22 In the former case, less than 50 workmen were employed in an
industrial establishment on an average per working day. The management laid-off certain
workmen without paying them any compensation. On failure of conciliation proceeding,
the dispute was referred to the industrial tribunal for adjudication. The tribunal awarded
compensation on the ground of equity and social justice. The management thereupon
moved the High Court under Article 226 of the Constitution for appropriate relief. Justice
K T Desai, who heard the writ petition for the High Court confirmed the findings of the
tribunal. The management then appealed to the division bench of the High Court. While
Justice JC Shah agreed with the findings of Justice KT Desai, Justice ST Desai took contrary
view by holding that it was not open to a workman to claim lay-off compensation. Upon
this difference, the case was referred to Justice Mudholkar for final disposal, who held that
a tribunal had no jurisdiction to award lay-off compensation to the concerned workmen.
It is submitted that the coverage of the Industrial Disputes Act, 1947, in regard to lay-
off compensation is not in conformity with other labour legislation such as the Payment of
Bonus Act, 1965, Employees' Provident Funds and Miscellaneous Provisions Act, 1952, and
the Employes's State Insurance Act, 1948. The latter Acts are applicable to establishments
employing 20 or more persons.
The provisions relating to lay-off, retrenchment, transfer and closure compensation
should be extended not only to 'industry' employing 20 or more persons but to every
'industry', irrespective of the number of workmen employed therein. This should however,
be done in two stages. In the first stage, the coverage of provisions relating to lay-off
compensation should be extended to workmen employed in any factory (under the Factories
Act, 1948), mines (under the Mines Act, 1952), plantations (under the Plantation Labour
Act, 1951) and other industries (under the Industrial Disputes Act,1947) employing 20 or
more persons and in the second stage to others.23

J. Workmen Not Entitled to Compensation in Certain Cases

(i) If the workmen refuse to accept any alternative employment. Another limitation on the scope
of statutory requirement of lay-off compensation is that a laid-off workman shall not
be entitled to statutory lay-off compensation if he refuses to accept any alternative
employment in the same establishment from which he has been laid-off, or in any other
establishment belonging to the same employer situated in the same town or village or
situated within a radius of 5 miles from the establishment to which he belongs. Whether
or not laid-off workmen are entitled to compensation depends on the meaning of the
expression'any alternative employment'. In a broad sense, it may be used as a synonym
of 'any'. According to this, the employer is free to offer 'any employment' (including
a lower post) to laid-off workers without loss of wages provided in the opinion of the
employer the post does not require any special skill or previous experience and can be
done by workmen. In the literal sense it means employment of equal status. The latter

21 K T Rolling Mills Ltd v. M R Mehar, (1962)2LLI 667 (Born.).

22 South India Corporation v. All Kerala Cashewnut Factory Workers' Federation, (1960) 2 LLJ 103 (Kerala).
23 For details, see Suresh C Srivaslava, Lay-off and Labour Law, (1969) 2 LLJ (Journal Section iii).
 Lay-off, Retrenchment, Transfer and Closure • 483

view has been taken in Industrial Employees' Union v. J K Cotton Spinning and Weaving
Mills Co. 24 Construing the expression 'alternative employment,' the labour appellate
tribunal held that it means 'like, similar or substitute of original job.' This view is in
conformity with fair play and justice.
(ii) Another part of the establishment. The expression 'another part of the establishment'
occurring in clause (iii) is, however, not free from ambiguity. The real difficulty arises
when one attempts to delineate the aforesaid expression in order to decide whether
a laid-off workman is entitled to compensation. Reported decisions, however, reveal
that even in the identical facts-situation, the Supreme Court has held differently. For
instance, in Associated Cement Companies Ltd v. Their Workmen, 25 the Associated Cement
Factory and a lime-stone quarry had a common manager and a common accountant
and other features of functional integrity. A lay-off was declared in Associated Cement
factory due to strike by the workmen of lime-stone quarry. On these fact-situation,
the lime-stone quarry was held to be 'another part of the establishment' under Section
25 E (iii) so as to disentitle the workmen in the factory to claim lay-off compensation.
Observed the Supreme Court:

The Act not having prescribed any specific tests for detennining what is 'one
establishment', we must fall back on such considerations as in the ordinary
industrial or business sense determine the unity of an industrial establishment,
having regard no doubt to the scheme and object of the Act and other relevant
provisions of the Mines Act, 1952, or the Factories Act, 1948. What then is 'one
establishment' in the ordinary industrial or business sense? The question of unity
or oneness presents difficulties when the industrial establishment consists of parts,
units, deparbnents, branches, etc. If it is strictly unitary in the sense of having
one location and one unit only, there is little difficulty in saying that it is one
establishment. Where, however the industrial undertaking has parts, branches,
deparbnents units, etc., with different locations, near or distant, the question arises
what test should be applied for determining what constitutes one establishment.
The Court then observed that the relations between various units depend on the
facts proved having regard to the scheme and object of the statute. But in Alloy Steel Project
Company v. Their Workmen 26 under similar situation and circumstances, the Court declared
them two different establishments. This anomaly was due to the absence of an explanation
clause clarifying the meaning of the expression'another part of the establishment'. Further,
there is not a single criterion by which itself and standing alone, either establishes or
negatives the determination of question as to what constitutes an establishment. The issue
is to be decided on a number of considerations such as (z) unity of ownership, (ii) contract
and supervision by same employer, (iii) finance, (iv) management and employment, (v)
geographical proximity and (vi) general uni~ of purpose and functional integrity with
particular reference to the industrial process.2
(iii) Badli or casual workmen. A badli or a casual workmen is not entitled to lay-off
compensation. 'Badli workman' means: a workmen who is employed in an industrial

24 Industrial Employees Union, Kanpur v. JK Spinning and Weaving Mills Co., (1956) 1 LLJ 327 (LAT).
25 Associated Cement Companies Ltd v, Their Workmen, (1960) I LLJ 7 (SC).
26 Alloy Steel Project Company v. Their Workmen, (1971) 1 LLJ (SC).
27 Suresh C Srivastava, Lay-off and Labour Law, (1969)2 LLJ (Journal section) (iii).
484 • Industrial Relations and Labour Laws

establishment in the place of another workman whose name is borne on the muster
rolls of the establishment, but shall cease to be regarded as such for the purposes of
this Section, if he has completed one year of continuous service in the establishment.
The Act does not, however, define the term 'casual workman'. The absence of any
such definition raises several problems: (1) Whether a workman can be said to be a 'casual
workman' (a) when he has completed one year of service, or when he has not completed
one year of service? (2) Is a 'casual workman' entitled to lay-off compensation in case he is
employed in an establishment employing 50 or more workmen? (3) Can the employer avoid
taking a casual workman on the muster roll who has completed one year of service? It is
not easy to answer these questions. Had the Parliament defined the term 'casual workman'
like badli workman, the problem would not have arisen. Under the circumstances, it is
suggested that the Parliament may amend the Industrial Disputes Act,1947 and define the
term 'casual' workmen.
(iv) Ifhe does not present himselffor work. Clause (iz) of Section 25E28 provides that a workman
would not be entitled to any compensation if he refuses to present himself for work
as mentioned in clause (iz). This clause raises a significant question as to what is the
effect of absence from work after the lay-off has been declared? This question was
answered in Nutan Mills v. Employees' State Insurance Corporation. 29

During the period of the lay-off, the employee would be entitled to go and
serve another master. The only result of his doing so would be that he would
be disentitled to receive compensation. But it is entirely a matter of his option
whether he should present himself at the office of his employer and thus claim
compensation or earn wages under a different employer and even though he
may serve a different employer, he would still have the right to be reinstated
when the proper occasion arises. 30
(v) If the laying-off is due to a strike or go-slow on the part of workmen in another part of
establishment. Section 25 E (iii) provides that the workman would not be entitled to
lay-off compensation if the lay-off was declared due to strike or go-slow on the part
of workmen, in another part of the establishment.

K. Continuous Service
Section 25 C of the Act requires that two conditions must be complied with. First, the
workmen must have been in 'continuous service' of the employer. Second, such service
should not be for less than one year. Section 25 B defines 'continuous service', inter alia, for
the claim of lay-off compensation. The definition of 'continuous service' consists of two
parts. The first part deals with the meaning of expression'continuous service' and the second
part is inclusive of definition. In the first part, in order that the service may be continuous,
it must be uninterrupted. The second part says that notwithstanding any interruption in
the continuity of service, it will be uninterrupted on account of sickness, or on account of

28 Clause (ii) of Section 25 E of the Industrial Disputes Act, 1947 provides that a workman shall not
be entitled to any compensation 'if he does not present himself for work at the establishment at the
appointed time during normal working hours at least once a day.'
29 Nutan Mills v. Employees' State Insurance Corporation, (1956) I LLJ 215 (Bombay).
30 Id. at 219.
 Lay-off, Retrenchment, Transfer and Closure • 485

authorized leave or accident or strike which is not illegal or lockout or a cessation of work
which is not due to any fault of workmen. Section 25 B (2) provides a legal fraction by view
of which a workmen not in continuous service shall be deemed to be in continuous service
provided the conditions laid down in the Section are complied with. In Explanation (i)
appended to sub-section (2) of Section 25 B the words used are:

he has been laid-off under an agreement or as permitted by standing orders

made under the Industrial Employment (Standing Orders) Act, 1946, or under
this Act or under any other law applicable to the industrial establishment.
The aforesaid provisions indicate that a workman can be laid-off under the Industrial
Disputes Act. But it is strange to find that no section in Chapter V-A in express language or
by necessary implication confers any such power upon the management of the industrial
establishment to which the relevant provisions are applicable to lay-off a workman.

L. Employer's Duty to Maintain Muster-Rolls of Workmen

Section 25 D31 casts an obligation upon an employer of an industrial establishment32 to
maintain a muster-roll and to provide for the making of entries therein by workmen who
may present themselves for work.
This provision is equally applicable to industrial establishments employing 100 or
more workmen.

M. Recovery of Lay-off Compensation

Section33 C (1), inter alia, provides for the mode of recovery of lay-off compensation namely:

Where any money is due to a workman from an employer, under a settlement

or an award or under the provisions of Chapter V-A or Chapter V-B, the
workman himself or any other person authorized by him in writing in this
behalf, or, in the case of the death of the workman, his assignee or heirs may,
without prejudice to any other mode of recovery, make an application to the
appropriate government for the recovery of the money due to him, and if the
appropriate government is satisfied that any money is so due, it shall issue a
certificate for that amount to the collector who shall proceed to recover the same
in the same manner as an arrear of land revenue .... have raised several issues.
The key question is what is the significance of the expression, 'money due' to workman
from an employer under the provisions of Chapter V-A. In Kays Construction Company v.
State of Uttar Pradesh 33 the Supreme Court observed:

31 Section 25 D of the Act provides:

'Notwithstanding that workmen in any industrial establishment have been laid-off, it shall be
the duty of every employer to maintain for the purposes of this Chapter a muster-roll, and to
provide for the making of entries therein by workmen who may present themselves for work at
the establishment at the appointed time during normal working hours.'
32 KT Rolling Mills v. Mehar, (1962) 2LLJ 667 (Bombay).
33 Kays Construction Company v. State of Uttar Pradesh, (1965) 2 LLJ 429 (SC).
486 • Industrial Relations and Labour Laws

[T]he benefit contemplated in sub-section (2) is not 'money due' but some
advantage or perquisite which can be reckoned in terms of money .... For
instance, loss of the benefit of free quarters is not loss of 'money due' though
such loss can be reckoned in terms of money by inquiry and equation. The
contrast between 'money due' on the one hand and a 'benefit' which is not
'money due' but which can become so after the money equivalent is determined
on the other, marks out the areas of operation of the two sub-sections. If the
word 'benefit' was taken to cover a case of mere arithmetical calculation of
wages, sub-section (1) would hardly have any play. Every case of calculation,
however simple, would have to go first before a tribunal. In our judgement,
a case such as the present, where money due is back wages for the period of
unemployment is covered by the first sub-section and not the second. 34

N. Lay-off and Section 33

Lay-off affects the earnings of the concerned industrial employees35 and therefore, apparently
violates the provisions of clause (a) of sub-section (t), (2) and (3) of Section 33. 36
The tribunals and courts have, however, held that laying-off of workmen in accordance
with the establishment practice37 or provisions of standing orders or statutory provisions
are outside the purview of Section 33.

34 ld. at 432.
35 Lay-off of workmen in accordance with the prevailing practice and on the same terms and conditions
cannot amount to a change in the conditions of service [see Sathe Biscuit Chocolate Company Ltd,
(1958) 2 LLJ 70.] This issue was left open by the Supreme Court in Modi Food Products and Co. Ltd
v. Faquir Chand Sharma, (1956) 1 LLJ 749.
36 See Aruna Mills Company Ltd v. Textile Labour Association, (1951) lLLJ 647 and Sri Dattaram Shankar
v. Indian Smelting and Refining Company Ltd, (1953) 2LLJ 577.
37 This line of thinking was followed by the Supreme Court in Modi Food Products and Co. Ltd v. Faquir
Chand Sharma, (1956) I LLJ, 749 wherein Justice Ayyar observed:
'It is common ground that there are no statutory rules prescribing the conditions under which there
could be a lay-off. If there had been, they would operate as conditions of service between the parties,
and then the question would simply have been whether there had been a compliance with them.
Under the provisions of the Industrial Employment (Standing Orders) Act, 1946, certain standing
orders had been framed. With reference to this matter, counsel on both sides state that after the
enactment of the Industrial Disputes (Amendment) Act (XLIH of 1953) they are no longer in force
and that there are no statutory provisions applicable to the present dispute. We must, therefore,
decide the question on the footing that the only condition which the parties might be taken to have
agreed to is that the lay-off should be for adequate grounds and for a reasonable period. On this
question, there is a clear finding in favour of appellant. The tribunal has found that groundnut and
neem seeds were not available at parity prices, and for that reason, the work had to be stopped.
It is not likely that businessmen would cut their profits to spite the workmen. The period of the
lay-off was expressed to be until the next groundnut season, and we have been told that the season
for groundnut begins sometimes in November-December. In fact, all the respondents have been
re-employed in relays from September onwards, and by the first week of December, all of them
had been absorbed. On the finding of the tribunal that the lay-off was justified, it follows that the
application of the respondents under Section 23 of the Act was liable to be dismissed on the ground
that there had been no contravention of Section 22 (a).
 Lay-off, Retrenchment, Transfer and Closure • 487

0. Effect of Laws Inconsistent with Chapter V

Section 25-J reads:
(1) The provisions of this Chapter shall have effect notwithstanding anything inconsistent
therewith contained in any other law including standing orders made under the
Industrial Employment (Standing Orders) Act. 1946:
Provided that where under the provisions of any other Act or rules, orders or notifications
issued thereunder or under any standing orders or any award, contract of service or
otherwise, a workman is entitled to benefits in respect of any matter which are more
favourable to him than those to which he would be entitled under this Act; the workman
shall continue to be entitled to the more favourable benefits in respect of that matter,
notwithstanding that he receives benefits in respect of other matter under this Act.
(2) For the removal of doubts, it is hereby declared that nothing contained in this Chapter
shall be deemed to affect the provisions of any other law for the time being in force in
any state in so far as that law provides for the settlement of industrial disputes, but the
rights and liabilities of employers and workmen in so far as they relate to lay-off and
retrenchment shall be determined in accordance with the provisions of this Chapter.
The effect of the aforesaid provisions is that for the period of lay-off in an industrial
establishment to which the said provisions apply, compensation will have to be paid in
accordance with Section 25C. But if a workman is entitled to benefits which are more
favourable to him than those provided in the Act, he shall continue to be entitled to the
more favourable benefits. The rights and liabilities of employers and workmen in so far as
they relate to lay-off and retrenchment, except as provided in Section 25-J, have got to be
determined in accordance with the provisions of Chapter V-A. The aforesaid provision is
equally applicable to industrial establishments to which Chapter V-B applies.
Sub-section of (2) of Section 25 J is quite emphatic about the supremacy of the provisions
relating to the rights and liabilities arising out of lay-off and retrenchment. These are special
provisions and they do not apply to all kinds of termination of services38 • By enacting Section
25-J, Parliament perhaps intended that the rights and liabilities arising out of lay-off and
retrenchment should be uniform throughout India where the Central Act was in force and
did not wish that states should have their own laws consistent with the Central law. If really
the state legislature intended that it should have law of its own regarding the rights and
liabilities arising out of retrenchment, it would have expressly provided for it. Legislature
has not done so in this case. 39

A. The Context
With the cessation of World War II and re-establishment of normal transport facilities,
new and improved machinery began to flow into the country. These in turn resulted in
rationalization of production processes and retrenchment of surplus labour. The situation
was, however, met by the State's interference in regulating the employers' right to
retrench their workmen directly through the Ministry of Labour and indirectly through

38 Krishna Distt. Marketing Society Ltd v. NV Purnachandra Rao, (1987) Lab. IC 1651.
39 ld. at 1658.
488 • Industrial Relations and Labour Laws

the industrial tribunals. This situation continued till 1953. In 1953, a grave situation arose
in textile mills resulting in retrenchment of a large number of workers employed therein.
This led to the promulgation of the Industrial Disputes (Amendment) Ordinance No. 5 of
1953. Subsequently, these measures with a number of innovations and refinements were
incorporated in the Industrial Disputes (Amendment) (Act 42 of 1953).
Though the 1953-Amendment Act provided for notice and retrenchment compensation,
it did not contain any provision for preventing retrenchment. Cases of large-scale
retrenchment were reported time and again. Consequently, the state government and
national apex bodies approached the Central Government to take legislative measures for
preventing arbitrary action of the management in retrenching its workmen. Accordingly,
the Industrial Disputes (Amendment) Act, 1976 was enacted.
By this amendment, a new Chapter V-B has been added to the Industrial Disputes
Act, 1947 and this Chapter applies to industrial establishments which are factories, mines
and plantations, employing 300 or more workmen. For purposes of these new provisions,
the central sphere has been widened and the Central Government would also be the
appropriate government in respect of (i) companies in which not less than 51 per cent
of the paid-up share capital is held by the Central Government and, (ii) corporations
established by or under any law made by Parliament, despite the fact that insofar as other
provisions of the Industrial Disputes Act are concerned, some of these establishments are
in the state sphere. This legislation makes it obligatory for the employers of these industrial
establishments to obtain previous permission of the specified authority before retrenching
any workmen. The specified authority has to give his decision within a period of 2 months
and the previous approval for closure within 90 days of the date of intended closure.
The Act also provides for certain transitional provisions in respect of continuing lay-off,
retrenchments and closures where the period of notices already sent have not expired and
also in respect of retrenchment. Now, decision will have to be communicated within 2
months. A new provision has also been made in the Act for restarting of an already closed
down undertaking under certain special circumstances. The penal provisions in the Act
for violation of any of these new provisions are much more stringent than those already
existing in the Act. The maximum penalties provided are imprisonment for a term which
may extend to one year or fine which may extend to f5,000 or with both. For continuing
offences, the fine for each day of contravention after conviction is f2,000. 40
However, the Industrial Disputes (Amendment) Act, 1982 extended the aforesaid
special provisions of retrenchment to industrial establishments employing 100 workmen.
Two years later, the Industrial Disputes (Amendment) Act, 1984 curtailed the scope of
retrenchment by inserting a new clause (bb) in Section 2 (oo). Further, the proviso to clause (a)
of Section 25-F was omitted. Moreover, Section 25-N dealing with the conditions-precedent
to retrenchment of workmen was substituted and Section 25 Q dealing with penalties for
retrenchment was amended.

B. Nature of Retrenchment
1. General. Retrenchment generally means 'discharge of surplus labour or staff' by
the employer on account of a long period of lay-off or rationalization or production

40 See 'Statement of Objects and Reasons', Gazette oflndia, dated January 28, 1976 Part II. Section 2.
Ext. 491.
 Lay-off, Retrenchment, Transfer and Closure • 489

processes or improved machinery or automation of machines or similar other reasons.

It is adopted as an economy measure. The subsisting employer-workmen relationship
is, however, terminated in case of retrenchment.
2. Retrenchment and Lockout. Retrenchment and lockout have some common phenomena
of continuing business. Both are acts of the employer. Both involve subsisting
employer-workmen relationship. But, there are weighty reasons to distinguish lockout
from retrenchment on the basis of the status of employment relationship. Whereas
there is a subsisting employer-workman relationship in lockout, that relationship is
terminated in case of retrenchment. There is yet another basis of distinction; lockout
is an instrument of economic coercion and seeks to compel recalcitrant workmen
to agree to the management's point of view, retrenchment is a measure of economy
and, while it does affect workmen, the motive of bringing workmen to their knees by
putting economic pressure on them is absent.
3. Retrenchment and Lay-off. Retrenchment and lay-off have some elements in common.
Both are declared by the employer. Both require statutory compensation but they differ
in many other respects. Whereas there is a subsisting employer-workmen relationship
during lay-off, that relationship is terminated in case of retrenchment. There is yet
another basis of distinction. While retrenchment is a permanent measure to remove
surplus labour, lay-off is a temporary measure.
4. Retrenchment and Closure of Business. Retrenchment and closure of business have
some common features. Both are measures of economy by the employer; both require
statutory compensation. In both cases, employer-workmen relationship is terminated.
But they differ in many other respects. In closure the industry is closed but in case of
retrenchment, the industry may be continuing.

C. Statutory Definition of Retrenchment

Prior to 1953, the word 'rettenchment' was not defined in any legislative enacbnent in India.
Section 2 (oo) of the Industrial Disputes Act, 1947, defines 'retrenchment' to mean:
the termination by the employer of the service of a workman for any reason whatsoever,
otherwise than as a punishment inflicted by way of disciplinary action, but does not include-
(a) voluntary retirement of the workman: or
(b) retirement of the workman on reaching the age of superannuation if the contract of
employment between the employer and the workman concerned contains a stipulation
in that behalf; or
(bb) termination of the service of the workman as a result of non-renewal of 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;
or
(c) termination of the service of a workman on ground of continued ill-health.
The above definition may conveniently be divided into four parts, namely; (a)
termination of the service of a workmen, (b) by the employer; (c) for any reason whatsoever,
and (d) otherwise than as a punishment inflicted by way of disciplinary action. The definition,
however, excludes, a workman who had (z) been dismissed as a measure of punishment
inflicted by way of disciplinary action, or (ii) voluntarily retired, or (iiz)retired on reaching
the age of superannuation or (iv) been discharged on the ground of continued ill-health.
490 • Industrial Relations and Labour Laws

The definition of retrenchment is very badly drafted for there are inherent
contradictions in the definition. If retrenchment means the termination of service by the
employer, then what about voluntary retirement of workman which is certainly not a
termination of service of workmen by the employer? Similarly, the retirement on reaching
the age of superannuation is also not a termination of service of the workman by the
employer unless it is considered to be a formal act of the employer to remove the name of
the workman from the muster-roll. Here, one fails to understand the purpose of exclusory
clause for the aforesaid items.
Notwithstanding the contradiction in the definition, it is interesting to note that
the legislature intended to interpret the definition in its widest fiossible amplitude.
But the Supreme Court in Barsi Light Railway Co. v. Joglekar (KN) 1 while considering
the meaning and scope of the definition of 'retrenchment' occurring in Section 2 (oo)
of the Industrial Disputes Act, 1947 interpreted the words 'for any reason whatsoever'
to mean 'for any reason which is connected with economy whatever the reasons might
be'. In this case, under an agreement dated 1 August 1895 between the secretary of the
state for India and Railway Company, the President of India gave notice to the Railway
Co. on 19 December 1952 that the undertaking of the Railway Company would be taken
over with effect from 1 January 1954. Consequently, the Railway Company served a
notice to its workmen that in view of the aforesaid circumstances, the services of all the
workmen of the Railway Company would be terminated with effect from the afternoon
of 31 December 1953. It was also stated therein that the Government of India intended to
employ those staff of the company who would be willing to serve the railways on terms
and conditions fixed by the government. Majority of the staff of the Railway Company
were re-employed on the same scales of pay. However, 23 per cent of the staff were re-
employed on somewhat lower scales though the pay which they actually drew at the
time of re-employment was not affected. Only about 24 of the former employees of the
Railway Company were not taken back by the government. Soon after, Railwaymen's
Union filed 61 applications under the Payment of the Wages Act, 1936 to the Payment
of Wages Authority for payment of retrenchment compensation under Section 25 F. On
these facts, three questions arose: (i) whether the authority under the Payment of Wages
Act, 1936 had jurisdiction to adjudicate upon the claim of retrenchment compensation?
(ii) whether the erstwhile workmen were entitled to claim compensation under Section 25
F (b)? (iii) whether they had been 'retrenched' by their former employer? The authority
held that it had no jurisdiction to deal with the application but held that the workers
were entitled to compensation as there had been retrenchment. Aggrieved by this order,
the Railwaymen's Union moved the Bombay High Court for a writ under the provisions
of Articles 226 and 227 of the Constitution for quashing the order of dismissal passed by
the authority and directing the latter to dispose of the application on merits. Chief Justice
Chagla and Justice Dixit of the Bombay High Court held that the workmen had been
retrenched and the Railway Company was liable to pay compensation to them. Against
this judgement, the appeal was filed before the Supreme Court.
Another case, Hariprasad Shivshankar Shukla v. AD Divalkar (Dinesh Mills) 42 was also
heard by the Supreme Court along with Barsi Light Railway. Co. The management of Shri
Dinesh Mills had decided to close down the shifts. Thereafter, the management gave

41 Barsi Light Railway Company v. Joglekar (KN), 1957 SCR 121.

42 Hari Prasad Shivshankar Shukla v. Divalkar (AD), AIR 1957 SC 121.
 Lay-off, Retrenchment, Transfer and Closure • 49 1

notice to the workmen intimating that the second shift would be closed with effect from
20 December 1953 and the first shift with effect from 8 January 1954 and also mentioned in
the notice that as a result of the closure, the services of all workmen shall stand terminated.
The mill was closed and therefore, its workmen made an application to the authority under
the Payment of Wages Act, claiming retrenchment compensation under Section 25 F (b) of
the Industrial Disputes Act, 1947. It held that the discharge of workmen on closure did not
constitute retrenchment as defined in Section 2 (oo) of the Industrial Disputes Act, 1947.
Thereupon the workmen moved the Bombay High Court for issuance of appropriate writ.
Justice Babedkar and Justice Shah of the Bombay High Court relying on the decision in Barsi
Light Railway Co. 43 held that discharge of workmen on closure of business was retrenchment.
Aggrieved by this order, the management preferred an appeal to the Supreme Court. The
Supreme Court disposed of the two appeals together by a single order. The Supreme Court
reversed the findings of the Bombay High Court and pointed out that the statutory definition
of the word 'retrenchment' merely laid emphasis upon economic concept of the terms and
'for any reason whatsoever' meant 'for any economic reasons whatsoever in a continuing
or existing running industry.' Justice SK Das of the Supreme Court observed:

..... retrenchment as defined in Section 2 (oo) and used in Section 25-F has no
wider meaning than the ordinarily accepted connotation of the word: it means
the discharge ofsurplus labour or staffby the employer for any reason whatsoever,
otherwise than as a punishment inflicted by way of disciplinary action, and it
has no application where the services of all workmen have been terminated
by the employer.44
The Court also referred to its earlier observation in Pipraich Sugar Mills Ltd v. Pipraich
Sugar Mills Mazdoor Union 45 which reads as follows:

43 Barsi Light Railway Company v. Joglakar (KN) op. cit.

44 Id. at 41.
45 Pipraich Sugar Mills v. Pipraich Sugar Mills Mazdoor Union, AIR (1957) SC 95. The facts were as
follows: The sugar mills situated in Pipraich in Gorakhpur District which suffered a heavy loss due
to short supply of sugarcane and whose production and supply was controlled by the government,
after obtaining the permission of the government, decided to sell the mill to a Madras firm in
October 1950. It was agreed upon between the vendor and the vendee that the machinery had to
be dismantled and transported to Madras by the seller. When the workers came to know about
this transaction, they made unsuccessful attempts to persuade the government to withdraw the
permission to sell the mills. Thereafter they decided to go ons trike from 12 January 1951. In the course
of negotiation, the employer agreed to pay 25 per cent of the profits from the sale to the workers
provided they did not go on strike and helped the management in dismantling and transporting
the machinery. Upon this agreement the strike was called off. On the day the machinery was to be
dismantled for transportation to Madras to be re-erected there, the management asked the workers
to help. The workers on being asked by the management, however, refused to do so. Thereupon on
28 February 1951, the management gave a notice to the workers to the effect that those who would
not cooperate in dismantling the machinery will be discharged with effect from 1 March 1951 and the
workers will be paid upto 14 March, 1951. In view of the inability of the seller to take up the contract,
the purchaser entered into direct negotiation with the workmen and concluded an agreement with
them for dismantling the machinery. On 14 March 1951 the employers gave notice to the workers
that the machinery had to be transferred to the vendees on 15 March 1951 and workers will be paid
upto 16 March 1951 and this later date was extended upto 21 March, on the request of the workers
(Contd ... )
492 • Industrial Relations and Labour Laws

Retrenchment connotes in its ordinary acceptation that the business itself is

being continued but that a portion of the staff or the labour force is discharged as
surplusage and the termination of services of all workmen as a result of closure
of the business cannot therefore be properly described as retrenchment. 46
The Court also held that termination of service as a result of transfer of ownership of
an undertaking to another employer did not constitute 'retrenchment'.
It is difficult to accept this interpretation. If the expression 'for any reason whatsoever'
means what their Lordships have held it to mean, one wonders what was the need of the
qualifying clause, 'otherwise than as a punishment inflicted by way of disciplinary action.'
It is regrettable that Justice Das did not consider sub-clauses (a), (b), (c) on the ground that
they were not directly applicable to the cases under consideration. But one cannot overlook
the intention of the legislature in including all the categories mentioned in the earlier part
of the definition. However, by narrowing the scope, the Supreme Court severely curtailed
the meaning of the statutory definition of retrenchment and, correspondingly, increased
the residuary area of discharge wherein, save in establishments having a gratuity scheme,
workmen were not entitled to any severance pay and further rendered 63 words out of a
total of 81 words used in the definition 'useless appendage'. Further, the Court misread the
intention of the legislature in enacting Section 25 F of the Industrial Disputes (Amendment)
Act, 1953, and on the whole threw the provisions of the Industrial Disputes Act, 1947, out of
gears. Thus, the decision caused considerable hardship to workmen by denying statutory
compensation to workmen whose services were terminated on account of closure and
transfer of undertaking.
It is unfortunate that the impact of the aforesaid decision and curtailment of the
meaning of statutory definition of 'retrenchment' did not attract the attention of Supreme
Court for about 2 decades. It is only after about a decade when the Industrial Disputes
Act, 1947 has undergone several amendments that the impact of the aforesaid decision
appears to have been felt by the Supreme Court in State Bank of India v. N Sundara Money. 47
The facts of the instant case were as follows: the respondent was appointed as cashier, off
and on, by the State Bank of India between 4 July 1970 and 18 November 1972. There were
intermittent breaks in the service of the respondent but he had completed 240 days in a year
within the fold of 'deemed' continuous service occurring in Section 25-B(2). But the order
of appoinbnent which bore the termination of service of workman after a few days was

on which date they were discharged. On 19 April 1951, the workers claimed the bonus of 25 per cent
under January agreement, but this claim was rejected by the employers. On 16 November 1951 the
dispute was referred by the Uttar Pradesh government to the industrial tribunal for adjudication.
The tribunal held that there was a contract between the workmen and the management to pay
the said sum of t45,000 as bonus and accordingly directed the management to pay the same. The
labour appellate tribunal upheld the award. Thereupon the employer preferred an appeal before the
Supreme Court. Justice Venkataraman A yyar of the Supreme Court agreed with the management that
there was no concluded agreement between the parties and therefore, there was no liability to pay
the said sum to workmen. However, his Lordship emphasized the need of economic reason in the
ease of retrenchment and held that there was a discharge of workmen under both the circumstances
when there was retrenchment and closure of business and, therefore, 'the compensation was to be
awarded under the law not for discharge as such but for discharge on retrenchment.'
46 Pipraich Sugar Mills v. Pipraich Sugar Mills Mazdoor Union, op. cit.
47 AIR 1976 SC 1111; See Suresh C Srivastava 'Benefits against Forced Unemployment in Indian Industries'
IJlR Vol. 10, No. 3, 197 5. 347.
 Lay-off, Retrenchment, Transfer and Closure • 49 3

challenged in view of Sections 2 (oo) and 25-F. Justice Krishna Iyer delineating the scope
of 'retrenchment' observed:

A breakdown of Section 2 (oo) unmistakably expands the semantics of

retrenchment. Termination for any reason whatsoever, are the key words.
Whatever the reason, every termination spells retrenchment. So the sole
question is, has the employee's service been terminated? Verbal apparel apart,
the substance is decisive. A termination takes place where a term expires either
by the active step of the master or the running out of the stipulated term. To
protect the weak against the strong, this policy of comprehensive definition
has been effectuated. Termination embraces not merely the act of termination
by the employer, but the fact of termination howsoever produced.48
The aforesaid observation not only makes a departure from the interpretation of the
Court in Barsi Light Railway Company, but also impliedly overrules the decision. However,
inM/s. Hindustan Steel Ltdv. Labour Court,49 again an attempt was made to revive the issue
of conflict in Supreme Court decision, but the Court explained that there was no conflict
between the Barsi Light Railway Company and State Bank ofIndia v. N Sundara Money50 because
according to the first case,'retrenchment' would not include bona fide closure of the whole
business. This attempt is not only futile but is self-contradictory. It may be added that even
after the 1956 and 1957 amendments to the Industrial Disputes Act, 1947, the non-prescription
of re-employment on re-opening of establishment persisted, leading the judiciary to examine
the justifiability of closure.
Again in Delhi Cloth and General Mills Co. Ltd v. Shambhu Nath Mukherji51 , it was held
that striking-off the names of the workmen from the rolls would amount to retrenchment
within the meaning of Section 2 (oo) of the Act.
Since Justice Krishna Iyer wrote the judgement in State Bank ofIndia v. N Sundara Money,
it is not surprising to find a similar view being referred to and followed concerning the
interpretation of the word 'retrenchment' by Justice Krishna Iyer himself in Santosh Gupta
v. State Bank of Patiala52 and Gujarat Steel Tubes Ltd v. Gujarat Steel Tubes Mazdoor Sabha53
and thereby bringing the conflict in Barsi Light Railway Company and State Bank of India v.
N Sundara Money to its forefront.
Santosh Gupta v. State Bank of Patiala54 has stretched the principle laid down in Sundara
Money's case. In this case, State Bank of Patiala terminated the services of one of its workman
(a woman) who had put in more than 240 days of service, [deemed continuous service
for a year under Section 25 B (2)] on the ground of her failure to pass the prescribed test
provided for confirmation in service. She was neither served with a notice required under
Section 25 F(a), nor paid retrenchment compensation under Section 25 F (b ). On these facts
a question arose whether termination of service of the workman by the bank due to the
failure of the workman to pass the prescribed test for confirmation in service amounted

48 AIR 1976 SC 1111 at 1114.

49 M/s. Hindustan Steel Ltd v. Labour Court, AIR 1977 SC 31.
50 State Bank of India v. Sundara Money, AIR 1976 SC 1111.
51 Delhi Cloth and General Mills Co. Ltd v. Shambhu Nath Mukherji AIR 1978 SC 8.
52 Santosh Gupta v. State Bank of Patiala, (1980) 2 LLJ 72 (SC).
53 Gujarat Steel Tubes Ltd v. GST. Mazdoor Sabha, (1980) 1 LLI 137.
54 Santosh Gupta v. State Bank of Patiala. op. cit.
494 • Industrial Relations and Labour Laws

to a 'retrenchment'. The Court preferred to adopt a broad interpretation of the expression

'retrenchment' and stated:

[I]f due weight is given to the words 'the termination by the employer of the
service of a workman for any reason whatsoever' and if the words 'for any
reason whatsoever' are understood to mean what they plainly say, it is difficult
to escape the conclusion that the retrenchment must include every termination
of service of a workman by an act of the employer ... except those not included
in Section 25-F or not expressly provided for in any other provisions of the Act
such as Section 25-FF and 25-FFF.
The Court accordingly held that the discharge of the workman on the ground that she
did not pass the test which would have enabled her to be confirmed was 'retrenchment'.
Earlier in Gujarat Steel Tubes v. Gujarat 'Steel Tubes Mazdoor Sabha 55, Justice Krishna
Iyer speaking for the Court spoke in a similar tone:

We are disposed to stand by the view that discharge, even where it is not
occasioned by a surplus of hands, will be retrenchment, having regard to the
breadth of the definition.
From the aforesaid decisions, it is evident that the Supreme Court gave literal
construction and rejected the ordinarily accepted connotation of the word 'retrenchment'. The
Court, has thereby, approved the controversial judgement in State Bank ofIndia v. N Sundara
Money56 as also in Hindustan Steel Ltd v. State of Orissa57 and made a departure from Barsi
Light Railway Company v. KN Joglekar 58, Pipraich Sugar Mills v. Pipraich Sugar Mills Mazdoor
Union 59 and, Banaras Ice Factory Ltd v. Their Workmen. 60
The consequence of this interpretation is far-reaching. It would render use of the word
'discharge' in Section 2-A superfluous, introduce anomaly in the application of Sections-
llA, 25 G, 25H and 33 and throw the scheme of the Industrial Disputes Act, 1947 out of
gear. However, if this view is accepted, management would be forced either to dismiss, or
retrench workers in case of loss of confidence or strained relationship between employers
and workmen or termination on abolition of the post or even in cases of labour employed
on contract work, work of temporary nature or work of seasonal character. Indeed, it would
be anomalous to the point of absurdity and would result in horrifiying situation if an
employer who terminates the services of his workman for loss of confidence or inefficiency
or insubordination and the like is compelled to re-employ that very workman in the same
industry or business and that too in preference to other workmen whose services are not
terminated either for loss of confidence, inefficiency, insubordination and the like. 61
We believe that Barsi Light Railway Company on the one hand, and State Bank of India v.
N Sundara Money, Santosh Gupta and Gujarat Steel Tubes on the other, took extreme views of
the matter; if the former unduly restricted the coverage of 'retrenchment', the latter gave a

55 Gujarat Steel Tubes v. Gujarat Steel Tubes Mazdoor Sabha (1980} 2 LLJ 72.
56 State Bank of India v. N Sundara Money, AIR 1976 SC 1111.
57 Hindustan Steel Ltd v. State of Orissa, AIR 1973 SC 31.
58 Barsi Light Railway Company v. KN Joglekar, op. cit.
59 Pipraich Sugar Mills v. Pipraich Sugar Mills Mazdoor Union, (1957) 1 LLJ 235 (SC}.
60 Banaras Ice Factory Ltd v. Their Workmen, (1957) I LLJ 253 (SC}.
61 Ramesh Kumar v. Central Government Industrial Tribunal, (1980} Lab. IC 1116 (Born.).
 Lay-off, Retrenchment, Transfer and Closure • 49 5

wide meaning and, thus, threw the revised scheme of the Industrial Disputes Act, 1947 out
of gear. Further, the consequences of re-opening of the issue after several amendments in
the Industrial Disputes Act, 1947 are tremendous. Before we conclude our discussion of this
section, it would be relevant to note that Justice Pathak who wrote a separate judgement in
Surindra Kumar v. Industrial Tribunal-cum Labour Court62 was inclined to disagree with the
decision in the Santosh Gupta case which is evident from the following observation:

No question arises before us whether the termination of the services of the

appellants amounts to 'retrenchment' within the meaning of Section 2 (oo) of the
Act. The respondent bank has apparently accepted the finding of the industrial
tribunal-cum-labour court that the termination amounts to retrenchment. It
has not preferred any appeal. I mention this only because I should not be taken
to have agreed with the interpretation of Section 2 (oo) rendered in Santosh
Gupta v. State Bank of Patiala.
In L Robert D 'Souza v. Executive Engineer, Southern Railway63 , the Supreme Court had
followed the interpretation of the expression 'retrenchment' given in State Bank of India v.
N Sundra Mon:1,,64 Hindustan Steel Ltd v. Presiding Officer, Labour Court,65 Santosh Gupta v. State
Bank ofPatiala, Delhi Cloth & General Mills Ltd v. Shambhu NathMukherjee,67 Surindra Kumar Varma
v. Central Government Industrial Tribunal 68 and Mohan v. Bharat Electronics Ltd69 and refused to
accept the contention that the Court should ignore the interpretation of 'retrenchment' given in
the aforesaid cases and should proceed on the construction of Section 2 (oo) setoutinHariprasad
Shivshankar Shukla v. AD Divalkar. 70 The submission was made apparently in view of the obiter
of Justice Pathak in Surindra Kumar Varma' s case wherein he stated that his concurrence with the
majority view propounded by Justice Reddy should not be taken to imply his agreement with
the interpretation of Section 2(oo) rendered in Santosh Gupta's case. However, the Court stated:

[T]here is neither apparent nor real conflict between the decision of the
Constitution bench in Hariprasad Shukla's case and the later five decisions
commencing from Sundara Money and ending with Mohanlal 's case, it would
be sheer waste of time and merely adding to the length of the judgement to
re-examine this contention all over again, so as to cover similar ground.
The Court added:

The definition of expression 'retrenchment' in Section 2(00) is so clear and

unambiguous that no external aids are necessary for its proper construction.
Therefore, we adopt as binding the well settled position in law that if termination
of service of a workman is brought about for any reason whatsoever, it would be

62 Surindra Kumar v. Industrial Tribunal, (1981} 1 LLJ 386.

63 (1982} 1 SCC 545; AIR 1982 SC 854; (1982} 1 LLJ 330. A question arose whether the termination for
unauthorized absence from duty by workmen amounted to 'retrenchment'.
64 (1976) 3 SCR 160.
65 AIR 1977 SC 31.
66 AIR 1981 SC 1219.
67 AIR 1978 SC 8.
68 AIR 1981 SC 422.
69 AIR 1981 SC 1253.
70 AIR 1957 SC 121.
496 • Industrial Relations and Labour Laws

retrenchment except if the case falls within any of the excepted categories, i.e.,
(i) termination by way of punishment inflicted pursuant to disciplinary action;
(ii) voluntary retirement of the workman; (iii) retirement of the workman on
reaching the age of superannuation if the contract of employment between the
employer and the workman concerned contains as stipulation in that behalf;
(iv) or termination on the ground of continued ill-health. Once the case does
not fall in any of the excepted categories, the termination of service even if it
be automatic discharge from service under agreement would nonetheless be
retrenchment within the meaning of expression in Section 2 (oo). It must, as
a corollary follow that if the name of the workman is struck off the roll, that
itself would constitute retrenchment as held by this Court in Delhi Cloth &
General Mills Ltd case. 71
The Supreme Court in Binoy Kumar Chatterjee v. Jugantar Limited72 drew a shar~
distinction between Santosh Gupta v. State Bank of Patiala73, Mohan Lal v. Bharat Electronics, 4
L Robert D' Souza v. Executive Engineer, Southern Railway75 and this case. It held that all the
earlier cases arose on termination of a workman's service at a point of time when he had
not reached the age of superannuation. However, on reaching the age of superannuation,
if he is employed afresh for a certain period, such employment cannot be equated with
'employment' within the meaning of the term retrenchment and, therefore, the termination
of the service of such workman on the expiry of his period of contract would not constitute
retrenchment'. In this case, the petitioner was re-employed by the company on reaching the
age of superannuation. He was paid retiral benefits which he willingly received. Thereafter,
he was offered fresh employment on contract basis for a period of 12 months. His service was
terminated on the expiry of the said period. Thereupon, the petitioner challenged the validity
of the order on the ground that he was neither served a notice nor was paid retrenchment
compensation under Section 25 F and therefore, the termination of his service was illegal.
On these facts, a question arose whether the termination of his subsequent service under a
fresh contract was 'retrenchment'. The Supreme Court held that the termination of service
of the workmen was not retrenchment.
The decision of Justice Pathak appears to be in conformity with the observations made
by him in Surindra Kumar Varma case. 76 This is also in accord with the legislative scheme
framed under the Industrial Disputes Act, 1947. Indeed the decision has made some departure
from the rigid approach adopted in L Robert D 'Souza v. Executive Engineer, Southern Railway77 •

Termination of Service of Probationer-Not Retrenchment

In LIC of India v. Raghvendra Seshagiri Rao Kulkarni78, the Supreme Court was invited to
consider the validity of order of termination of service of a development officer while he

71 (1982) Lab. IC 811 at 815; See also Devinder Singh v. Muncipal Council, Sanaur, 2011 Lab IC 2799 para
10 (SC).
72 (1983) 1 LLJ 8.
73 (1980) 2 LLJ 72.
74 (1981) 2 LLJ 70.
75 (1982) 1 LLJ 330.
76 Surender, Kumar Verma v. Central Government Industrial, AIR 1981 SC 422.
77 (1982) 1 LLJ 330 (SC).
78 1998 Lab. IC41 l(SC): See also Narmada Building Materials (P) Ltdv. Devassy, (1999) lLLJ 142 (Kerala).
 Lay-off, Retrenchment, Transfer and Closure • 497

was on probation by the LIC of India. In the instant case, the respondent was discharged
from serviced uring probation in terms of Regulation 14(4) of the Life Insurance Corporation
of India (Staff) Regulations, 1960.
A three-judge bench of the Supreme Court in M Venugopal v. Divisional Manager, Life
Insurance Corporation of India, Machalipatnam, A P79 held that the termination of respondent's
services would amount to 'retrenchment' as defined in Section 2(oo) of the Industrial Disputes
Act and since the requirements of Section 25-F of that Act were not complied with, the
termination would be bad. It may be pointed out that Life Insurance Corporation (Amendment)
Act, 1981 (Act of 1981) which came into force on 31 January 1981 provided that under sub-
section (2A) of Section 48 of the Life Insurance Corporation Act, 1956, the regulations which
were already in force immediately before the commencement of the Amendment Act, shall
be deemed to be rules made by the Central Government and they shall be deemed to have
effect notwithstanding anything contained in the Industrial Disputes Act 1947.
The validity of the Amendment Act was upheld by the Supreme Court in A V Nachane
°
v. Union of India. 8 For this reason also, the ground that termination would amount to
retrenchment within the meaning of Section 2(oo) of the Industrial Disputes Act cannot be
entertained.

Termination as a Result of Closure-Not Retrenchment

The Supreme Court in HP Minerals and Industrial Development Corporation Employees Union
v. State of H P 81 held that 'retrenchment' as defined under Section 2(00) does not cover
termination of service as a result of closure of an undertaking.

Striking-off the Name of Absentees-Retrenchment

lnArun Mathur v. Labour Court82, striking off the name of the workman from the attendance
register for being absent without any intimation was held to be retenchment under Section
2 (oo). Further, even service for fixed periods, with notional breaks, terminated, and not
renewed, was also held to be 'retrenchment', and not covered under Clause (bb).
In Hari Singh v. Industrial Tribunal-cum-Labour Court, Rohtak83, striking-off the name
of the workman from the attendance register for being absent without any intimation
was held to be 'retrenchment' under Section 2 (oo). The Supreme Court in Rolstan Joh v.
Central Government Industrial Tribunal-cum-Labour Court,84 held that termination of service
of a workman, under clause 24(e) of the standing orders, for overstaying of leave period
without proper explanation amounted to 'retrenchment' under Section 2(oo) of the Industrial
Disputes Act,1947.

79 (1994) 2sec 323: (1994 AIR sew 778).

80 AIR 1982 SC 1126: (1982) 25CF 1246 (1982) 1 sec 205.
81 (1996) 7 sec 139.
82 1993 1 C.L.R. 467. Also see Hari Singh v. I. T. cum-L.C. Rohtak, (1993) II LLN 244; Kurukshetra Central
Co-operative Bank Ltd v. State of Haryana,1993 (66) FLR 197.
83 1993 II LLN 244.
84 1994 Lab. IC 1973; The same view was taken in Mohd. Abdul Kadir v. A.P. State Road Corporation,
(1984) 2 LLJ 75 (HC Andhra); Desh Raj v. Industrial Tribunal, (1984) Lab IC 1651 lHC Patna) and
H.M.T. Ltd v. Labour Court, (1983)ILLI 33'7 (H.C. Kerala); Roap Narain Shukla v. Industrial Tribunal,
(1997) LLR 924 (H C Punjab & Haryana).
49 8 • Industrial Relations and Labour Laws

Voluntary Resignation-If Retrenchment

Is voluntary resignation covered under the exception (a) to Section 2(00)? The question
came up for consideration before the Supreme Court inM/s JK Cotton Spinning and Weaving
Mills Co. Ltd, Kanpur v. State of UP85 • In this case, an employee had voluntarily resigned.
The resignation was accepted by the employer. Subsequently, a dispute was raised by the
workman which went up to the Allahabad High Court. The High Court held it to be a case of
'retrenchment' and ordered payment of retrenchment compensation. On appeal, the Supreme
Court held that when a contract of service is terminated on the employee exercising his right
to quit, such termination cannot be said to be at the instance of the employer to fall within
the first part of the definition of' retrenchment' in Section 2 of the Act. The Court accordingly
held that voluntary resignation amounted to voluntary retirement and not 'retrenchment'.
In Shri Krishna v. Prescribed Authority, Kanpur 86, the Allahabad High Court held that
a resignation voluntarily given snaps employer-employee relationship, unless standing
orders or terms of contract require acceptance of resignation by employer as a condition
precedent. Accordingly, it falls within voluntary retirement under Clause (a) of Section
2(oo) and was not retrenchment.

Termination of Service on Superannuation

The second set of circumstance which takes termination of service outside Section 2 (oo)
and Section 25- F of the Act is when a workman reaches the age of superannuation. Clause
2 (b), however, lays down a condition that the contract of service must contain a provision
for such superannuation and also specify the age of superannuation. The question whether
a workman attained the age of superannuation or not will depend on the facts of each
case and on the conduct of the parties. A termination prior to the age of superannuation
laid down in the contract of employment is liable to be struck down. Further, it would be
prudent for an employer to give notice to the concerned workman of his intention to do
so. This is all the more so when there is a difference of opinion as to the correct age of the
concerned workman.
In Ambika Singh v. UP State Sugar Corpn. Ltd87, dates of birth of two workmen in the
records of the regional provident fund commissioner, UP and the Life Insurance Corporation
of India were different. The company accepted the former record and retired the two
employees on superannuation. The workmen's plea was that adequate opportunity had
not been given to them before altering their dates of birth and hence there was a violation
of principles of natural justice. The Allahabad High Court upheld the plea and set aside the
orders of superannuation and dismissed the management's plea that the workman had an
alternate remedy under the Industrial Disputes Act, 1947.

Compulsory Retirement
The order of compulsory retirement amounts to 'retrenchment' and if Section 25-F has not
been complied with in such case, the employee is entitled to restatement. Thus, the Court

85 (1990) II CLR 542.

86 (1995) Lab. IC 280.
87 (1991) I LLN 490.
 Lay-off, Retrenchment, Transfer and Closure • 499

in Mahabir v. 0 K Mittal, Dy. Chief Mechanical Engineer, N.E. Rly. 88 quashed the order of
compulsory retirement of the petitioner employee who was compulsorily retired on attaining
age of 55 years under Indian Railways Establishment Code Rule 2046.
In State Bank of India v. Workmen of State Bank of India 89, the Supreme Court held that
the termination of service of the bank employees under paragraph 521 (10) (c) of the Sastry
Award is a result of disciplinary proceedings and was 'punitive' and therefore did not
amount to 'retrenchment' within the meaning of Section 2 (oo).
The aforesaid decision suggests that the termination on the ground of loss of confidence
will be tantamount to dismissal. Thus, the Supreme Court decision overrules the possibility
of termination of service by way of discharge. While agreeing with the Court's view that it
is not a case of 'retrenchment', it is submitted that this decision, in effect, renders the use of
the word 'discharge' in Section 2A superfluous, introduces anomaly in the application of
Sections II A and 33 and throws the scheme of the Act out of gear.
Scope of Section 2 (oo) (bb). In order to restrict the wide coverage given by the courts to
the term 'retrenchment', Section 2 (oo) was amended adding sub-clause (bb) to Section 2 (oo) by
the Industrial Disputes (Amendment) Act, 1984 which came into effect from 18 August 1984.
The scope of Clause (bb) of Section 2 (oo) has been the subject-matter of judicial controversy.
Courts have interpreted the expression 'retrenchment' in its widest possible connotation
despite the legislative intent behind the clause (bb) to restrict the scopes of definition of
retrenchment. This is evident from the decision of the constitution bench of five judges of
the Supreme Court in Punjab Land Development Corporation Ltd v. Presiding Officer, Labour
Court, Chandigarh 90• The Court while considering the precise question whether the expression
'retrenchment' in Section 2 (oo) has to be interpreted in its narrow, natural, contextual meaning
or in its wider, literal meaning negatived the contention of the employer and laid down that
the definition of 'retrenchment' in Section 2(00) means termination by the employer of the
service of a workman for any reason whatsoever, otherwise than as a punishment inflicted
by way of disciplinary action, and those expressly excluded by the definition.
The Supreme Court in State of Rajasthan v. Rameshwar Lal Gahlote91 held that where
the service of workman is terminated in terms of letter of appoinbnent which provides for
termination after the expiry of a fixed period, it is saved by Clause (bb) of Section 2(oo)
unless there is a finding that the power under Clause (bb) of Section 2 (oo) was misused
or vitiated by its mala fide exercise or the appoinbnent for a fixed period was a colourable
exercise of power, no order of reinstatement or reappoinbnent can be made.

Termination of Service after Expiry of Fixed Period

In Haryana State F C C W Stores Ltd v. Ram Niwas, 92 the workmen concerned were appointed
on contract basis on payment of daily wages. They were told clearly that their appoinbnent
was on contract basis till the stock of grain stored in the open area at mandi was disposed
of or for a period of 3 months. The management terminated their services after the stock
lying in the open area was cleared. The workmen raised an industrial dispute which was

88 (1979) 2LLJ 363.

89 (1990) Lab. IC 1750 (SC).
90 (1990) (61) FLR 73.
91 (1996) I sec 595: AIR 1996 SC 1001.
92 (2002) Lab IC 2624.
500 • Industrial Relations and Labour Laws

referred to the labour court. The labour court held that the workmen were not entitled to
any relief. On a writ petition, High Court set aside the order of the labour court and directed
reinstatement of workmen with full back wages. Aggrieved by this order, the employer filed
a special leave to appeal before the Supreme Court. It was invited to decide (z) whether on
the facts and circumstances of the case, the termination of service of the respondents was
'retrenchment' in terms of section 2 (oo) of the ID Act; and (iz) whether Section 2 (oo) (bb)
of the Act had any application in the case. The Court held that the termination of service
did not amount to retrenchment as it fell under clause (bb) of Section 2 (oo) of the Act and,
therefore, workmen were not entitled to any relief.

Project Employment-Not Covered

In Surendra Kumar Sharma v. Vikas Adhikari,93 the appellant was employed as a junior
engineer on daily wages for a period of 100 days in a scheme known as rural employment
programme. On completion of 100 days, the authority passed a specific order of termination
on 29 December 1988. But the appellant was offered yet another temporary employment in
a scheme known as Jeevan Dhara vide order dated 17 January 1989. The employment was
extended from time to time upto 12 June 1989. The last order of appoinbnentwas made for a
period of 7 days which was issued on 24 June 1989 and which came to an end on 30 June 1989.
Thereupon, the appellant, and a few others similarly employed filed a writ petition in the
High Court, which by an interim order protected their employment. However, the High
Court held that as the posts have been abolished, the question of their regularization did
not arise. The High Court also held that the workmen were given employment under the
schemes on an ad hoe basis, and from the very beginning, knew that the employment was
of a temporary nature and coterminus with the scheme itself, and therefore, they could
not be said to have been retrenched within the meaning of Section 2 (oo) of the Industrial
Disputes Act and they were not entitled to the relief of reinstatement if the provisions of
Section 25F of the Act were not complied with. Aggrieved by the order, the appellants filed
a writ appeal which was also dismissed by the division bench of the High Court. Thereupon,
an appeal by special leave was filed before the Supreme Court.
The Supreme Court ruled that those employed under the scheme could not ask for
more than what the scheme intended to give them. To get employment under such a scheme
and to claim on the basis of the said employment, a right to regularization, is to frustrate
the scheme itself. No court can be a party to such an exercise. It is wrong to approach the
court with the problems of those employed under such schemes with a view to providing
them with full employment and guaranteeing equal pay for equal work.
The Court, while dismissing the appeal, also remarked that the appellant was a daily
wager in a scheme and knew it well that his employment was coterminus with the scheme.
The post against which the appellant worked had been abolished for want of funds and
had ceased to exist.
Another landmark judgment is SM Nilajkar v. Telecom District Manger, Karnataka 94•
Here, the telecom deparbnent employed certain casual labourers on a project for extension
of telecom facilities in the district of Belgaum. Their services were utilized for digging,
laying of coaxial cables and other sundry work. The project was completed sometime in

93 2003 LLR 625 (SC).

94 (2003) 4 sec 27.
 Lay-off, Retrenchment, Transfer and Closure • 501

1986-87 and the services of these workmen were terminated sometime during 1987. After
a lapse of a few years, they raised an industrial dispute and the same was referred to the
Central Government Industrial Tribunal-cwn-Labour Court, Bangalore. The tribunal directed
reinstatement of all the workmen with the benefit of continuity of service and with 50 per
cent back wages. Aggrieved by this order, the employer filed a writ petition in the High
Court. The single judge of the High Court held that the workers were not project employees
as the appoinbnent was not for any particular project. Hence they would not be ~overned
by sub-clause (bb) of clause (oo) of Section 2 of the Industrial Disputes Act, 1947. 5
Aggrieved by this order, the employer filed a writ appeal in the Karnataka High Court
which held that the workmen were employed under a project of the telecom deparbnent and
were, therefore, covered by sub-clause (bb) of clause (oo) of Section 2 of the Act. In appeal
to the Supreme Court, the question to be decided was whether the workmen recruited for
discharging a temporary job under a project can insist on compliance with Section 25-F of
the Act if their services were dispensed with on the project coming to an end. The Court
after referring to the provisions of Sections 2 (oo) and 25-F of the Act observed 96:

It is also well settled that Parliament has employed the expression 'the
termination by the employer of the service of a workman for any reason
whatsoever' while defining the term 'retrenchment', which is suggestive of
the legislative intent to assign the term 'retrenchment' a meaning wider than
what it is understood to have in common parlance.
The Court then referred to the four exceptions of Section 2 (oo) and said that in order
to be excluded from 'retrenchment', the termination of service must fall within one of the
four excepted categories. Termination of service which does not fall within these categories
would fall within the meaning of 'retrenchment'.
Applying this principle, the Court pointed out that it may not amount to retrenchment
within the meaning of sub-clause (bb) if: (i) the workman was employed in a project or
scheme of temporary duration; (iz) the employment was on a contract, and not as a daily-
wager simpliciter, which provided, inter alia, that the employment shall come to an end on
the expiry of the scheme or project; (iii) the employment came to an end simultaneously
with the termination of the scheme or project and consistently with the terms of the contract;
and (iv) the workman was apprised or made aware of the above terms by the employer at
the commencement of employment.
The Court held that to exclude the termination of an employee under the scheme
or project from the definition of retrenchment, it is for the employer to prove that he was
employed in a project so as to attract the applicability of sub-clause (bb ). In the instant case,
the respondent employer had failed to prove the same. All that had been proved was that
the appellants were engaged as casual workers or daily-wagers in a project. For want of

95 In order to restrict the wide coverage given by the courts to the term 'retrenchment', Section 2
(oo) was amended adding sub-clause (bb) to itby the Industrial Disputes (Amendment) Act, 1984
which came into effect from 18 August 1984. The scope of clause (bb) of Section 2 (oo) has been the
subject-matter of judicial controversy. Courts have interpreted the expression 'retrenchment' in its
widest possible connotation despite the legislative intent behind clause (bb) to restrict the scope of
definition of retrenchment.
96 Id. at 36-37.
502 • Industrial Relations and Labour Laws

proof, attracting applicability of sub-clause (bb) it had to be held that termination of services
of the appellants amounted to retrenchment.
As regards delay in raising the dispute, the Court said that delay in raising it would
certainly be fatal if the delay has resulted in material evidence relevant to adjudication being
lost and not available which was not the case with the case at hand.
The Court, accordingly, upheld the order of the single judge of the High Court that
workmen be reinstated but without back wages.
While dealing with a number of cases pending in different form, namely, industrial-
cum-labour court or high court raising similar issues awaiting decision, the Court made it
clear that all such cases shall be heard and decided in accordance with the law laid down in
this case. The Court posted out that as the project in which the workmen were engaged has
come to an end, the government may consider the appellants being accommodated in some
other project or scheme or regular employment, if available, by issuing suitable instructions
or guidelines. However, if it was not possible, the respondent shall be at liberty to terminate
the employment of the appellants after reinstating them as directed by the High Court, after
complying with Section 25-F of the Industrial Disputes Act.

Automatic Termination of Service-Not Covered by Clause (bb)

In Uptron India Ltd v. Shammi Bhan 97, the Supreme Court while interpreting clause (bb) of
Section 2 (oo) observed:

What the clause, therefore means is that there should have been a contract
of employment for a fixed term between the employer and the workmen
containing a stipulation that the services could be terminated even before the
expiry of the period of contract. If such contract on the expiry of its original
period, is not renewed and the services are terminated as a consequence of
that period, it would not amount to retrenchment. Similarly, if the services are
terminated even before the expiry of the period of contract but in pursuance of
a stipulation contained in that contract that the services could be terminated,
then in that case also, the termination would not amount to 'retrenchment'.
The Court accordingly held that the automatic termination of service under the certified
standing orders would not be covered under clause (bb) of Section 2 (oo).

Termination of Service After Crushing Season was Over-Not Retrenchment

In Morinda Co-op Sugar Mills Ltd v. Ram Kishan 98, the Supreme Court while dealing with
engagement of a seasonal workman in sugarcane crushing held that non-engagement of
workman was not a case of 'retrenchment' but of the closure of the factory, after the crushing
season was over. Thus, they were covered under clause (bb) of Section 2 (oo).
The aforesaid view was reiterated by the three-judge bench of the Supreme Court in
Anil Bapurao Kanase v. Krishnq Sahkari Sakkar Karkhana Ltd99• In this case, the management

97 1998 LLR 383 (SC); See also Escorts Ltd v. Presiding Officer, (1997} 2 SCC 621; General Secretary,
M.P.K.M. Panchayat (HMS) v. Western Coalfield Ltd, (1999) I LLJ 772.
98 JT 1995 (6) SC 547.
99 (1998) I LLJ 343.
 Lay-off, Retrenchment, Transfer and Closure • 5 o3

terminated the services of an employee working in the chemistry section of the sugar factory
after the crushing season was over. It was contended that the termination amounted to
'retrenchment' and was made in violation of Section 25-F.
The Supreme Court negatived the contention and held that since the work was of
seasonal nature, the principle of the Industrial Disputes Act, 1947 was not applicable. Further,
they were covered under clause (bb) of Section 2(00) of the Act.

Retrenchment of Workmen due to Closure of a Unit-Not Retrenchment

InM P State Textiles Corporation Ltd v. Mahendra,100 the corporation recruited certain workmen
and posted them to its different units. However, on closure of one of its unit, namely,
Indore Textile Mills, the workmen employed therein were retrenched, even though it was
stipulated in the letter of appointment that they could be appointed anywhere or transferred
to various textile mills. On these facts, the labour court held the retrenchment to be illegal and
directed reinstatement. The award was upheld by the High Court. On appeal, the Supreme
Court held that the respondent workmen were the employees of the corporation and their
retrenchment by Indore Textile Mills was without authority of law since they were not the
employees or workmen of Indore Textile Mills.

Scope of Section 2 (oo) (c)

In Management of Bisra Stone Lime Co. Ltd v. Their Workmen 101 , a question arose whether
workmen suffering from fits of intermittent nature were covered under continual ill-health
under Section 2(oo) (c) of the Industrial Disputes Act, 1947. The Orissa High Court answered
the question in the negative and observed:

Ill-health means disease, physical defect or infirmity or unsoundness. A person

who is not free from disease is certainly not possessing a sound health for (sic)
active duties and if this sort of thing continued for a long period, he must be
said to be suffering from continued ill-health for continued ill-health suggests
that it is prolonged for a considerable period. Ill-health which is intermittent,
cannot be termed as continued ill-health. It should be of sufficiently long
duration and continuous.
In Anand Bihar v. Rajasthan State Road Transport Corporation, Jaipur,102 the Supreme Court
held that the termination of service of workmen on account of incapacity due to sub-normal
eye-sight or loss of required vision to work was covered by clause (c) of Section 2(00) and
therefore, was not 'retrenchment'.
In M Venugopal v. Divisional Manager, Life Insurance Corporation of India 103, the Supreme
Court was invited to consider whether the termination of service of appellant while he
was on probation on the ground that he failed to achieve the target business amounted
to retrenchment within the meaning of Section 2(00). The Supreme Court answered the
question in negative, and held that any such termination, even if the provisions of the

100 (2005) LLR 706.

101 (1992} Lab. IC 451 (Orissa).
102 (1991} Lab. IC 494.
103 J.T. (1994) (t) SC 281.
504 • Industrial Relations and Labour Laws

Industrial Disputes Act were applicable, shall not be deemed to be retenchment within
the meaning of Section 2(00) having been covered by sub-section (bb). The Court added
that if in the contract of employment, no stipulation as mentioned under clause (bb) of
Section 2( oo) is provided or prescribed, then such contract shall be covered by clause (bb)
of Section 2(oo).

D. Conditions Precedent to Retrenchment of Workmen

1. The Context
Under common law, the employer had the unfettered right to terminate the services of his
workmen. But with the emergence of the concept of social justice, restrictions have been
imposed on the exercise of this unfettered right. Prior to 1953, we have already seen, there was
no statutory law of retrenchment compensation. Due to serious and acute problems in textile
industry, the provisions for lay-off and retrenchment compensation were incorporated into
the Industrial Disputes Act, 1947 to relieve the hardship caused by unemployment without
any fault of the workmen: involuntary unemployment also causes dislocation of trade and
may result in general economic insecurity. Justice SK Das speaking for the Supreme Court
in Hariprasad Shivashankar Shukla v. AD Divalkar 104 pointed out the necessity and reasons
for insertion of retrenchment compensation into the aforesaid Act as follows:

It is reasonable to assume that in enacting Section 25F, the legislature

standardized the payment of compensation to workmen retrenched in the
normal or ordinary sense in an existing or continuing industry, the legislature
did away with the perplexing variety of factors for determining the appropriate
relief in such cases and adopted a simple yardstick of the length of service of
the retrenched workmen...

2. Legislative Response
In order to give effect to above recommendations, the Parliament enacted Section 25-F which
lays down the conditions precedent to retrenchment of workmen as follows:
No workman employed in any industry who has been in continuous service for not
less than one year under an employer shall be retrenched by that employer until:
(a) the workman has been given one month's notice in writing indicating the reasons for
retrenchment and the period of notice has expired, or the workman has been paid in
lieu of such notice, wages for the period of the notice.
(b) the workman has been paid, at the time of retrenchment, compensation which shall
be equivalent to 15 days' average pay for every completed year of continuous service
or any part thereof in excess of 6 months.
An analysis of the above reproduced provisions shows that no workman employed in
any industry who has been in continuous service for not less than one year under an employer
can be retrenched by that employer until the conditions enumerated in clauses (a) and (b) of
Section 25-F of the Act are satisfied. In terms of clause (a), the employer is required to give
to the workman one month's notice in writing indicating the reasons for retrenchment or

104 AIR 1957 SC 121.

 Lay-off, Retrenchment, Transfer and Closure • 505

pay him wages in lieu of the notice. Clause (b) casts a duty upon the employer to pay to the
workman at the time of retrenchment, compensation equivalent to 15 days' average pay
for every completed year of continuous service or any part thereof in excess of 6 months.

3. Judicial Response
The Supreme Court has held in State of Bombay v. Hospital Mazdoor Sabha 105, Bombay Union
of Journalists v. State of Bombay 106, SBI v. N Sundara Money 107, Santosh Gupta v. State Bank
of Patiala 108, Mohan Lal v. Bharat Electronics Ltd109, L Robert D' Souza v. Southern Railway110,
Surendra Kumar Verma v. Central Govt. Industrial Tribunal-cum-Labour Court 111 , Gammon India
Ltd v. Niranjan Dass 112, Gurmail Singh v. State of Punjab 113 and Pramod Jha v. State of Bihar 114;
Sections 25-F(a) and (b) of the Act are mandatory and non-compliance therewith renders
the retrenchment of an employee a nullity.
The Supreme Court has used different expressions for describing the consequence
of terminating a workman's service/employment/engagement by way of retrenchment
without complying with the mandate of Section 25-F of the Act. Sometimes it has been
termed as ab initio void, sometimes as illegal per se, sometimes as nullity and sometimes as
non est. Anoop Sharma v. Public Health Division, Haryana 115 held that termination of service
of an employee by way of retrenchment without complying with the requirement of giving
one month's notice or pay in lieu thereof and compensation in terms of Sections 25-F(a)
and (b) has the effect of rendering the action of the employer as nullity and the employee is
entitled to continue in employment as if his service was not terminated.
Requirement of Notice or Wages in Lieu thereof. Section 25 F requires that a workman
employed in any industry should not be retrenched until he has been given either (i)
one month's notice in writing indicating the reasons for retrenchment after the period
of notice has expired; or (iz) the workmen has been paid in lieu of such notice wages
for the period of notice. However, where retrenchment notice stated that most of the
projects were completed and there was no other job available for the employees, it was
not a valid notice as there was no complete closure 116• The latter provision permits the
employer to retrench the workman on paying him wages in lieu of one month's notice
prescribed by the earlier part of the clause and if the employer decides to retrench a
workman, he is not required to give one month's notice in writing and wait for the
expiration of the said period before he retrenches him, he can proceed to retrench him
straightaway on paying him his wages in lieu of the said notice.

105 AIR 1960 SC 610.

106 AIR 1964 SC 1617: (1964) 6 SCR 22.
107 (1976) 1 sec 822: 1976 sec (L&S) 132: (1976) 3 scR 160.
108 (1980) 3 sec 340: 1980 sec (L&S)409: (1980) 2 LLJ 72.
109 (1981) 3 sec 225: 1981 sec (L&S)478: AIR 1981 sc 1253.
110 (1982) 1 sec 545: 1982 sec (L&S)124.
111 (1980) 4 sec 443: 1981 sec (L&S)16. AIR 1981 sc 422.
112 (1984) 4 sec 509: 1984 sec (L&S)144.
113 (1991) 1 sec 189: 1991 sec (L&S)147.
114 (2003) 4 sec 619: 2003 sec (L&S)545.
115 2010 (4) SCALE 203.
116 Lal Mohammad v. Indian Railway Construction Co. Ltd, 1999 LLR 100.
506 • Industrial Relations and Labour Laws

Displaying notice of retrenchment on notice board-does not meet the statutory

requirements. InAluminaMazdoor Sangh v. Ratna Construction Co.,117 the division bench
of the Orissa High Court has clarified that notice pasted on the notice board will not
be substitute for notice to workman to be retrenched.
Compensation under Section 25 F (b).Clause (b) of Section 25 F provides another
safeguard in the interest of the workmen. It provides that no workman employed in
any industry, who has been in continuous service for not less than one year under
an employer, shall be retrenched until he has been paid at the time of retrenchment,
compensation, which' shall be equivalent to 15 days' average pay for every completed
year of service or any part thereof in excess of 6 months. The Supreme Court has held
that the compliance with this provision is mandatory and failure to do so would render
the retrenchment invalid and inoperative in law.
In State of Bombay v. Hospital Mazdoor Sabha 118, the hospital run by the state of Bombay
terminated the services of two maid-servants. The retrenched employees moved the Bombay
High Court for the appropriate writ against the state of Bombay on the ground that the
retrenchment order was void for failure to comply with the mandatory provisions of Sections
25-F and 25-H of the Industrial Disputes Act, 1947. The Bombay High Court decided in
favour of the workmen. Thereupon, the state of Bombay preferred an appeal before the
Supreme Court. Observed Justice Gajendragadkar:

On a plain reading of Section 25 F (b ), it is clear that the requirement prescribed

by it is a condition precedent for the retrenchment of the workman. The Section
provides that no workman shall be retrenched until the condition in question
has been satisfied. It is difficult to accede to the argument that when the Section
imposes in mandatory terms a condition precedent, non-compliance with the
said condition would not render the impugned retrenchment invalid .... So
failure to comply with the said provision renders the impugned orders invalid
and inoperative.
The nature of retrenchment compensation has been explained in Indian Hume Pipe Co.
Ltd v. The Workmen 119 as follows:

As the expression 'retrenchment compensation' indicates, it is compensation

paid to a workman on his retrenchment and it is intended to give him some
relief and to soften the rigour of hardship which retrenchment inevitably
causes. The retrenched workman is, suddenly and without his fault, thrown
on the street and has to face the grim problem of unemployment. At the
commencement of his employment, a workman naturally expects and looks
forward to security of service spread over a long period; but retrenchment
destroys his hopes and expectations. The object of retrenchment compensation
is to give partial protection to the retrenched employee and his family to enable
them to tide over the hard period of unemployment.

117 (2003)LLR 382.

118 (1960)2 SCR 866.
119 AIR 1960 SC 251.
 Lay-off, Retrenchment, Transfer and Closure • 507

Collection of dues from the office-if sufficient compliance with Section - 25F.
Section 25F of the Industrial Disputes Act, 1947 requires that wages must be given at the
time of retrenchment. A question, therefore, arises whether mere calling upon the workmen
to be retrenched to collect dues from the office would be sufficient tender and fulfils the
requirements of Section 25F.
In M/s National Iron and Steel Co. Ltd v. State of West Bengal, 120 the workman was
given notice dated 15 November 1958 for termination of his service with effect from
17 November 1958. In the notice, it was mentioned that the workman would get one
month's wages in lieu of notice and he was asked to collect his dues from the cash office
on 20 November 1958 or thereafter during the working hours. On these facts, the Supreme
Court held that the offer was not substantial compliance of Section 25F, under which it was
incumbent on the employer to pay the workman the wages for the period of the notice in
lieu of the notice. That is to say,if hewasasked to go forthwith,he had to be paid atthe time
when he was asked to go and could not be asked to collect his dues afterwards. In Stain Steel
Products v Naipal Singh 121, the management had merely said that whatever was due could
be collected from the office. The Court held that the offer was not in substantial compliance
of Section 25F.
In SBI v. N Sundara Money 122, the Court emphasized that the workman cannot be
retrenched without payment, at the time of retrenchment, compensation computed in terms
of Section 25-F (b).
The legal position has been summed up in Pramod Jha N State ofBihar123 in the following
words:

10 .... The underlying object of Section 25-F is twofold. Firstly a retrenched

employee must have one month's time available at his disposal to search for
alternate employment, and so, he should be paid wages for the notice period.
Secondly, the workman must be paid retrenchment compensation at the
time of retrenchment or before, so that once having been retrenched, there
should be no need for him to go to his employer demanding retrenchment
compensation and the compensation so paid is not only a reward earned for
his previous services rendered to the employer but is also a sustenance to the
worker for the period which may be spent in searching for another employment.
Section 25-F nowhere speaks of the retrenchment compensation being paid or
tendered to the worker along with one month's notice; on the contrary, clause (b)
expressly provides for the payment of compensation being made at the time
of retrenchment and by implication, it would be permissible to pay the same
before retrenchment. Payment or tender of compensation after the time when
the retrenchment has taken effect would vitiate the retrenchment and non-
compliance with the mandatory provision which has a beneficial purpose and
a public policy behind it would result in nullifying the retrenchment.
(emphasis in original)

120 1967 (14) FLR 356.

121 (1970) 1 sec s22.
122 (1976) 3 SCR 160.
123 2003 (97) FLR 110.
508 • Industrial Relations and Labour Laws

The aforesaid issue again came up for consideration in Anoop Sharma v. Executive
Engineer, Public Health Division 124• Here, the Supreme Court held that if the workman
is retrenched by an oral order or communication or he is simply asked not to come for
duty, the employer will be required to lead tangible and substantive evidence to prove
compliance with clauses (a) and (b) of Section 25-F of the Act. Here in his statement, the
workman categorically stated that before discontinuing his service, the respondent did not
give him notice pay and retrenchment compensation. Shri Ram Chander, who appeared
as the sole witness on behalf of the respondent stated that the compensation amounting to
f5,491 was offered to the appellant along the with letter, but he refused to accept the same.
The respondent did not examine any other witness to corroborate the testimony of Ram
Chander and no contemporaneous document was produced to prove that the compensation
was offered to the appellant on 25 April 1998. Not only this, the respondent did not explain
as to why the demand draft was sent to the appellant after more than 3 months of his
alleged refusal to accept the compensation on 25 April 1998. In view of this, the Supreme
Court observed that if there was any grain of truth in the respondent's assertion that the
compensation was offered to the appellant on 25 April 1998 and he refused to accept the
same, there could be no justification for not sending the demand draft by post immediately
after the appellant's refusal to accept the offer of compensation. The minimum which the
respondent ought to have done was to produce the letter with which the draft was sent
at the appellant's residence. The contents of that would have shown whether the offer of
compensation was made to the appellant on 25 April 1998 and he refused to accept the
same. However, the fact of the matter is that no such document was produced. Therefore
there was non-compliance with Section 25-F of the Act.
From the above it is evident that the Supreme Court has relaxed the requirement
of Section 25F by adopting the doctrine of 'substantial compliance'. It is submitted that
whatever may be the impact of the judgement, it would certainly facilitate the process
of retrenchment.
Adjustment of Dues Against Payment Under Clauses (a) and (b) of Section 25 F.
In Utkal Asbestos Ltd v. T S Rao 125, the retrenched workman admitted that the dues were
adjusted by the employer against payments to be made under clauses (a) and (b) of Section
25-F. It was contended that non-payment was violative of Section 25-F. The labour court
held termination of service to be void. On a writ petition filed against the order of the labour
court, the Orissa High Court held that language of Section 25-F (a) and Section 25-F (b) does
not permit adjusbnent.
In Ram Krishan Sharma v. Samrat Ashok Technical Institute 126, services of a clerk in a
technical education institution were terminated who had put in 5 years of service. But there
was no compliance with Section 25-F. The Madhya Pradesh High Court admitted the petition,
but held that the relief can only be a declaratory one, namely grant of continuity of service.
Effect of Non-acceptance of Retrenchment Compensation. Where several workmen
had been retrenched and retrenchment compensation and wages in lieu of notice were
sent by registered post to each individual workman but were not accepted, it was held

124 2010 (4) SCALE 203.

125 (1992) 2 LLN 752.
126 1995 Lab. IC 654.
 Lay-off, Retrenchment, Transfer and Closure • 509

that pay in lieu of notice had been duly sent, and its refusal by workmen does not
invalidate tender of payment. 127

E. Continuous Service. For the purposes of Chapter VA:

1. a workman shall be said to be in continuous service for a period if he is, for that period,
in uninterrupted service, including service which may be uninterrupted on account of
sickness or authorized leave or an accident or strike which is not illegal, or a lockout
or a cessation of work which is not due to any fault on the part of the workman:
2. where a workman is not in continuous service within the meaning of clause (1) for a
period of one year or 6 months, he shall be deemed to be in continuous service under
an employer-
(a) for a period of one year, if the workman, during a period of 12 calendar months
preceding the date with reference to which calculation is to be made, has actually
worked under the employer for not less than-
(i) 190 days in the case of a workman employed below ground in a mine; and
(iz) 240 days, in any other case;
(b) for a period of 6 months, if the workman, during a period of 6 calendar months
preceding the date with reference to which calculations are to be made, has actually
worked under the employer for not less than-
(i) 95, in the case of a workman employed below ground in a mine; and
(iz) 120 days, in any other case.
Explanation: For the purposes of clause (2), the number of days on which a workman
has actually worked under an employer shall include the days in which-
(i) he has been laid-off under an agreement or as permitted by standing orders made
under the Industrial Employment (Standing Orders) Act, 1946 (20 of 1946), or under
the Act or under any other law applicable to industrial establishments.
(iz) he has been on leave with full wages, earned in the previous years;
(iii) he has been absent due to temporary disablement caused by accident arising out of
and in the course of his employment; and
(iv) In the case of females, she has been on maternity leave; so, however that the total
period of such maternity leave does not exceed 12 weeks.

Scope of Sub-sections 1 and 2

In Mohanlal v. Bharat Electronics Ltd128, Mohan Lal was employed as a salesman from
8 December 1979. The managementterminated his services with effect from 19 October 1974.
Consequent upon his termination, Delhi administration referred the dispute to the labour
court for adjudication. The labour court having found that the termination of service of
Mohan Lal was in accordance with the standing orders which justified removal of the
employee on unsuccessful probation during the initial or extended period of probation
held that it did not constitute 'retrenchment'. Against this, the respondent appealed to the

127 EID Parry (India) Ltd v. Labour Court, 1992 Lab. IC 278.
128 (1981) 2 LLJ 70 (SC).
5 1o • Industrial Relations and Labour Laws

Supreme Court by special leave. The question, inter alia, for determination was whether
Mohan Lal was entitled to a declaration that he continued to be in service with consequential
benefits. In order to determine this question, the Court examined the requirements under
sub-section (1) of Section 25-B and observed.

Sub-section (1) provides deeming fiction. Thus, where a workman is in service

for a certain period, he shall be deemed to be in continuous service for that
period even if service is interrupted on account of sickness or authorized leave
or an accident or a strike which is not illegal or lockout or a cessation of work
which is not due to any fault on the part of the workman....Sub-section(l)
mandates that interruption therein indicated is to be ignored meaning thereby
that on account of such cessation, an interrupted service shall be deemed to be
uninterrupted and such uninterrupted service shall for the purpose of Chapter
VA be deemed to be continuous service.
The Court then examined the requirements under sub-section (2) of Section 25 B and
observed:

[1] n order to invoke the fiction enacted in sub-section (2) (a), it is necessary to
determine first the relevant date, i.e., the date of termination of service. After
that date is ascertained, move backward to a period of 12 months just preceding
the date of retrenchment and then ascertain whether within the period of
12 months, the workman has rendered service for a period of 240 days. If
these facts are affirmatively answered in favour of the workman, pursuant
to the deeming fiction in sub-section (2), it will have to be assumed that the
workman is in continuous service for a period of one year and he will satisfy
the eligibility qualification enacted in section 25-F.
The Court accordingly held that Mohan Lal rendered service for a period of 240 days
within a period of 12 months and his case fell within Section 25 B (2) (a) and he shall be
deemed to be in continuous service for a period of one year for the purpose of Chapter VA.
It accordingly held that Mohan Lal had thus satisfied both the eligibility qualifications
prescribed in Section 25-F for claiming retrenchment compensation.

Concept and Scope of One Year

In General Manager, Haryana Roadways, v. Rudhan Singh, 129 the Supreme Court held that the
requirements of Section 25F of the Act would be satisfied if a workman has worked for 240
days in a period of 12 months and it is not necessary that he should have been in the service
of the employer for complete one year.
In H S Rajashekara v. State Bank of Mysore 130, the Supreme Court held that for labour
related matters, the terms 'calendar year' and 'block of 12 months' are interchangeable. It
would be sufficient if the petitioner could establish that he had rendered more than 240
days' service in a 'block of 12 months'. This should be the determining factor in a case where
the consideration pertained to an employee's claim for inclusion in the 'protected category'
on account of having rendered 240 days' service in a 'calendar year'. In view of above,

129 (2005) LLR 849.

130 (2012) 1 sec 285.
 Lay-off, Retrenchment, Transfer and Closure • 5 11

the Court was satisfied that the petitioner fulfilled the condition of having rendered service
for 240 days in a 'calendar year'.
InH D Singh v. RB !1 31 and Workmen ofAmerican Express International Banking Corporation
v. Management of the American Express International Banking Corporation,132 the Supreme Court
held that even Sundays and other holidays would be included for the purpose of counting
the 'continuous service' of 240 days under Section 25B of the Industrial Disputes Act, 1947.
In Management of Standard Motor Products of India Limited v. A Parthasarathy 133, the
Supreme Court held that under Section 25-B (2), where a workman is not in continuous
service within the meaning of clause (1) for a period of one year, he shall be deemed to
be in continuous service for a period of one year, if the workman, during a period of 12
calendar months preceding the date with reference to which calculation is to be made, has
actually worked under the employer for not less than 240 days. The Court added that even
if the period of illegal strike is not taken into account, the number of days during which the
workman actually worked under the employer, in the instant case, was more than 240 days
and, therefore, he was in 'continuous service' for a period of one year immediately before
the date of closure, under Section 25 B (2).

Determination of Continuity of Service

Can work done in different units, projects, branches or subdivisions under the same authority
be treated as one establishment for the purpose of recording continuity of service under
Section 25B. This issue was raised in a number of decided cases.
In Union of India v. Jummasha Diwan 134, the Supreme Court observed that where there
are several establishments of railways administration and if a workman voluntarily gives up
his job in one establishment and joins another, the same would not amount to his being in
continuous service. Further, when a casual employee is employed in different establishments,
may be under the same employer, e.g. railways as a whole, having different administrative
set ups, different requirements and different projects, the concept of continuous service
cannot be applied.
The Constitution bench of the Supreme Court in Management of Indian Cable Co. Ltd
v. Workmen 135 dealt with the expression 'industrial establishment' albeit with reference to
Section 25-G of the ID Act and held that each branch of a company should normally be
regarded as a distinct industrial establishment.
In DGM Oil & Natural Gas Corporation Ltd v. Ilias Abdul Rehman 136, the question arose
whether work put in by the workman in different units, namely, Baroda and Mehsana
projects of Oil and Natural Gas Corporation could be counted for determining whether the
workman worked for 240 days continuously for the purpose of Section 25-F of the ID Act.
The Supreme Court answered the question in the negative and held that the Baroda and
Meshana projects of the corporation could not be considered as a single unit or department
under the corporation and, therefore, the days put in by the workman in different units could

131 1985 Lab. IC 1733 (SC}.

132 1986 Lab. IC 98.
133 1986 Lab. 101 (SC}.
134 (2006} 8 sec 544.
135 1962 Supp (3) SCR 589.
136 (2005) 2 sec 183.
5 12 • Industrial Relations and Labour Laws

not be counted for determining whether the workman worked for 240 days continuously
for the purpose of Section 25-F of the ID Act.
In Haryana Urban Development Authority v. Orn Pal 137, the question raised before this
Court was whether the two sub-divisions of Haryana Urban Development Authority could
be treated to be one establishment for the purpose of recokoning continuity of service
within the meaning of Section 25-B of the Act. The Court held that once two establishments
are held to be separate and distinct having different cadre strength of workmen, then the
period during which the workman was working in one establishment would not ensure to
his benefit when he was recruited separately in another establishment, particularly when
he was not transferred from one sub-division to the other. In this case, he was appointed
merely on daily wages.
In Haryana State Co-op. Supply Marketing Federation v Sanjay 138, the respondent was
engaged on contractual basis by the District Manager, HAFED, Jind for the period from
1.8.1998 to 31.12.1998, for 145 days of service. The district manager, HAFED, Hissar engaged
the workman afresh on 15.1.1999 upto 31.5.199, for 112 days of service. As service of respondent
was not renewed after 31.5.1999, he raised a dispute alleging that his services were illegally
terminated without following mandatory procedure provided in Section 25-F of the ID Act.
The management contended that the workman having not completed 240 days of continuous
service, there was no necessity of compliance with Section 25-F of the Act. On the other hand,
it was contended by the respondent workman that the period of his engagement with district
manager, HAFED, Jind and district manager, HAFED, Hissar be clubbed while computing
240 days of continuous service. A question arose whether work rendered by the workman in
the office of district manager, HAFED, Jind and district manager, HAFED, Hissar could be
clubbed together for purposes of application of Section 25-F of the ID Act. The Court answered
the question in negative and observed:

[T]he office of the district manager, HAFED, Jind and the office of the district
manager, HAFED, Hissar are two distinct and separate establishments and
cannot be treated as one establishment for the purpose of reckoning continuity
of service within the meaning of Section 25-F read with Section 25-B of the
ID Act. It is so because the workman was engaged on contract basis by two
separate authorities under different contracts.
The Court added:

Merely because the district manager, Jind and the district manager, Hissar are
subordinate officers under the control of managing director, HAFED, the two
offices at Jind and Hissar do not cease to be separate establishments for the
purposes of Section 25F of the ID Act.
In Range Forest Officer v. S T Hadimani 139, the Supreme Court held that where the
management denies the claim that claimant worked for 240 days, it is for the claimant to
lead evidence to show that he had in fact worked for 240 days in the year proceeding his
termination. The Court also held that mere filing of an affidavit is not adequate as it is only

137 (2007)s sec 742.

138 (2009)LLR 1014: (2009) 14 sec 43.
139 2002 Lab. IC 987.
 Lay-off, Retrenchment, Transfer and Closure • 5 1 3

his own statement in his favour and that cannot be regarded as sufficient evidence for any
court or tribunal to arrive at the conclusion that a workman had, in fact, worked for 240
days in a year. This is all the more so when no proof of receipt of salary or wages for 240
days or order or record of appoinbnent or engagement for this period was produced by
the workman.
Burden of Proof: It has now been well-settled in a series of decisions of the Supreme
Court that the burden of proof is on the workman to show that he had worked for 240 days
in the preceding 12 calender months prior to the alleged retrchment. Further, presumption
as to adverse inference for non-production of muster-roll by the employer should not be
taken as an inflexible rule. It is always optional and one of the factors which is required to
be taken into consideration is the background of the factors involved in the lis.
In Municipal Corporation, Faridabad v. Shri Niwas 140, the Supreme Court held that the
burden of proof was on the workman to show that he had worked for 240 days in the
preceding 12 calendar months prior to the alleged retrenchment. On facts, the Court found
that the workman, apart from examining himself in support of his contention did not produce
or call for any document from the office of the management including the muster-roll. He
did not produce his offer of appoinbnent showing the terms and conditions therein. He
also did not examine any other witness in support of his case. The Court, therefore, ruled
that presumption as to adverse inference for non-production of evidence is always optional
and one of the factors which is required to be taken into consideration is the background of
the factors involved in the lis. The Court held that although the provisions of the Evidence
Act, 1872 per se are not applicable to industrial adjudication, the general principles of it are
still applicable. The Court also held that it was imperative for the industrial tribunal to see
that principles of natural justice were complied with.
In Bank of Baroda v. Ghemarbhai Harjibhai Rabri141, the workman had established the fact
that he worked as driver of the car belonging to the bank for more than 240 days during the
relevant period. The workman also produced 3 vouchers which showed that he had been
paid certain sums of money towards his wages and the said amount had been debited to the
account of the bank. The bank denied the claim of the workman but did not produce any
evidence to rebut the vouchers. It, however, pleaded that the employment of such driver
was under a scheme by which he was in reality the employee of the executive concerned.
On these facts, the Supreme Court held that the workman has established his claim to be
the workman of the bank. The Supreme Court ruled that the burden of proof lies on the
workman who claims to be a workman of the management. However, the degree of such
proof so required varies from case to case.
Again in Chief Engineer (Construction) v. Keshava Rao142, the Supreme Court reiterated
that initial burden of establishing factum of continuous work for 240 days within a year is
on respondent-workmen.
In Manager, RBI Bangalore v. S Mani 143 , the management retrenched certain workmen.
The workmen challenged the order for non-compliance with Section 25-F of the Industrial
Disputes Act, 1947. However, the management denied such a claim on the ground that the
workmen had not completed 240 days of service during a period of 12 months preceeding

140 (2004)s sec 195.

141 2005 LLR 443 (SC).
142 2005 LLR 446 (SC).
143 2005 LLR 737.
514 • Industrial Relations and Labour Laws

the order of termination. The workmen did not produce any oral or documentary proof
in support of their claim. On these facts, a three-judge bench of the Supreme Court ruled
that (i) the workmen have to state in their evidence that they worked for 240 days in the
preceding one year of their termination, (ii) pleadings are not the substitute for proof,
(iii) it is wrong to contend that the plea raised by the workmen that they had worked
continuously for 240 days was deemed to have been admitted by applying the doctrine
of non-traverse.
The aforesaid view was reiterated in Rajasthan State Ganganagar S Mills Ltd v. State of
Rajasthan 144•

It was the case of the workman that he had worked for more than 240 days
in the year concerned. This claim was denied by the appellant. It was for the
claimant to lead evidence to show that he had in fact worked up to 240 days
in the year preceeding his termination. He has filed an affidavit. It is only his
own statement which is in his favour and that cannot be regarded as sufficient
evidence for any court or tribunal to come to the conclusion that in fact the
workman had worked for 240 days in a year.
No proof of receipt of salary or wages for 240 days or order or record in that
regard was produced. Mere non-production of the muster-roll for a particular
period was not sufficient for the labour court to hold that the workman had
worked for 240 days as claimed.
In RM Yellatti v. Executive Engineer 145, the Supreme Court while analysing the above
decisions observed that the provisions of the Evidence Act in terms do not apply to the
proceedings under Section 10 of the Industrial Disputes Act. However, applying general
principles and on reading the aforestated judgements, the Court pointed out that it has
repeatedly taken the view that the burden of proof is on the claimant to show that he had
worked for 240 days in a given year. This burden is discharged only upon the workman
stepping in the witness box for adducing cogent evidence, both oral and documentary. In
cases of termination of services of daily-wage earners, there will be no letter of appoinbnent
or termination. There will also be no receipt or proof of payment. Thus in most cases, the
workman (the claimant) can only call upon the employer to produce before the court the
nominal muster roll for the given period, the letter of appoinbnent or termination, if any,
the wage register, the attendance register, etc. Drawing of adverse inference ultimately
would depend thereafter on the facts of each case.
In Ganga Kisan Sahkari Chini Mills Ltd v. Jaivir Singh 146, the Supreme Court again
held that the burden of proof to have worked for 240 days in the preceding 12 months of
termination of service lies upon the workman and not the employer.
In General Manager, B SN L v. Mahesh Chand147, the Supreme Court held that the High
Court and the industrial tribunal have erred in placing the onus upon the employer to prove
that the workman had worked for 240 days in a calendar year.

144 (2004) s sec 161.

145 (2006) 1 sec 106.
146 2007 LLR 260.
147 2008 LLR435.
 Lay-off, Retrenchment, Transfer and Closure • 5 15

In Chief Soil Conservator, Punjab v. Gurmail Singh 148, the Supreme Court held that it is
for the workman to establish that he was engaged for more than 240 days in the 12 months
preceding the date of alleged termination.
The Supreme Court in Krishan Bhagya Jal Nigam v. Mohammed Rafi149, held that mere
affidavits or self-serving statements made by the claimant workman will not suffice in the
matter of discharge of the burden placed by law on the workman to prove that he had worked
for 240 days in a given year. The Court also held that mere non-production of muster-roll
per se without any plea of suppression by the claimant workman will not be the ground for
the tribunal to draw an adverse inference against the management.

F. No Regularization for Adhoc, Temporary Workers under any

Scheme who worked for 240 days
In Delhi Development Horticulture Employee's Union v. Delhi Administration, 150 the Supreme
Court held that persons employed under the scheme cannot claim regularization merely
because they have put in more than 240 days of service.
In State ofHaryana v. Piara Singh 151 , the Supreme Court held that it is difficult to sustain
the direction that all those ad hoe temporary employees who have continued for more than
one year should be regularized. This direction is given without reference to the (i) existence
of vacancies, (iz) sponsoring by employment exchange, (iii) fulfilling the eligibility conditions
and service record, etc.

Badli Workers
The Supreme Court had an opportunity to deal with the issues relating to badli workmen
in Radha Raman Samanta v. Bank of India. 152 Here, a bipartite agreement between the
bank and the workers provided that a badli worker is entitled to be absorbed if he has
completed 240 days of badli service in a block of 12 months or a calendar year after
10 February 1988. In pursuance to this agreement, a worker sought his regularization on
the ground that he had completed 240 days of service in a calendar year as a badli worker.
In order to determine the question, the Supreme Court, in absence of any definition of
'badli worker', defined it to mean a person who is employed as a casual workman working
in place of another. The Court held that in this case, the worker had rendered service in
a vacancy of a temporary post for more than 240 days even though the nomenclature
of his work profile was changed. This, according to the Court was sufficient to treat
him as a badli worker for the purposes of absorption. The Court, therefore, held that
the badli worker had a right to be absorbed in the respondent bank by virtue of the bipartite
agreement. The aforesaid view was reiterated in H S Rajashekara v. State Bank of Mysore. 153

G. Notice to the Appropriate Government

Clause (c) of Section 25-F requires notice to be served by the employer on the appropriate
government in the prescribed manner if a workman is retrenched. The nature of this clause

148 2009 LLR 875.

149 (2009) 11 sec 522.
150 (1992) 1 LLN 939.
151 (1992) 2 LLN 1037.
152 (2004) 1 sec 605: 2004 sec (L&s) 248.
153 (2012) 1 sec 285.
5 16 • Industrial Relations and Labour Laws

namely, whether it is mandatory and conditions precedent, like clauses (a) and (b) of Section
25-F, has been debated in a number of decided cases.
In State ofBombay v. Hospital Mazdoor Sabha 154, the Supreme Court while holding Section
25-F (b) to be mandatory, observed that clauses (a) and (c) of the said Section prescribed
similar conditions. However, the Court was cautious when it expressly added that it was
not concerned to construe them.
In Tea District Labour Association v. Its Ex-Employees 155, it was conceded that the
requirement as to notice prescribed by clause (c) of Section 23 was mandatory and amounted
to condition precedent. Likewise, in Workmen of Subong Tea Estate v. Subong Tea Estate156 in
an obiter, observed that three conditions laid down in clauses (a), (b) and (c) of Section 25-F
prima facie appeared to constitute conditions before industrial workers could be validly
retrenched. However, in Bombay Union of Journalists v. State of Bombay 157, the Supreme
Court was invited to decide whether clause (c) of Section 25-F providing for notice to the
government was mandatory. The Supreme Court answered it in negative and pointed out
that under clause (a), there was an option given to the employer either to give one month's
notice or to pay one months's wages in lieu of notice, the Court asked the question as to
how would clause (c) operate in the latter case and answered it as follows:

... .if it is held that the notice in prescribed manner has to be served by the
employer on the appropriate government before retrenching the employee
in such a case, it would mean that even in a case where refrenchment is
effected on payment of wages in lieu of notice, it cannot be valid unless the
requisite notice is served on the appropriate government; and that does not
appear to be logical or reasonable. Reading the latter part of clause (a), and
clause (c) together, it seems to follow that in cases falling under the latter
part of clause (a), the notice prescribed by clause (c) has to be given not
before retrenchment, but after retrenchment; otherwise, the option given to
the employer to bring about immediate retrenchment of the workman on
paying him wages in lieu of notice would be rendered nugatory. Therefore,
it seems that clause (c) cannot be held to be condition precedent even though
it has been included under Section 25 F along with clauses (a) and (b) which
prescribe conditions precedent.
From the aforesaid decision it is evident that clause (c) unlike clauses (a) and (b) is
merely directory and not mandatory.

H. Conditions-Precedent to Retrenchment: 1976-Position

The Industrial Disputes (Amendment) Act, 1976 imposed additional restrictions upon the
power of employer employing 300 or more workmen in the industry in retrenching his
employees. Thus, Section 25 N prohibited the employer from retrenching workmen until (i)
he has been given three months' notice in writing indicating reasons for retrenchment and
the period of notice has expired or wages in lieu of such notice which may be dispensed with

154 State of Bombay v. Hospital Mazdoor Sabha, (1960) I LLJ 251 (SC).
155 District
Labour Association v. Its Ex-employees, (1960) 1 LLJ 802 (SC).
156 Workmen of Subong Tea Estate v. Subong Tea Estate, op. cit.
157 Bombay Union of Journalists v. State of Bombay, op.cit.
 Lay-off, Retrenchment, Transfer and Closure • 5 17

if the retrenchment is under an agreement which specifies the date of termination of service;
(iz) the workmen have been paid at the time of retrenchment a compensation equivalent to
15 days' average pay for each completed year of service or any part thereof in excess of 6
months; and (iii) a notice in the prescribed manner is served to the appropriate government
or authority and its permission is obtained. Such permission or refusal shall be granted only
after making such inquiry as the authority deems fit. However, such permission shall be
deemed to be granted if no communication is received from the authority within 60 days
from the date of notice.

I. Constitutional Validity of Sections 25 N and 25 Q of the

industrial Disputes (Amendment) Act, 1976 (Since Amended)
The division bench of the Madras High Court in KV Rajendram v. Deputy Commissioner 158 was
called upon to decide the constitutional validity of Sections 25-N and 25-Q of the Industrial
Disputes Act, 1947. The Court held that Section 25 N as a whole and Section 25-Q in so far
as it relates to the awarding of punishment for contravention of the provision of Section
25 N was ultra vires the Constitution. This view in the Court's opinion was based on the
Supreme Court decision in Excel wear v. Union of India 159 which declared Sections 25-Q and
25-R of the Act to be ultras vires the Constitution.

J. Industrial Disputes (Amendment) Act, 1984:

Condition-Precedent to Retrenchment of Workmen

1. General
The aforesaid decisions of the high courts led the Parliament to re-draft the provisions of
Section 25-N on the lines of the amended provisions relating to closure which was inserted
by the Industrial Disputes (Amendment) Act, 1984 after considering the observations of the
Supreme Court in Excel Wear case. 160
Section 25-N of the Industrial Disputes (Amendment) Act, 1984 which lays down
conditions precedent upon the power of the employer employing 100 or more workmen in
the industrial establishment in retrenching his workmen provides:
1. No workman employed in any industrial establishment to which this Chapter applies,
who has been in continuous service for not less than one year under an employer shall
be retrenched by that employer until-
(a) the workman has been given 3 months' notice in writing indicating the reasons
for retrenchment and the period of notice has expired, or the workman has been
paid in lieu of such notice, wages for the period of the notice; and
(b) the prior permission of the appropriate government or such authority as may be
specified by that government by notification in the official gazette (hereinafter in this
section referred to as the specified authority) has been obtained on an application
made in this behalf.

158 K V Rajendran v. Deputy Commissioner, (1980) 2 LLJ 276 (Mad.).

159 ExcelWear v. Union of India, (1978) 2 LLJ 527 (SC).
t6olbid.
5 1 8 • Industrial Relations and Labour Laws

2. An application for permission under sub-section (1) shall be made by the employer
in the prescribed manner stating clearly the reasons for the intended retrenchment
and a copy of such application shall also be served simultaneously on the workmen
concerned in the prescribed manner.
3. Where an application for permission under sub-section (1) has been made, the
appropriate government or the specified authority, after making such inquiry as it
thinks fit and after giving a reasonable opportunity of being heard to the employer,
the workmen concerned and the person interested in such retrenchment, may, having
regard to the genuineness and adequacy of the reasons stated by the employer, the
interest of the workmen 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.
4. Where an application for permission has been made under sub-section (1) and the
appropriate government or the specified authority does not communicate the order
granting or refusing to grant permission to the employer within a period of 60 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 60 days.
5. An order of the appropriate government or the specified authority granting or refusing
to grant permission shall, subject to the provisions of sub-section (6), be final and
binding on all the parties concerned and shall remain in force for one year from the
date of such order.
6. The appropriate government or the specified authority may, either on its own motion
or on the application made by the employer or any workmen, review its order granting
or refusing to grant permission under sub-section (3) or refer the matter or, as the case
may be, cause it to be referred 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 a period of 30 days from the date of such reference.
7. Where no application for permission under sub-section (1) is made, or where the
permission for any retrenchment has been refused, such retrenchment shall be
deemed to be illegal from the date on which the notice of retrenchment was given to
the workman and the workman shall be entitled to all the benefits under any law for
the time being in force as if no notice had been given to him.
8. 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 accident in the establishment or death of the employer or the like,
find that it is necessary so to do, by order, direct that the provisions of sub-section (1)
shall not apply in relation to such establishment for such period as may be specified
in the order.
9. Where permission for retrenchment has been granted under sub-section (3) or where
permission for retrenchment is deemed to be granted under sub-section (4), every
workman who is employed in that establishment immediately before the date of
application for permission under this section shall be entitled to receive, at the time
of retrenchment, compensation which shall be equivalent to 15 days' average pay for
every completed year of continuous service of any part thereof in excess of 6 months.
A perusal of the aforesaid provisions reveals that Section 25 N provides complete
scheme for retrenchment of workmen in industrial establishments where the number
 Lay-off, Retrenchment, Transfer and Closure • 5 19

of workers is in excess of 100. Clauses (a) and (b) lay down the conditions precedent to
retrenchment and provide for 3 months' notice or 3 months' wages in lieu of notice to the
concerned workmen and the prior permission of the appropriate government/prescribed
authority. Sub-sections (2) and (3) plainly envisage the appropriate government/prescribed
authority to take a quadi-judicial decision and to pass a reasoned order on the employer's
application for permission for retrenchment after making a proper inquiry and affording
an opportunity of hearing not only to the employer and the concerned workmen but also
the person interested in such retrenchment. Sub-section (4) has the provision of deemed
permission. Sub-section (5) makes the decision of the government binding on all parties. Sub-
section (6) gives the government the power of review and the power to refer the employer's
application for pennission to a tribunal for adjudication. Any retrenchment without obtaining
prior permission of the government is made expressly illegal by sub-section (7) with the
further stipulation that the termination of service in consequence thereof would be void ab
initio. Sub section (8) empowers the government to exempt the application of subsection
(1) under certain exceptional circumstances and sub-section (9) provides for payment of
retrenchment compensations to the concerned workmen.
The procedural details for seeking prior permission of the appropriate government
for carrying out retrenchment under section 25N are laid down in rule 76A of the
Industrial Disputes Central Rules. The application for permission for retrenchment is to
be made in Form PA and that requires the employer to furnish all the relevant materials
in considerable detail.

2. Constitutionality of Section 25-N (as amended in 1984)

In Workmen of Meenakshi Mills Ltd v. Meenakshi Mills 161 , a five-judge bench of the Supreme
Court held that Section 25 N as amended in 1984 does not suffer from the vice of non-
constitutionality on the ground that it is violative of the fundamental right guaranteed under
Article 19 (1) (g) of the Constitution and is not saved by Article 19(6) of the Constitution.
The Supreme Court while determining the validity of conferment of power on
appropriate government to grant or not to grant permission of retrenchment observed:

The power to grant or refuse permission for retrenchment of workmen that

has been conferred under Section 25N(2) has to be exercised on an objective
consideration of the relevant facts after affording an opportunity to the parties
having an interest in the matter and reasons have to be recorded in the order
that is passed.
The Court added:

The inquiry, which has to be made under sub-section (2) before an order
granting or refusing permission for retrenchment of workmen is passed,
would require an examination of the said particulars and other material that
is furnished by the employer as well as the workman. In view of the time limit
of 3 months prescribed in sub-section (3), there is need for expeditious disposal
which may not be feasible if the proceedings are conducted before a judicial
officer accustomed to judicial process. Moreover, during the course of such

161 (1992) 2 LLJ 295.

5 20 • Industrial Relations and Labour Laws

consideration, it may become necessary to explore the steps that may have to
be taken to remove the causes necessitating the proposed retrenchment which
may involve interaction between the various deparbnents of the government.
This can be better appreciated and achieved by an executive officer rather than
a judicial officer .162

3. Nature of Section 25N (6) Proviso 25-0

The nature of Section 25N (6) proviso was explained by the division bench of the Bombay
High Court in Association of Engineering Workers v. Indian Hume Pipe Co. Ltd163 The Court
held that Section 25N (6) of the Act, which requires the tribunal to pass an award within
a period of 30 days from the date of the reference, is directory and not mandatory and,
therefore, on the expiry of the said time limit, the reference will not lapse but will survive
for adjudication.
The Supreme Court in Lal Mahammad v. Indian Railway Construction Ltd 164, held
that the proviso to Section 25-0 cannot be transplanted by any judicial interpretation as
proviso to Section 25-N deals with an entirely different topic namely, condition-precedent
to retrenchment of workmen.

4. Settlement-if it prevails over statutory requirements

In M/s Oswal Agro Ltd v. Oswal Agro Furane Workers 165, the industrial undertaking was
set up as a 100 per cent export oriented unit for paddy processing, furfural and rice bran
extraction. However, allegedly in view of lack of demand in the international market for
its product, rice bran oil was sold by it in the local market, where for no registration-cum-
allocation certificate below the minimum price was obtained. The said violation made the
appellant liable to pay a sum of t50 crore under different heads to the State. Allegedly
on the ground of such a huge liability, notices were issued to the state government
under Section 25-0. Notices were also issued to the workmen, whereupon a purported
settlement was arrived at under Section 12(3) of the Industrial Disputes Act, 1947. The
respondent union questioned the said settlement in a writ petition before the High Court.
The High Court allowed the petition. Thereupon, the appellant filed an appeal before the
Supreme Court. A question, inter alia, arose whether in a case of closure of an industrial
undertaking, prior permission of the appropriate government is imperative and whether
a settlement arrived at by and between the employer and the workmen would prevail
over the statutory requirements as contained in Section 25-N and Section 25-0 of the
Industrial Disputes Act, 1947. Answering the question, the Supreme Court laid down
the following principles.

A bare perusal of the provisions contained in Sections 25-N and 25-0 of the
Act leaves no manner of doubt that the employer who intends to close down
the undertaking and/or effect retrenchment of workmen working in such
industrial establishment, is bound to apply for prior permission at least 90 days

162 (1992) 2 LLJ 295 at 313.

163 1986 Lab. IC 749.
164 1999 Lab. IC 407 (SC).
165 (2005) LLR 305.
 Lay-off, Retrenchment, Transfer and Closure • 5 21

before the date on which the intended closure is to take place. They constitute
conditions precedent for effecting a valid closure; whereas the provisions of
Section 25-N of the Act provide for conditions precedent to retrenchment;
Section 25-0 speaks of procedure for closing down an undertaking. Obtaining
prior permission from the appropriate government, thus, must be held to be
imperative in character.
The Court added:

A settlement within the meaning of Section 2(p) read with sub-section (3) of
Section 18 of the Act undoubtedly binds the workmen but the question which
would arise is, would it mean that thereby the provisions contained in Sections
25-N and 25-0 are not required to be complied with? The answer to the said
question must be arrived at between the employer and workmen in case of
an industrial dispute. An industrial dispute may arise as regard the validity
of a retrenchment or a closure or otherwise. Such a settlement, however, as
regard retrenchment or closure can be arrived at provided such retrenchment
or closure has been effected in accordance with law. Requirements of issuance
of a notice in terms of Sections 25-N and 25-0, as the case may be, and/or a
decision thereupon by the appropriate government are clearly suggestive of
the fact that thereby a public policy has been laid down. The state government,
before granting or refusing such permission, is not only required to comply
with the principles of natural justice by giving an opportunity of hearing both
to the employer and the workmen but is also required to assign reasons in
support thereof and is also required to pass an order having regard to several
factors laid down therein. One of the factors besides others which is required
to be taken into consideration by the appropriate government before grant or
refusal of such permission is the interest of the workmen. The aforementioned
provisions being imperative in character would prevail over the right of the
parties to arrive at a settlement. Such a settlement must conform to the statutory
conditions laying down a public policy. A contract which may otherwise be
valid, however, must satisfy the tests of public policy not only in terms of
the aforementioned provisions but also in terms of Section 23 of the Indian
Contract Act.
The Court further held:

It is trite that having regard to the maxim 'exotropia causa non orator also', an
agreement which opposes public policy as laid down in terms of Sections 25-N
and 25-0 of the Act would be void and of no effect.
The aforesaid view was reiterated in Empire Industries v. State ofMaharashtra. However,
the aforesaid decision was not cited.

5. Recommendations of the (Second) National Commission on Labour

The Commission made the following recommendations:
(i) Prior permission is not necessary in respect of lay-off and retrenchment in an
establishment of any employment size. Workers will however, be entitled to two
522 • Industrial Relations and Labour Laws

month's notice or notice pay in lieu of notice, in case of retrenchment. We also feel that
the rate of retrenchment compensation should be higher in a running organization
than in an organization which is being closed. Again, we are of the view that the
scale of compensation may vary for sick units and profit-making units even in cases
of retrenchment. We would however, recommend that in the case of establishments
employing 300 or more workers where lay-off exceeds a period of one month, such
establishments should be required to obtain post facto approval of the appropriate
government. We recommend that the provisions of Chapter VB pertaining to permission
for closure should be made applicable to all establishments to protect the interests of
workers in establishments which are not covered at present by this provision if they
are employing 300 or more workers. Necessary changes in chapter VA in regard to
retrenchment and closure will have to be made accordingly. Every employer will have
to ensure, before a worker is retrenched or the establishment is closed, irrespective of
the employment size of the establishment, that all dues to the workers, be it arrears
of wages earned, compensation amount to be paid for retrenchment or closure as
indicated in the next paragraph, or any other amount due to the worker, are first settled
as a pre-condition of retrenchment or closure. These provisions will not bar industrial
disputes being raised against a lay-off or retrenchment or closure. Having regard to
the national debate on this issue and the principle outlined above, the Commission
would like to recommend the compensation per completed year of service at the rate
of 30 days on account of closure in case of a sick industry which has continuously
run into losses for the last 3 financial years or has filed an application for bankruptcy
or winding up, and other non-profit making bodies like charitable institutions, etc.,
and at the rate of 45 days for becoming viable. It would also recommend higher
retrenchment compensation at the rate of 60 days of wages and similarly a higher
rate of compensation for closure at the rate of 45 days of wages for every completed
year of service for profit making organizations. For establishments employing less
than 100 workers, half of the compensation mentioned above in terms of number of
days' wages may be prescribed. However, these establishments will also be required
to give similar notice as prescribed for bigger establishments before retrenching the
workers or closing down.
(iz) While the lay-off compensation could be 50 per cent of the wages as at present, in the
case of retrenchment, Chapter VA of the Act may be amended to provide for 60 days'
notice for both retrenchment and closure or pay in lieu thereof. The provision for
permission to close down an establishment employing 300 or more workmen should
be made a part of Chapter VA, and Chapter VB should be repealed. In case of closure
of such establishment which is employing 300 or more workers, the employer will
make an application for permission to the appropriate government 90 days before
the intended closure and also serve a copy of the same on the recognized negotiating
agent. If permission is not granted by the appropriate government within 90 days of
receipt of application, the permission will be deemed to have been granted.

K. Relief Available to Workmen Retrenched in Violation of Section 25F/25N:

Judicial Approach
A survey of decided cases reveals that the Supreme Court is divided over the above issue.
One view is that in case of violation of Section 25F /25N of IDA, retrenched workers would
be entitled to reinstatement but not necessarily with full back wages as a right. The other
 Lay-off, Retrenchment, Transfer and Closure • 523

view is that monetary compensation in lieu of reinstatement of workmen would subserve

the ends of justice. The judicial approach may broadly be examined as under.

1. Judicial approach prior to 2005 and 2010 (Two cases)

Prior to 2005, the Supreme Court, as observed earlier has repeatedly held that Sections 25F(a)
and (b) and 25N of the Industrial Disputes Act are mandatory and non-compliance thereof
renders the retrenchment of employees a nullity. If it is invalid, it cannot be said to have
terminated the relationship of employer and employees. In such a situation, workers are
entitled to reinstatement and full back wages. However, full back wages cannot be claimed
as a matter of right. They may be denied in exceptional situations.
In Delhi Cloth and General Mills Co. Ltd v. Shambhu Nath Mukherji 166, the Supreme Court
pointed out that any order of retrenchment in violation of these two pre-emptory conditions
as specified in Section 25F(a) and (b) is invalid. If it is invalid, then he is still in service. The
same view was taken in Workmen of Subong Tea Estate v. Management of Subong Tea Estate167.
Here, the Supreme Court pointed out that the retrenchment of the workmen being invalid in
law, it cannot be said to have terminated the relationship of employer and employee. Again,
in Common India Ltd v. Niranjan Das 168, the Supreme Court observed that retrenchment of
an employee without following the provisions of Section 25F would be void-ab-initio.
InAnoop Sharma v. Executive Engineer Public Health Division, Panipat169, the Supreme Court
without referring to cases cited in 2 below held that termination of service of an employee by
way of retrenchment without complying with the requirement of giving one month's notice
or pay in lieu thereof and compensation in terms of Section 25-F (a) and (b) has the effect
of rendering the action of the employer a nullity and the employee is entitled to continue
in employment as if his service was not terminated.
InHarjinder Singh v. Punjab State Warehousing Corporation 170, the Supreme Court while
granting reinstatement to workman for violating the provisions of Section 25F, 25G and
25H of the Industrial Disputes Acts observed:

Of late, there has been a visible shift in the courts' approach in dealing with
the cases involving the interpretation of social welfare legislations. The
attractive mantras of globalization and liberalization are fast becoming the
raison d'etre of the judicial process and an impression has been created that the
constitutional courts are no longer sympathetic towards the plight of industrial
and unorganized workers. In large number of cases like the present one, relief
has been denied to the employees falling in the category of workmen, who
are illegally retrenched from service by creating by-lanes and side-lanes in
the jurisprudence developed by this Court in three decades. The stock plea
raised by the public employer in such cases is that the initial employment/
engagement of the workman-employee was contrary to some or the other
statute or that reinstatement of the workman will put unbearable burden on
the financial health of the establishment. The courts have readily accepted

166 Delhi Cloth and General Mills Co. Ltd v. Shambhu Nath Mukheiji, (1978) 1 LLJ 1 (SC}.
167 Workmen of Subong Tea Estate v. Management of Subong Tea Estate, (1964} 1 LLJ 333 (SC}.
168 (1984) 1 sec so9.
169 2010 (4) SCALE 203.
170 (2010} 3 SSC 192.
5 24 • Industrial Relations and Labour Laws

such plea unmindful of the accountability of the wrong doer and indirectly
punished the tiny beneficiary of the wrong ignoring the fact that he may have
continued in the employment for years together and that micro wages earned
by him may be the only source of his livelihood.

It needs no emphasis that if a man is deprived of his livelihood, he is deprived

of all his fundamental and constitutional rights and for him the goal of social
and economic justice, equality of status and of opportunity; the freedoms
enshrined in the Constitution remain illusory. Therefore, the approach of
the courts must be compatible with the constitutional philosophy of which
the Directive Principles of State Policy constitute an integral part and justice
due to the workman should not be denied by entertaining the spurious and
untenable grounds put forward by the employer-public or private. (Para 23).

2. Judicial approach between 2005 and 2011 (Except two cases)

In UP State Brassware Corporation Ltd v. Uday Narain Pandey171 , the question arose whether
direction to pay back wages consequent upon a declaration that a workman has been
retrenched in violation of the provisions of Section 6N of the UP Industrial Disputes Act,
1947 (equivalent to Section 25F of the IDA) as a rule was proper exercise of discretion. The
Supreme Court observed as follows:

A person is not entitled to get something only because it would be lawful to

do so. If that principle is applied, the functions of an industrial court shall
lose much of their significance. The changes brought about by the subsequent
decisions of this Court, probably having regard to the changes in the policy
decisions of the government in the wake of prevailing market economy,
globalization, privatization and outsourcing, is evident.
The Court therefore, emphasized that while granting relief, application of mind on
the part of the industrial court is imperative. Payment of full back wages, therefore, cannot
be the natural consequence.
Again, in Uttaranchal Forest Development Corporation v. MC Joshi 172, the Supreme Court
held that relief of reinstatement with full back wages was not being granted automatically
only because it would be lawful to do so and several factors have to be considered, few of
them being as to whether appoinbnent of the workman had been made in terms of statutes/
rules and the delay in raising industrial dispute. The Supreme Court therefore, granted
compensation instead of reinstatement although there was violation on Section 6N of the
UP Industrial Disputes Act, 1947 (equivalent to Section 25F) of the IDA.
In State of MP v. Lalit Kumar Verma 173 , the Supreme Court substituted the award of
reinstatement by compensation. In yet another decision inMP Administration v. Tribhuwan 174,
the management had retrenched the workman in violation of Section 25F; the industrial court

171 (2006) 1 SSC 479: AIR 2005 sew 6314.

172 (2007) 9 sec 353.
173 (2007) 1 sec 2007.
174 (2007) 9 SSC 748.
 Lay-off, Retrenchment, Transfer and Closure • 5 25

directed only compensation to the respondent. The High Court ordered the reinstatement
of the workman with full back wages.
On appeal, the Supreme Court held that keeping in view the peculiar facts and
circumstances of this case and particularly in view of the fact that the High Court had
directed reinstatement with full back-wages, the interest of justice would be served if
the appellant herein be directed to pay a sum of t75,000 by way of compensation to the
respondent.
Again in Sita Ram v. Moti Lal Nehru Farmers Training institute175, the Supreme
Court considered the question as to whether the labour court was justified in awarding
reinstatement of the appellants therein and held that keeping in view the period during
which the services were rendered by the respondent (sic appellants); the fact that the
respondent had stopped its operation of bee farming, and the services of the appellants
were terminated in December 1996, it is not a fit case where the appellants could have been
directed to be reinstated in service. Instead, payment of a sum of tl,00,000 to each of the
appellants would meet the ends of justice.
In Ghaziabad Development Authoirty v. Ashok Kumar 176, the Supreme Court again
considered the question whether the labour court was justified in awarding the relief of
reinstatement with full back wages in favour of the workman. In this case, the first respondent
was appointed on daily wages. He worked for a little more than two years. The sanction
of the state of U.P was necessary for creation of posts but this post was not sanctioned
after 31 March 1990 by the state. The management therefore, terminated his service. But
the labour court directed reinstatement of the first respondent in service. On appeal the
Supreme Court ruled:

A statutory authority is obligated to make recruibnents only upon compliance

with the equality clause contained in Articles 14 and 16 of the Constitution of
India. Any appoinbnent in violation of the said constitutional scheme as also the
statutory recruibnent rules, if any, would be void. These facts were required to
be kept in mind by the labour court before passing an award of reinstatement.
Furthermore, public interest would not be subserved if after such a long lapse
of time, the first respondent is directed to be reinstated in service.
The Court therefore, held that the appellant should be directed to pay compensation
to the first respondent instead and in place of relief of reinstatement in service. Keeping in
view the fact that the respondent worked for about six years as also the amount of daily
wages which he had been getting, that the interest of justice would be subserved if the
appellant is directed to pay a sum of tS0,000 to the first respondent.
In Mahboob Deepak v. Nagar Panchayat, Gajraula 177, it was observed:

Such termination of service, having regard to the fact that he had completed 240
days of work during a period of 12 months preceding the said date, required
compliance with provisions of Section 6-N of the U.P. Industrial Disputes Act.
An order of retrenchment passed in violation of the said provision although

175 (2008) 5 SSC 75

176 (2008) 4 SSC 261.
177 (2008) 1 SSC 575.
5 26 • Industrial Relations and Labour Laws

can be set aside but as has been noticed by this Court in a large number of
decisions, an award of reinstatement should not, however, be automatically
passed.
The factors which are relevant for determining the same, inter alia, are;
(i) whether in making the appoinbnent, the statutory rules, if any, had been complied
with;
(ii) the period he had worked;
(iii) whether there existed any vacancy; and
(iv) whether he obtained some other employment on the date of termination or passing
of the award.

The respondent is a local authority. The terms and conditions of employment

of the employees are governed by a statue and statuary rules. No appoinbnent
can be made by a local authority without following the provision of the
recruibnent rules. Any appoinbnent made in violation of the said rules as also
the constitutional scheme of equality as contained in Articles 14 and 16 of the
Constitution of India would be a nullity.
Due to some exigency of work, although recruibnent on daily wages or on an
ad hoe basis was permissible, but by reason thereof an employee cannot claim
any right to be permanently absorbed in service or made permanent in absence
of any statue or statutory rules. Merely because an employee has completed
240 days of work in a year preceding the date of retrenchment, the same would
not mean that his services were liable to be regularized.
Applying the aforesaid legal principles, the court held that the relief granted in favour
of the appellant by the labour court is wholly unsustainable. Dealing the decision of the
High Court, the Court said that it did not consider the effect of non-compliance with the
provisions of Section 6N of the U.P. Industrial Disputes Act, 1947. In view of this, the Court
held that the appellant was entitled to compensation, notice and notice pay.
In Jagbir Singh v. Haryana State Agriculture Marketing Board178, the appellant was engaged
as a daily wager by the Haryana State Agriculture Marketing Board on 1 September 1995.
He worked with Respondent No. 1 upto 18 July 1996. Thereafter, his services came to an
end. During his employment, the appellant was paid consolidate wages offl,498 per month.
The appellant raised the industrial dispute contending that he was retrenched illegally in
violation of Section 25F ofID Act, 1947. He therefore claimed reinstatement with continuity of
service and full back-wages. The industrial tribunal-cum-labour court held that the appellant
had worked for more than 240 days in the year preceding the date of termination and that
the board violated the provisions of Section 25F of the Act, 1947 by not giving him notice,
pay in lieu of notice and retrenchment compensation before his termination. The appellant
was entitled to reinstatement with continuity of service and full back-wages from the date
of demand notice, i.e. 27 January 1997. Thereupon the board challenged the award before
the High Court of Punjab and Haryana. The High Court held that even if the appellant had
completed 240 days of service in a calender year, he was neither entitled to be reinstated nor
could he be granted back-wages. The High Court set aside the award holding that it was

178 2009 LLR 1254.

 Lay-off, Retrenchment, Transfer and Closure • 527

not sustainable in law. The daily wager filed an appeal by special leave before the Supreme
Court against this order.
The question arose whether the High Court, in a case such as this where termination
of appellant was in contravention of Section 25 F, was justified in upsetting the award of
the labour court whereby the first respondent was directed to reinstate the appellant with
continuity of service and full back wages. Justice Lodha, Speaking for the Court, referred
to a series of decided cases referred above and observed:

It would be, thus, seen that by catena of decisions in recent times, this Court
has clearly laid down that an order of retrenchment passed in violation of
Section 25F although may be set aside but an award of reinstatement should
not, however, be automatically passed. The award of reinstatement with full
back wages in a case where the workman has completed 240 days of work in a
year preceding the date of termination, particularly, daily wagers has not been
found to be proper by this Court and instead compensation has been awarded.
This Court has distinguished between a daily wager who does not hold a post
and a permanent employee. Therefore, the view of the High Court that the
labour court erred in granting reinstatement and back wages in the facts and
circumstances of the present case cannot be said to suffer from any legal flaw.
However, in our view, the High Court erred in not awarding compensation
to the appellant while upsetting the award of reinstatement and back wages.
As a matter of fact, in all the judgments of this Court referred to and relied
upon by the High Court while upsetting the award of reinstatement and back
wages, this Court has awarded compensation.
He laid down the following factors inter alia to be taken into account. While awarding
compensation, a host of factors, inter-alia, (i) manner and method of appoinbnent, (ii) nature
of employment and (iii) length of service are relevant. He however added that each case
will depend upon its own facts and circumstances.
He held that in a case such as this where the total length of service rendered by the
appellant was short and intermittent from 1 September 1995 to 1 July 1996 and that he was
engaged as a daily wager, a compensation oH'50,000 /- to the appellant by respondent No. I
will meet the ends of justice.
The aforesaid view was re-stated by Justice Lodha in Incharge Officer v. Shankar shetty179•
A question arose whether an order of reinstatement will automatically follow in case where
engagement of daily wager has been brought to an end in violation of section 25 of the IDA
Lodha J. Speaking for the Supreme court observed.
It would be, thus, seen that in a catena of cases the Supreme Court has clearly laid down
that an order of retrenchment passed in violation of Section 25-F although may be set aside
but an award of reinstatement should not, however, be automatically passed. The award of
reinstatement with full back wages in a case where the workman has completed 240 days of
work in a year preceeding the date of termination, particularly, daily wagers has not been
found to be proper by this Court and instead compensation has been awarded. This Court has
distinguished between a daily wager who does not hold a post and a permanent employee.

179 2010 (8) SCALE 583.

528 • Industrial Relations and Labour Laws

In Bharat Sanchar Nigam v. Man Singh, 180 the Supreme Court observed that in a catena
of cases, it had clearly laid down that although an order of retrenchment passed in violation
of Section 25F of the Industrial Disputes Act may be set aisde but an award of reinstatement
should not be passed. This Court also distinguished between a daily wager who does not
hold a post and a permanent employee.

3. An Appraisal
It is difficult to support the manner in which the shift in judicial approach took place
from the first to the second phase. An analysis of decided cases reveals that the judicial
decisions during the second period were influenced mainly by two factors, namely (i) the
policy decision of the government in the wake of prevailing market ecomony, globalization
privatization and outsourcing 181 (ii) by realizing that' an industry may not be compelled to
pay the workman for the period during which he apparently contributed little or nothing at
all to it and/ or for a period that was spent unproductively as a result whereof the employer
would be compelled to go back to a situation which prevailed many years ago, when the
workman was retrenched' .182
Quite apart from above, the Court misread its earlier decision wherein it was
said that on 'termination being declared illegal, payment of full back wages cannot be
granted mechanically along with reinstatement183 • However, the Court interpreted this as
reinstatement with full back wages cannot be granted automatically only because it would
be lawful to do so'. Instead the Court awarded compensation in lieu of reinstatement.
The Supreme Court in two cases of 2010 referred to in the first period has tried to
adopt the judicial approach appearing in the pre-2005 period. However, the courts have
not only failed to examine the decisions of the second period but have not even referred to
the decisions given by the other bench even during 2009-10. This approach, it is submitted,
sent a wrong message to lawyers, law teachers and students. This does not, however, mean
the judicial decisions are not sound.
Whatever may be the explanation for this shift in approach, there is still uncertainty
about the prevailing law on the subject. It is high time to set up a constitution bench to settle
the law on the above issue.

L. Procedure for Retrenchment

Section 25 G of the Industrial Disputes Act, 1947 lays down the procedure for retrenchment:

Where any workman in an industrial establishment, who is a citizen of India,

is to be retrenched and he belongs to a particular category of workmen in that
establishment, in the absence of any agreement between the employer and the
workman in this behalf, the employer shall ordinarily retrench the workman
who was the last person to be employed in that category, unless for reasons
to be recorded the employer retrenches any other workman.

180 2011 (12) SCALE 327.

181 UP State Brassware Corporation Ltd v. Udai Narain Pandey, (2006) 1 SCC 179.
182 PK V Distillery Ltd V. Mahendra Ram (2009) 5 sec 705.
183 M/s Reetu Marble v. Prabhakaran Shukla, (2010) 2 SCC 70.
 Lay-off, Retrenchment, Transfer and Closure • 529

Applicability of the Scheme in Industrial Establishment

The Supreme Court in Indian Cable Co. Ltd v. Its Workmen 184, affirmed the decision of
Calcutta High Court in Pravat Kumar Kar v. WT C Parker 185 and held that it was the essence
of the concept of an industrial establishment that it is local in its set up. The Supreme Court
further examined the decision of the Madras High Court in India Tyre and Rubber Company
v. Their Workmen 186 and affirmed the view that ifan industry had establishments located in
different places, each of them would be a separate industrial establishment under Section
25-G of the Act. The Supreme Court also observed in the aforesaid case:

Then again, on the terms of Section 25-G the relief provided therein is to be
granted within the category of workmen who are proposed to be discharged ....
If there are different branches at different places and there are different
scales of wages, the rule laid down in Section 25-G would be incapable of
compliance unless all the branches have one scale of wages and the rules provide for
automatic transfer from place to place having regard to the seniority and grades.
Thus, whether we have regard to the popular sense of the word 'industrial
establishment' or to the limitation of relief under Section 25-G to workmen in
the same category, the conclusion would appear to be inescapable that each
branch of a company would normally be regarded as a distinct industrial
establishment. (emphasis added)
In the Court's view two things must co-exist in order to enable an employer to
distribute workmen to its different establishments and avoid retrenchments namely, (i)
automatic transfer under conditions of service, and (ii) same scale of wages in the different
establishments.
The ordinary rule of retrenchment is 'first come, last go' and where other things are
equal, this rule has to be followed by the employer in effecting retrenchment. 187 But this rule
should be applied in the interest of business. The industrial tribunal will not interfere with
the decision of the management, unless preferential treabnent is actuated by mala fides 188 •••
Whether the management has acted mala fide or not depends upon the circumstances of the
case; it cannot be inferred merely from departure from the rule. Where those retrenched
and those retained are doing substantially the same kind of work and no special skill or
aptitude is required for doing the work which the retained clerk is doing, preference given
to the retained clerk on the ground that he has some experience in the branch may justifiably
raise an inference of mala fide. 189
1. The Rule of Last Come, First Go. The judicial policy to protect the interest of retrenched
workers by allowing departure from the principle of 'last come first go' only on
'valid and justifiable reason' to be proved by the management is evident from the
decision of the Supreme Court in Workmen ofSudder Workshop of Jorhaut Tea Co. Ltdv.
Management. 190 In this case, the management retrenched 23 workmen. Out of these,

184 Indian Cable Co. Ltd v. Its Workmen, (1962) 1 LLI 409.
185 Pravat Kumar Kar v. WTC Parker, (1949) 1 FJR 245.
186 Indian Tyre and Rubber Co. v. Their Workmen (1957) 2 LLJ 506.
187 Om Oilseeds Exchange Ltd v. Their Workmen, AIR 1966 SC 1657, 1959.
188 AIR 1966 SC 1657 at 1660.
189Ibid.
190 Workmen of Sudder Workshop ofJorhaut Tea Co. v. Management, (1980) Lab. lC 742 (SC).
530 • Industrial Relations and Labour Laws

the services of seven workmen were terminated without following the rule of 'last come
first go' under Section 25-G. The tribunal, therefore, set aside the management's order
of termination of the seven workmen and directed their reinstatement with some back
wages. The Supreme Court, on appeal, confirmed the findings of the tribunal and ruled:

The rule is that the employer shall retrench the workman who came last,
popularly known as 'last come first go'. Of course, it is not an inflexible rule
and extraordinary situations may justify variations. For instance, a junior recruit
who has a special qualification needed by the employer may be retained even
though another who is one up is retrenched. There must be a valid reason for
this deviation, and obviously, the burden is on the management to substantiate
the special ground for departure from the rule.
It added:

There is none made out here, nor even alleged, except the only plea that the
retrenchment was done in compliance with Section 25-G gradewise. Absence of
mala fide by itself is no absolution from the rule in Section 25-G. Affirmatively,
some valid and justifiable grounds must be proved by the management to be
exonerated from the 'last come, first go' principle. 191
The Court held that' grading for purposes of scales of pay and like considerations will
not create new categorization.'
Nothing shows more forcefully than the following observations made in the aforesaid
judgement when the Supreme Court deprecated the tendency of the management:

[W]ho gambles in litigation to put off the evil day and when that day arrives
prays to be saved front his own gamble. The award had given convincing reasons
for reinstatement and even reduced the back wages to half, still, the workmen
were dragged to the High Court and, worse, when worsted there, were driven
from Assam to Delhi to defend their pittance. The logistics of litigation for
indigent workmen is a burden the management tried to use by a covert blackmail
through the judicial process. Misplaced sympathy is mirage justice, we cannot
agree. Even so, we take note of the inordinate delay due to long pendency which
is part of the pathology of processual justice in the Supreme Court. 192
The Court, therefore, directed that half the back wages between the date of retrenchment
and the publication of the award shall be paid, as directed in the award itself. For the post
award period, the Court held that full wages will be paid until the High Court's judgement
on 13 April 1971 and therefore, 75 per cent of wages will be paid until 30 April 1981. This
decision is an eye opener to the management which indulges in unnecessary litigation to
harass workers.
In Suraj Prakash Bhandari v. Union of India 193, the management tried to evade the
provisions of Section 25-G. In this case, a workman was appointed as welder in 1950 in
the Central Tractor Organization in the pay scale of t125-185. He served on this post for

191 Id.at 743-44.

192 (1980) Lab. IC 742 at 744-45.
193 Suraj Prakash Bhandari v. Union of India, (1986) Lab lC 671 (SC).
 Lay-off, Retrenchment, Transfer and Closure • 5 3 1

9 years. In 1959, he was transferred to another place. On 30 October 1971 by an order dated
14 October 1971, he was re-designated as senior welder in the pay scale of f170-6-240.
On 1 January 1973, he was declared surplus but was offered re-employment by Jullundur
Cantonment. The workman refused the offer. He challenged the termination of his service
on the ground that it was illegal retrenchment and the offer of re-employment amounted to
demotion. The trial court decreed the suit with cost and directed the management to appoint
the workman in the grade oH175-6-205-7-240. The additional district judge dismissed the
appeal. The High Court allowed the appeal. On appeal, the Supreme Court held that 'if this
action could be justified, then it would arm the employers with new weapons to promote
an employee after creating a new post, abolish it after some time and relieve him of this
duties on the plea of surplusage.' The Court added that the easiest course for a reasonable
management to adopt in such cases would have been to revert the employee to the place
where from he was promoted and give him the emoluments which he was drawing before
such promotion.
2. Period of service
In Harjinder Singh v. Punjab State Warehousing Corpn 194, the Supreme Court held that it is
settled law that for attracting the applicability of Section 25-G of the Act, the workman is not
required to prove that he had worked for a period of 240 days during 12 calendar months
preceding the termination of his service and it is sufficient for him to plead and prove that
while effecting retrenchment, the employer violated the rule of 'last come first go' without
any tangible reason.
Departure from the Rule: Last Come, First Go. The normal rule, it has been observed
earlier, is that the employer should adopt the principle of 'last come, first go' in effecting
retrenchment. However, for departing from the rule, which would normally apply only when
other things are equal; the employer; for the purpose of arriving at the specific reasons to be
recorded, may take into account consideration of efficiency and trustworthy character of the
employees, and that if he is satisfied that a person with long service is inefficient, unreliable
or habitually irregular in the discharge of his duties, it would be open to him to retrench him
while retaining in his employment, employees who are more efficient, reliable and regular,
though they may be juniors in service to the retrenched workman. Normally, where the rule
is thus departed from, there should be reliable evidence preferably in the recorded history
of the workman showing his inefficiency, unreliability or habitual irregularity. 195 From the
above, it is evident' that wherever it is proved that rule in question has been departed from,
the employer must satisfy the industrial tribunal that the departure was justified; and in
that sense the burden would undoubtedly be on the employer .... The employer should be
able to justify the departure before the industrial tribunal whenever an industrial dispute
is raised by retrenched workmen on the ground that the retrenchment amounts to unfair
labour practice or victimization. 196 In each case of deviation from the principle 'last come
first go', the employer has to write down the reason in his order itself. The reason cannot
be improved later on. 197

194 (2010)3 sec 192.

195 Swadeshmitran v. Their Workman, (1960) 1 LLJ 504 at 507.
196 Tamil Nadu Transport v. Mariappan, (1970) 1 LLJ 90 at 92 (Mad.).
197M/s Glodstone Lyall & Co. Ltd v. State of West Bengal, (1983) Lab. 1 C 1425 (Cal.).
5 3 2 • Industrial Relations and Labour Laws

Recently in Harjinder Singh v. State of Punjab 198, the Supreme Court held that it is
permissible for the employee to deviate from the rule in cases of lack of efficiency or loss
of confidence, etc., But the burden will then be on the employer to justify the deviation.
3. Distinction between the Effect of Non-compliance of Sections 25-F and 25-G. In
Central Bank of India v. S Satyam 199, the Supreme Court observed that while Section
25-F is confined only to the mode of retrenchment of workmen in continuous service
for not less than one year, Section 25-G prescribes the principle for retrenchment and applies
ordinarily the principle of'last come first go' which is not confined only to workmen who have
been in continuous service for not less than one year, covered by Section 25-F.
(emphasis supplied)
The ratio of the above noted judgement was reiterated in Samishta Dube v. City Board
Etawah200• In this case, the Court interpreted Section 6-P of the UP Industrial Disputes Act,
1947, which is pari materia to Section 25-G of the Act, and held:

Now this provision is not controlled by conditions as to length of service

contained in Section 6-N (which corresponds to Section 25-F of the Industrial
Disputes Act, 1947). Section 6-P does not require any particular period of
continuous service as required by Section 6-N.
The distinction between Sections 25-F and 25-G of the Act was reiterated in Bhopgur Coop.
Sugar Mills Ltd v. Harmesh Kumar 201 , in the following words:

We are not oblivious of the distinction in regard to the legality of the order of
termination in a case where Section 25-F of the Act applies on the one hand,
and a situation where Section 25-G thereof applies on the other. Whereas in
a case where Section 25-F of the Act applies, the workman is bound to prove
that he had been in continuous service of 240 days during 12 months preceding
the order of termination; in a case where he invokes the provisions of Sections
25-G and 25-H thereof, he may not have to establish the said fact.

M. Re-employment of Retrenched Workmen

Section 25-H which provides for re-employment of retrenched workmen in preference
to newcomers prescribes several conditions viz., (z) The workman is 'retrenched' within
the meaning of Section 2 (oo) of the Industrial Disputes Act before re-employment; (ii)
the workman should be a citizen of India; (iii) the workman should offer himself for re-
employment in response to the notice by the management; (iv) the workman should be from
the same category in which the employment is proposed.
The concluding words of Section 25-H, namely, 'the retrenched workmen who
offer themselves for re-employment shall have preference over other persons', must be
deemed to include preference over persons in the lower cadre who are for the time being
in the employment of the employer. Rule 78 of the Industrial Disputes (Central) Rules

198 (2010) 3 sec 192.

199 (1996) 5 sec 419.
200 (1999) 3 sec 14.
201 (2006) 13 sec 2s.
 Lay-off, Retrenchment, Transfer and Closure • 5 3 3

lays down the procedure for re-employment of retrenched workmen and requires the
employer to display the vacancies on a notice board at least 10 days before the date on
which the vacancies are to be filled and also to give notice by l?iost to these vacancies to
all the retrenched workmen eligible to be considered therefor. 2 Further, the retrenched
workmen must be given an opportunity for employment when the employer has to employ
an additional hand. 203 This principle is based not only on Section 25-H but also on fair play
and justice.
The Supreme Court in Rai Sahib Ramdayal Ghasiram Oil Mills and Partnership Firm v.
Labour Appellate Tribunals 204 held that Section 25-H provides for re-employment of retrenched
workmen in certain circumstances in preference to newcomers. But the provisions of Section
25-H cannot apply to workmen who had been retrenched before this provision came into
force. The legislature did not intend the provision to come into force before 25 October 1953.
When that is the mandate of the legislature, no tribunal has jurisdiction on the basis of its
own conception of social justice to ignore 'if any' to apply the provisions or its underlying
'principle' to a dispute which arose before the provision came into force.
The Supreme Court in G S Ramaswamy v. The Inspector General of Police, Mysore,2 05 held
that the usual principle is that the juniormost persons among those officiating in clear or
long time vacancies are generally reverted to make room for the senior officers coming back
from deputation or from leave, etc. Further, ordinarily as promotion on officiating basis
is generally according to seniority, subject to fitness for promotion, the juniormost person
reverted is usually the person promoted last. This state of affairs prevails ordinarily unless
there are extraordinary circumstances.
The aforesaid view was reiterated in State of Uttar Pradesh v. Kaushal Kishore Shukla. 206
The Supreme Court held that if out of several employees working in a department, a senior
is found unsuitable on account of his work and conduct, it is open to the competent authority
to terminate his services and retain the services of a junior who may be found suitable for
the service.
In Central Bank of India v. S Satyam 207, the Supreme Court held that Chapter VA of the
Act providing for retrenchment is not enacted only for the benefit of the workmen to whom
Section 25-F applies but for all cases of retrenchment and, therefore, there is no reason to
restrict application of Section 25-H therein only to one category of retrenched workmen.
Therefore, restricted meaning cannot be given to the word 'retrenchment' in Section 25-H.
The Court ruled that Section 25-H is couched in broad language and is capable of application
to all retrenched workmen, not merely those covered by Section 25-F. It does not require
curtailment of the ordinary meaning of the word 'retrenchment' used therein. The provision
for re-employment of retrenched workmen merely gives preference to a retrenched workman
in the matter of re-employment over other workmen and there is no reason to restrict its
ordinary meaning which promotes the object of the 'enactment without causing any prejudice
to a better placed retrenched workman.'

202 Nuller and Phippa (India) v. Their Employers' Union, (1967} 2 LLJ 222.
203 cawnpore Tannery Ltd v. S Gupta, (1961) 2 LLJ 110 (SC).
204 (1963) 2 LLJ 65.
205 AIR 1966 SC 175.
206 1991 (1) JT 109.
207 AIR 1996 SC 2526.
534 • Industrial Relations and Labour Laws

The aforesaid view was reiterated in Harjinder Singh v. State of Punjab208 •

Retrospective Operation of Section 25-H

There is also a controversy regarding the retrospective operation of Section 25-H. In Cownpur
Tannery Ltd Kanpur v. Guha(s)2°9, it was contended on behalf of the managementthat it was
erroneous and unfair for the tribunal to have virtually given effect to the said provision
retrospectively. The Supreme Court rejected the argument and observed:

Even before Section 25-H was added to the Act, industrial adjudication
generally recognized the principle that if an employer retrenched the services of
an employee on the ground that the employee in question had become surplus,
it was necessary that whenever the employer had occasion to employ another
hand, the retrenched workman should be given an opportunity to join service.
This principle was regarded as of general application in industrial adjudication
on the ground that it was based on considerations of fair play and justice.
In sharp contrast to Rai Sahib Ramdayal Ghasiram Oil Mills and Partnership Firm v.
Labour Appellate Tribunal 210, the Supreme Court held that 'Section 25-H provides for re-
employment of retrenched workmen in certain circumstances in preference to newcomers.
But Act 43 of 1953 which enacted this provision clearly provides in sub-section (2) of
Section 25-J thereof that it shall be deemed to have come into force on 24 October 1953.
Clearly, therefore, the provisions of this Section cannot apply to workmen who had
been retrenched before this provision came into force. The legislature did not intend
the provision to come into force before 24 October 1953. When that is the mandate of
the legislature, no tribunal has jurisdiction on the basis of its own conception of social
justice to ignore it and apply the provisions or principle to a dispute which arose before
the provisions came into force.'

Terms and Conditions of Re-employment

Section 25-H is silent about the terms and conditions on which re-employment has to be
offered by the employer. In Indian Hume Pipe Co. Ltd v. Labour Court, Andhra Pradesh211 , the
Andhra Pradesh High Court held:

We are inclined to the view that the retrenched workmen are entitled to claim
the same employments as at time of retrenchment and that the employer is
not at liberty to change the wage structure at his will.
In another case involving the same employer, Indian Hume Pipe Co. Ltd v. Bhimarar
Bali ram Gandhi212, the Bombay High Court dissented with the above view.

208 (2010) 3 sec 192.

209 (1961) 2 LLJ 110 at 112.
210 (1963) 2 LLJ 65 at 68; AIR 1964 SC 567; 24 FJR 266.
211 (1993) 1 LLJ 770 at 774; AIR 1964 AP 56; 24 FJR 333.
212 (1993) 2 LLJ 402 (B), dissenting from (1963) 1 LLJ 770 (AP).
 Lay-off, Retrenchment, Transfer and Closure • 535

Penalty for Lay-off and Retrenchment without Previous Permission

Section 25-Q prescribes penalty upon an employer who contravenes the provisions of Section
25-M or 25-N. This penalty shall extend to imprisonment for a term which may extend to
one month, or with fine which may extend to fl,000/- or with both.

Notwithstanding the resistance of Indian workmen to the closure or transfer of undertaking,

it is important to emphasize that workmen are concerned, not with the closure or transfer as
such, but with consequence of closure or transfer, namely, discharge, unemployment and
loss of earning. It is doubtful if an employer continues to retain workmen in his employment
and pay the remuneration even after closing his business, there would be a hue and cry
over the closure or transfer. In every single case where bona fides of closure or transfer have
been challenged or an attempt has been made to convert a closure either into a lockout or
retrenchment, the basic demand has been for the reinstatement and payment of compensation
for the period of unemployment. The desire of workmen to continue in employment and
maintain their earnings is understandable in a surplus labour market which exists in India.
Prior to 1953, the only provision of the Act, which in those days used the word 'closure'
was Section 2 (1) of the IDA, invariably led tribunals to hold that closure came within the
ambit of the definition of 'lockout', particularly because unlike the 1929-definition, the
1947-definition had no restrictive qualifying clause. The labour appellate tribunals,2 13 the
high courts214 and the Supreme Court2 15 on the other hand, (impressed by the Constitutional
guarantee of the right to carry on any trade, profession, business or a vocation) were at
pains to emphasize that lockout was the 'closing of a place of employment' and not 'the
closing of the business itself.' Realizing the difficulty of maintaining this distinction in
cases of temporary closures, and even independently of such difficulty, there developed a
marked tendency to enquire into the reasons for the closure, and decision-makers entered
into detailed investigation of the bona fides of management action.
It will be observed that the 1953-Amending Act provided for lay-off compensation in
all cases where an employer was unable to provide work to a workman whose name was
on the muster-roll and for retrenchment compensation in cases where, subject to certain
specified exceptions, he terminated their services.
The legislature intended to interpret the definition of retrenchment at its widest
possible amplitude. But the Supreme Court in Barsi Light Railway Company v. Joglekar 216
severally curtailed the scope and coverage of the statutory compensation of 'retrenchment'
by holding that:

213 See for instance,Annamalai Timber Trust, (1952) 2 LLJ 604 (LAT}; Samalkot Tile Factory, (1951) 2 LLJ
509 (LAT}.
214 See for instance, Indian Metal and Metallurgical Corporation, (1952) 1 LLJ 364 (Mad.); Jaya Bharat Tile

Works, (1954) 1 LLJ 286 (Mad.}; Maharaj Kishengarh Mills Ltd, (1953) 2 LLJ 214 (Raj.}.
215 See for instance, Express Newspapers Ltd, (1962} 2 LLJ 22 (SC}.
216 Barsi Light Railway Co. v. Joglekar, (1957) 1 LLJ 243 (SC}.
536 • Industrial Relations and Labour Laws

Retrenchment as defined in Section 2 (oo) and as used in Section 25-F has

no wider meaning than the ordinary accepted connotation of the word: it
means the discharge of surplus labour or staff by the employer for any reason
whatsoever, otherwise than as a punishment inflicted by way of disciplinary
action, and has no application where the service of all workmen have been
terminated by the employer on a real and bona fide closure of business ....
The Court accordingly held that termination of service as a result of transfer of
ownership of an undertaking to another employer did not constitute 'retrenchment'. Sections
25-FF and 25-FFF were, therefore, enacted by the Parliament in 1956 and 1957 respectively
to plug the loopholes in provisions relating to retrenchment and, in particular, to provide
for payment of compensation to workmen on transfer and closure of an undertaking. These
benefits further widen the scope of unemployment benefits.
The requirement of notice period was felt inadequate in case of closing down the
undertaking. Section 25-FFA was, therefore, inserted requiring for 2 month's notice to be
given by the employer to the government about its intention to close down the undertaking.
Though this provision provided for the notice, it did not contain any provision for
prevention of lay-off, retrenchment or closure. Further, the Act did not provide for any
prior scrutiny of the reasons of such closure. In order to meet the situation, Chapter V-B
was inserted in the Industrial Disputes (Amendment) Act, 1976 and later amended in 1982
by the Industrial Disputes (Amendment) Act, 1982. This chapter which was applicable to
industrial establishments which were factories, mines, and plantations employing 300 or
more workmen has now been extended to 'industrial establishments' employing 100 or more
workmen. Section 25-0 added a new provision for preventing closure. A new provision
has also been made under Section 25-P for restarting undertakings closed down before
commencement of the Industrial Disputes (Amendment) Act, 1976. The penal provision for
violation of the provision relating to closure has been made under Section 25-R.

A. Transfer Compensation
Section 25-FF provides that where the ownership or management of an undertaking is
transferred, whether by agreement or by operation of law, from the employer in relation
to that undertaking to a new employer, every workman who satisfies the test prescribed
in that Section shall be entitled to notice and compensation in accordance with Section 25-
FF. However, the provision will not be applicable where, as a result of the transfer, three
conditions are satisfied, namely, (a) the services of the workmen have not been interrupted,
(b) the terms and conditions of service under the new employer are not less favourable than
what they were before the transfer, and (c) the transferee binds himself under the terms
of the transfer to pay to the workmen, in the event of future retrenchment, compensation
on the basis that there had been continuous service and had not been interrupted by such
transfer217• It may be noted that all the three conditions are used conjunctively. The employer
cannot escape from his liability by providing any one of these conditions.
The working of Section 25-FF in actual practice and as judicially construed gave rise
to several problems. Important among them is whether the workman is entitled to double
benefit such as payment of compensation by vendor company and re-employment by
vendee? Confusion exists due to conflicting decisions of the Supreme Court in this regard.

217 RS Madho Ram Sons (Agencies) Pvt. Ltd v. Its Workmen, (1964) 1 LLJ 366 (SC).
 Lay-off, Retrenchment, Transfer and Closure • 5 3 7

The effect of the first decision, as we shall see presently, is that the workmen are entitled to
double benefit. But according to the second decision, workmen are not allowed the double
benefit.
In Workmen of Subong Tea Estate v. Subong Tea Estate,218 Suborg Tea Estate (vendor)
agreed to sell the tea estate to Hindustan Tea Company (vendee) on 12 January 1959. It
was also agreed upon by the parties that transfer would take effect from 1 January 1959.
This agreement was subject to the approval of the Reserve Bank of India and pending the
execution of deed for the approval of the Reserve Bank of India, the vendee took the de facto
possession of the estate on 17 February 1959 but workers employed therein were allowed to
work and receive their wages from it. The permission of the Reserve Bank was received on
15 July 1959. Before the execution of the sale deed, the vendor company received a letter from
vendee to retrench certain surplus staff. The manager of the vendor company accordingly
served a notice on eight workmen intimating that their services would be terminated from
18 October 1959, after paying them retrenchment compensation prescribed under Section
25-F. The concerned workmen received the compensation under protest. They challenged
the validity of the retrenchment. On these facts, the Supreme Court held that the vendor
was nobody to retrench and as such the order of retrenchment was invalid. The Court also
directed reinstatement of the retrenched workmen with wages. The net result of the decision
has been to grant double benefit of compensation and reinstatement.
In Board of Directors of South Arcot Electricity Distribution Co. Ltd v. Elumalai219, the
South Arcot Electricity Undertaking was taken over by the State. The conditions of service
under the state government were less favourable than those with the erstwhile electricity
undertaking. The workmen demanded compensation from the electricity undertaking. The
company refused. On these facts, the Supreme Court held that the proviso to Section 25-FF
cannot be invoked by the company for the purposes of defeating the claim of workmen
under the principal clause of Section 25-FF.
In Gursham Thappa v. Abdul Khuddus,220 a government undertaking was taken over by
the company as a going concern. The workmen employed in the government undertaking
were also taken over by the company. The Supreme Court held that since in law the
company was a separate and distinct entity from the government, the employees as a result
of transfer of undertaking became workmen of the company and ceased to be workmen of
the government undertaking.
In Bhola Nath Mukherjee v. Govt. of West Bengal221 , the Supreme Court held that where
there is no legal obligation cast upon the board under the terms of the transfer or otherwise to
pay any retrenchment compensation to the workmen, the employees have no right to claim
any compensation from the board. Nor do they have any right to claim to be in continuous
employment on the same terms and conditions, even after the purchase of the undertaking by
the board. The Supreme Court held that the High Court in appeal was right in holding that
the employees were entitled to retrenchment compensation under the provision of Section
25-FF. But it was in error in holding that the board even after payment of the purchase price
to the transferor company, was liable to pay retrenchment compensation to the employees.

218 (1964) 1 LLJ 333 (SC).

219 (1970) 2 SCJ 118.
220 AIR 1969 SC 744.
221 (1997) 1 sec 562.
538 • Industrial Relations and Labour Laws

InAnakpalia Cooperative Agricultural and Industrial Society Ltd v. Its Workmen 222, a sugar
and refinery company which was running at a loss was purchased by a cooperative society.
Like the previous case, the vendor company paid to its employees statutory compensation
and terminated their services. The vendee cooperative society employed some of the workers
of vendor company. Those workmen who were not employed claimed reemployment in the
cooperative society. On these facts, the five-judge bench of the Supreme Court observed that
since the employees were paid the compensation, reinstatement cannot be granted because:

The double benefit in the form of payment of compensation and immediate

re-employment cannot be said to be based on any considerations of fair play
or justice. Fair play and justice obviously mean fair play and social justice to
both the parties. It would, we think, not be fair that the vendor should pay
compensation to his employees on the ground that the transfer brings about
the termination of their services and the vendee should be asked to take them
back on the ground that principles of social justice required him to do so.
Thus, in effect, the aforesaid decision had awarded single benefit of compensation. It
is difficult to reconcile Subong Tea Estate withAnakpalia Cooperative Agricultural and Industrial
Society, Moreover, we are unable to understand how an employee who received the statutory
compensation by vendor company is at the same time entitled to reinstatement by vendee
company. Further, it is against fair play and social justice.
Another issue is: who should be made liable to pay compensation under Section 25 FF
of the ID Act to the workmen? This issue was raised in New Horizon Sugal Mills Ltd v. Ariyur
Sugar Mill Staf!Welfare Union 223• In this case, the assets of New Horizon Sugar Mills Ltd were
seized and sold by auction under SARFAESI Act 2002 by the Indian Bank, a secured creditor.
The property was purchased in auction by EID Parry India Ltd. As a result, the services of
employees of New Horizon were terminated. On these facts, a question arose: who should
be made liable to pay compensation under Section 25FF to the workmen whose services
were deemed to have terminated? The Supreme Court held that it is a settled legal position
under several decisions of this Court starting from Anakapalla Cooperative Agricultural and
Industrial Society v. Its Workmen 224 that the liability to pay its workmen would be on New
Horizon, the transferer /seller. Therefore, it follows thatthe amount due to the workers will
have to be paid from out of the sale proceeds which are lying with the Indian Bank. Thus
the purchaser, namely EID Parry, who has already paid the sale price, will have no liability.
The other problem is when can the purchaser of an industrial establishment be said to
be the successor-in-interest of the vendor for the purposes of determining the rights of the
old workmen against him. The following factors have been taken into account in this regard.
(i) Did the purchaser purchase the whole of the business or the whole of the property of the
vendor concerned or only a part of it? (ii) Was the business purchased as a going concern
at the time of the sale transaction or only after the closure of the undertaking? (iii) Was the
business purchased carried on at the same place? (iv) Was the business carried on without
a substantial break in time? (v) Whether the purchaser carried on the same business in the
same establishment? (vi) If there was a break in the continuity of the business, what was
the nature of the break, what were the reasons for the break, and what was the length of

222 (1962) 2 LLJ 621 (SC).

223 (2009) 3 CLR 682.
224 (1962) 2 LLJ 629.
 Lay-off, Retrenchment, Transfer and Closure • 539

the break? (vii) Has the goodwill of the business been purchased upon the transfer of the
ownership of an establishment?
There is yet another problem namely, whether Section 25-FF applies to a partnership
firm. This problem received the attention of the Supreme Court in R S Madhoram & Sons
Pvt. Ltd v. Its Workmen. 225 Here, the company carried on a variety of businesses of allied
and retail nature. It transferred its retail business to a newly incorporated private company.
There was a common muster roll for all the companies; they were governed by the same
set of service conditions; they were liable to be transferred from one department to other;
they were treated as one unit for the purposes of bonus; they were not employed for any
particular branch or line of business. On these facts, it was held that Section 25-FF did not
apply in this case because the real business was not a separate establishment for the purposes
of Section 25-FF. However, the Court was cautious to add:

... as in other industrial matters, so on this question too, it would be difficult to

lay down any categorical or general proposition. Whether or not the transfer
in question attracts the provisions of Section 25-FF, must be determined in the
light of the circumstances of each case. It is hardly necessary to emphasize that
it is the matter of substance and not of form .... The question as to whether a
transfer has been effected so as to attract Section 25-FF must ultimately depend
upon the evaluation of all the relevant factors and it cannot be answered by
treating any one of them as of overriding or conclusive significance.

Exception to Section 25 FF
The Supreme Court in Gurmail Singh v. State of Punjab226 ruled, that where the transferer
and/or transferee is a state or instrumentality of a state, an exception to Section 25-FF of
the Industrial Disputes Act, 1947 may be made. In this case, the state of Punjab, which
was incurring losses, decided to transfer all the tubewells in the irrigation branch of the
public works department to the Punjab State Tubewells Corporation, a company owned
and managed by the state of Punjab. Consequently, it retrenched 498 tubewell operators.
However, the state government although transferring the tubewells, undertook to recoup any
losses that the corporation might incur as a result of the transfer. But while doing so, it has
abridged the rights of the retrenched workers by purporting to transfer only the tubewells
and consequently retrench the workers. On these facts, the Supreme Court observed:

We think that certainly in such circumstances, it will be open to this Court to

review the arrangements between the state government and the corporation
and issue appropriate directions. Indeed, such directions could be issued
even if the elements of the transfer in the present case fall short of a complete
succession to the business or undertaking of the state by the corporation, as
the principle sought to be applied is a constitutional principle flowing from
the contours of Article 14 of the Constitution which the state and corporation
are obliged to adhere to.
The Court summed up the position as under:

225 (1964) 1 LLJ 366 (SC).

226 1993 Lab. IC 428.
540 • Industrial Relations and Labour Laws

[E]ven before the insertion of Section 25-FF in the Act, the employees of a
predecessor had no right to claim re-employment by the successor in business
save in exceptional circumstances. Even where available, that claim was not a
matter of absolute right but one of discretion, to be judicially exercised, having
regard to all the circumstances. An industrial tribunal, while investigating such
a claim, had to carefully consider all the aspects of the matter. It had to examine
whether the refusal to give re-employment was capricious and industrially
unjustified on the part of successor in business or whether he could show cause
for such refusal on reasonable and bona fide grounds such as want of work,
inability of the applicantto carry on the available work efficiently, late receipt of
application for re-employment in view of prior commibnents or any other cause
which in the opinion of the tribunal made it unreasonable to force the successor-
in-interestto give re-employmentto all or any of the employees of the old concern.
This discretion given to industrial courts is no longer generally available because
of the insertion of Section 25-FF. But in a case where one or both of the parties is
a state instrumentality, having obligations under the Constitution, a court has
a right of judicial review, over all aspects of transfer of the undertaking. It is
open to a court, in such a situation, to give appropriate directions to ensure that
no injustice results from the change-over. In the present case, the parties to the
transfer are a state on the one hand and a fully-owned state corporation on the
other. That is why we have examined the terms and conditions of the transfer
and given appropriate directions to meet the needs of the situation.
The Court accordingly held that the affected employees can claim either compensation
or continuity of service but not both. The Court emphasized that in case any of the employees
have been paid any compensation, that amount will have to be refunded by them before
this order can be given effect.
In Sunil K R Ghosh v. K Ramachandran227, the Supreme Courtruled that without consent,
workmen cannot be forced to work under different managements and in the event workmen
are entitled to retirement/retrenchment compensation under ID Act.

B. Closure
Section 2 (cc) of the Industrial Disputes (Amendment) Act, 1982 defines' closure' to mean 'the
permanent closing down of a place of employment or part thereof'. Section 25-FFF imposes
a liability on the employer, who closes down his business, to give one month's notice and
pay compensation equal to 15 days' average pay for every completed year of continuous
service or any part thereof in excess of 6 months. In case of closure on account of unavoidable
circumstances beyond the control of employer, the maximum compensation payable to a
workman is 3 months' salary. However, unlike Section 25-F, payment of compensation in lieu
of notice are not conditions precedent to closure.228 Thus, as a consequence of closure of the
industry, Section 25-F is not attracted and the rigour imposed thereunder stands excluded.229

227 (2012) 1 LLJ 625 (SC).

228 SeeM/s Avon Services Production Agencies (P) Ltd v. Industrial Tribunal, Haryana AIR (1979) SC 120.
229 Managing Director, Harynana Seed Development Corporation v. Presdiging Officer, (1979) LLR 806
(SC); The Court also held that the respondents are entitled to be appointed if any junior person is
appointed.
 Lay-off, Retrenchment, Transfer and Closure • 5 41

The Industrial Disputes (Amendment) Act, 1916 Section 25-0 (which was amended in 1982)
lays down the procedure for closing down an undertaking and Section 25-P makes special
provision as to restarting of undertakings closed down before the commencement of the
Industrial Disputes (Amendment) Act, 1976.
1. Constitutional validity of Section 25-FFF. In Hathi Singh Mfg. Co. Ltd v. Union ofIndia,2 30
the Supreme Court was called upon to decide the constitutional validity of Section
25-FFF of the Industrial Disputes Act, which provided for payment of compensation
to the workman on the closure of industry. The Court upheld the constitutionality of
Section 25-FFF.
The facts of the case may be briefly stated: the three petitioners viz., owner of the
Cotton Textile Mills, Ahmedabad, the owner of the coal mine and the owner of the
spinning and weaving factory at Jamnagar had closed down their undertakings in April,
1957, 10 February 1957 and 24 April 1957 respectively on account of losses incurred by
them. They terminated the services of their workmen after giving them notice of closure.
In 1957, Section 25-FFF was inserted in the Industrial Disputes Act, 1947 and liability was
imposed for payment of compensation by employers who closed down their undertaking
after 27 November 1956. These employers were accordingly required to pay compensation
to their workmen affected by such closure under Section 25-FFF. The employers in a writ
petition challenged the validity of the section in the Supreme Court under Article 32 of the
Constitution mainly on three grounds: (i) that it imposed unreasonable restrictions on the
management's right to carry on trade, profession or business and thereby contravened Article
1 9(1) (g); (ii) that it was discriminatory in as much as different employers belonging to the
same group placed in similar circumstances were treated differently and thereby contravened
Article 14 of the Constitution; and (iii) that it penalized acts which when committed were
not offences and thereby contravened Article 20 of the Constitution. The Supreme Court
rejected all these contentions.
The aforesaid decision requires careful scrutiny. First, it has been observed that
the Court laid down the following criteria for determining the constitutionality of
Section 25-FFF:

Whether an impugned provision, imposing a fetter on the exercise of the

fundamental right guaranteed by Article 19 (1) (g) amounts to a reasonable
restriction imposed in the interest of general public must be adjudged ... in
the light of the nature and incidents of the right, the interest of general public
sought to be secured by imposing the restrictions and the reasonableness of
the quality and extent of the fetter upon the right.
The Court did not in fact apply all the above criteria in determining the constitutionality
of Section 25-FFF. Specifically, the first criteria, namely 'nature and incident of the right'
and third criteria, namely, 'reasonableness of the quality and extent of the fetter upon the
right' were not applied by the Court.
Second, the Court applied the following rationale for distinguishing between
prospective and retrospective operation of the statute:

230 Hathi Singh Mfg Co. v. Union of India, (1960) 3 SCR 528 (SC).
542 • Industrial Relations and Labour Laws

When Parliament enacts a law imposing a liability as flowing from certain

transactions prospectively, it evidently makes a distinction between those
transactions which are covered by the Act, and those which are not covered
by the Act, because they were completed before the date on which the Act
was enacted. This differentiation, however, does not amount to discrimination
which is liable to be struck down under Article 14. The power of the legislature
to impose civil liability in respect of transactions completed even on the
date on which the Act is enacted does not appear to be restricted. If, as is
conceded, and in our judgement rightly, by a statute imposing civil liability
in respect of post enactment transactions, no discrimination is practised, by
the statute which imposes liability in respect of transaction which has taken
place after a date fixed by the statute but before its enacbnent, it cannot be
said that discrimination is practised. Article 14 strikes at discrimination in the
application of the laws between persons similarly circumstanced; it does not
strike at a differentiation which may result by the enacbnent of a law between
transactions governed thereby and those which are not governed thereby.
The Court, however, did not in fact apply the above rationale in distinguishing the two
classes of cases involved in Hathi Singh' s case, namely, (i) those where the employer closed
his business on or before 27 November 1956, and (ii) those where the industry was closed
after 27 November 1957 but before the enactment of the provisions in 1957.
Third, the Court failed to make a careful analysis of the present economic and social
conditions of the country. It is regretted that the Court in fact took into account only in a
very general sense, the social and economic conditions of the country which was insufficient.
Fourth, the holding of the Court that as the requirements of payment of compensation
and service of notice to workmen provided in Section 25-FF and 25-FFF are not a condition-
precedent to transfer or closure and, the employer cannot be prosecuted under Section 31 (2)
for non-compliance with the provisions of Section 25-FF and 25-FFF and that non-compliance
of either Section 25-FF or Section 25-FFF only creates civil liability to pay compensation to
workmen upon transfer or closure of the undertaking seems to be a posbnortem operation
of the disease. This is also likely to encourage frequent violation of the provisions of the Act.
Indeed, in actual practice it is found that delay often occurred in payment of compensation
on transfer or closure of undertakings. This caused great hardship to the workmen.
2. Closure of a Portion of an Undertaking. So far as the closure of a portion of an
undertaking or a part of an industrial establishment is concerned, the Supreme Court
in Workmen of Straw Board Manufacturing Co. Ltd v. Mis Straw Board Manufacturing Co.
Ltd231 pointed out:
The most important aspect in this particular case relating to closure, in our
opinion, is whether one unit has such componential relation that closing of one
must lead to the closing of the other or one cannot reasonably exist without
the other. Functional integrality will assume an added significance in a case of
closure of a branch or unit. That the mill is capable of functioning in isolation
is of very material import in the case of closure. There is bound to be a shift of
emphasis in the application of various tests from one case to another.

231 Workmen of Straw Board Manufacturing Co. Ltd v. M/s Straw Board Manufacturing Co. Ltd, AIR (1974)
SC 1132.
 Lay-off, Retrenchment, Transfer and Closure • 543

The Court added:

The workmen cannot question the motive of the closure, once closure has
taken place in fact. The matter may be different if under the guise of closure,
the establishment is being carried on in some shape or form or at a different
place and the closure is only a ruse or pretence. Once the Court comes to the
conclusion that there is closure of an undertaking, the motive of the employer
ordinarily ceases to be relevant. No employer can be compelled to carry on
his business if he chooses to close it in truth and reality for reasons of his own.
The Court further pointed out: 'there is nothing wrong for an employer who has
decided to close the establishment to follow the steps of closure by stages. It may be in the
nature of a business to take recourse to such a mode, which cannot ordinarily and per se be
considered as unfair or illegitimate. Therefore, the termination of services of the first batch
of workmen on account of closure is not unjustified.'
In Avon Services v. Industrial Tribunal 232, the management attempted to serve notice on
certain workmen. The notice stated that the management had decided to close the painting
section from a certain date due to unavoidable circumstances, and further that the services
of the said workmen would no longer be required due to surplusage; they were, therefore,
retrenched. The workmen were accordingly informed that they should collect their dues
under Section 25-FFF from the office of the company. On these facts, a question arose whether
the case fell under Section25-F or 25-FFF. The Supreme Court first explained the distinction
between Sections 25-F and 25-FFF as follows:

By Section 25-F, a prohibition against retrenchment until the conditions

prescribed by that Section are fulfilled, is imposed; by Section 25-FFF (1)
termination of employment on closure of the undertaking without payment
of compensation and without either serving notice or paying wages in lieu of
notice is not prohibited. Payment of compensation and payment of wages for
the period of notice are not, therefore conditions precedent to closure.
The Court proceeded to determine whether there was anything in the notice to suggest
that the case was one of retrenchment or closure. It observed:

The tenor of the notice clearly indicates that workmen were rendered surplus
and they were retrenched. It is thus on the admission of appellant, a case of
retrenchment.
The Court then examined the contention that the notice referred to in Section 25-FFF,
was intended to be a notice of termination of service consequent upon closure of the painting
undertaking. It pointed out:

Now, even if a closure of an undertaking as contemplated by Section 25-FFF

need not necessarily comprehend a closure of the entire undertaking and
a closure of a distinct and separate unit of the undertaking would also be
covered by Section 25-FFF, the question is-whether painting section was
itself an undertaking.

232 Avon Services v. Industrial Tribunal, (1979) 1 LLJ 1 (SC).

5 44 • Industrial Relations and Labour Laws

The Court held that in the context of Section 25-FFF, it must mean a separate and
distinct business or commercial trading or industrial activity and not an infinitesimally
small part of a manufacturing process. In view of this, the Court stated that if painting
was no more undertaken as one of the separate jobs, the workmen would become surplus
and they could be retrenched, after paying compensation as required by Section 25-F. It
observed:

An employer may stop a certain work which was part of an undertaking but
which could not be classified as an independent undertaking; the stoppage
of work in this context would not amount to closure of the undertaking. The
three workmen were doing the work of painting the containers. No records
were shown that there was a separate establishment, that it was a separate sub-
section or that it had some separate supervisory arrangement. In fact, once the
container making section was closed down, the three painters became part and
parcel of the manufacturing process and if the painting work was not available
for them, they could have been assigned some other work and even if they had
to be retrenched as surplus, the case would squarely fall in Section 25-F and not
be covered by Section 25-FFF on a specious plea of closure of an undertaking. 233
The Supreme Court, accordingly, upheld the finding of the tribunal that this was a
case of 'retrenchment'. As conditions precedent were not complied with, it was invalid and
the workers were entitled to reinstatement with full back wages.
The net effect of this decision has been to restrict the scope of closure either to an entire
undertaking or to a distinct and separate unit of the undertaking.
3. Closure Compensation. In Management of Gordon Woodroffe Agencies Pvt. Ltd v.
Presiding Officer, Principal Labour Court234 the appellant, a trading agency closed
w.e.f. 31 May 1984, because it had incurred heavy losses in its business. The appellant
who had less then 50 workmen offered to all its workmen closure compensation as
prescribed by law and other legal entitlements. Many workmen received the said
compensation. However, respondent-workmen claimed alternate employment in a
sister concern of the appellant which was a manufacturing company. The appellant
denied respondents' claim. The dispute between workmen and the management was
referred for adjudication. The labour court held that closure was genuine and justified
in law. It directed appellant-management to pay to respondent-workmen ex-gratia
amounts apart from closure compensation. Then a writ petition was filed before the
High Court challenging award of additional compensation. The High Court dismissed
the petition. Thereupon, an appeal was filed before the Supreme Court. The Court held
that the labour court or the High Court has no authority in law to direct payment of
any additional sum by way of ex-gratia otherwise than what is provided under the
statute when the act of the management in closing down the establishment is found
to be valid and all legally payable amounts have been paid or offered in time.
The Court added that when the labour court came to the conclusion that the closure
of the establishment was legally justifiable and the management had as required under
the law, offered apart from the compensation payable for the closure, all other statutory
dues which some of the employees collected without demur and in the case of respondent-

233 Jd at 10.
234 2004 LLR 881.
 Lay-off, Retrenchment, Transfer and Closure • 545

workmen even though the same were offered on time, they did not accept it, therefore, the
question of paying any additional ex-gratia compensation which is not contemplated under
the statute, did not arise.
4. Oosure Compensation in Unavoidable Circumstances. The proviso to Section 25-FFF
states that the maximum compensation payable to workmen on account of unavoidable
circumstances beyond the control of the employer, is limited to the average pay for 3
months. The explanation to Section 25-FFF (1) provides that an undertaking which is
closed down by reason merely of:
(i) financial difficulties (including financial losses); or
(ii) accumulation of undisposed stock; or
(iii)the expiry of the period of lease or license granted to it; or
(iv) in a case where the undertaking is engaged in mining operations, exhaustion of
the minerals in the area in which such operations are carried on;
shall not be deemed to be closed down on account of unavoidable circumstances
beyond the control of the employer within the meaning of the proviso to this sub-section.
The expression 'the proviso to Section 25-FFF (1)' functions more or less as a definition
of an undertaking being closed down on account of unavoidable circumstances beyond the
control of the employer.
An analysis of decided cases reveals that the following situations, namely, (i) vis major,
i.e., an act of God, calamities, e.g., earthquakes, floods, cyclones, etc., (ii) enemy action as
in time of war, (iii) civil commotion, e.g., riots etc., (iv) action of state, viz., expropriation,
restraint on trade, e.g., drastic cut in import and control of supplies of raw materials, etc,; (v)
acts of utter lawlessness to which the employer is not a party, (vi) when the workmen create
circumstances which lead to closure, e.g., closure due to strike, threats, intimidation, violent
methods like stabbing and bomb throwing by workers235 are covered by the expression
'unavoidable circumstances beyond the control of employer.' On the other hand, closure
on account of (i) differences in;,artnership;236 (ii) gherao and the apprehension to the staff
or danger to personal safety;23 (iii) variety of reasons such as location in residential area,
shortage of space, continued losses, restrictions to operate at night238 are not covered within
the expression 'unavoidable circumstances beyond the control of the employer'.
The strict legal interpretation of the proviso of Sections 25-FF and 25-FFF appears to
have been taken by the Court, for instance, in Antony v. Kumaran 239 wherein the employer
who was running a grocery shop had to close it because he was suffering from tuberculosis
and was confined to a sanatorium. Aggrieved by the order, the workmen filed an application
under Section 33- C(2) to the labour court for compensation under Section 25-FFF. The Court
held that the workmen were entitled to compensation under Section25-FFF. Thereupon, the
employer filed a writ petition in the Kerala High Court. A question arose as to whether the
closure was 'for unavoidable circumstances beyond the control of the employer' under the
provision of sub-section (1) of Section 25-FFF. The Court, while conceding that an employer
suffering from tuberculosis was naturally not in a position to run his business as it was

235 See Bhattacharjee Rubber Works Ltd v. Bhattacharjee Rubber Workers Union', (1960} 2 LLJ 198 (SC}.
236 See Avtar Singh Anand v. Krishna, (1969} 2 LLJ 524 (Delhi}.
237 Kalinga Tubes v. Their Workmen, (1969} 2 LLJ 557,566 (SC}.
238 Investa Machine Tools & Engineering Co. Ltd v. Its Workmen, (1963} 2 LLJ (IT).
239 Antony v. Kumaran, (1979) 1 LLJ 606.
546 • Industrial Relations and Labour Laws

something beyond his control, nevertheless held that his disease was not a reason connected
with the running of the business; it was only personal to him. In view of this, it was held
that closure of the undertaking would not deprive the workmen of their full compensation.
In Shyamsunder v. Labour Court240, the proprietor closed down his press on the ground
that he was suffering from hypertension and was under constant physical care and attention.
He denied his liability to pay compensation exceeding 3 months under the proviso to Section
25-FFF (1) on account of 'unavoidable circumstances' beyond the control of the proprietor.
On these facts, a question arose whether the closing down of the undertaking fell under
proviso to Section 25-FFF (1). The Bombay High Court answered the question in negative
and observed:

The expression 'unavoidable circumstances' appearing in the proviso will

have to be strictly construed, if the intent of the legislature is to be carried out
and which is apparent from the explanation appended thereto. The expression
'unavoidable circumstances' must refer to the closure, the reasons for which
they are connected with the business or its function. The circumstances,
however unavoidable, may not attract the provision if those circumstances
are unrelated to the business of the undertaking or its functions. In order to
attract the proviso, the closure of an undertaking must be for unavoidable
circumstances beyond the control of the employer and such circumstances
must necessarily be in connection with or have nexus with the functioning of
the undertaking.
The Court accordingly held that illness of the proprietor cannot be an unavoidable
circumstance beyond his control as contemplated by the proviso to sub-section (1) of Section
25-FFF.
In Shri Rameshwar Dass v. State of Haryana 241 , the Supreme Court held that if there was
complete lawlessness prevailing in the undertaking over the course of a year, it could be
'unavoidable circumstances beyond the control of employer' under Proviso to 25-FFF (1).
However, in the present case, the Supreme Court did not decide the issue because in its
view, the proper course was to raise an industrial dispute. The strict interpretation given
by the Court may be welcomed by the workmen, but at the same time it causes hardship
in genuine cases to the management.
5. Enforcement of Section 25-FFF. The problem of enforcement of the provisions for the
payment of transfer and closure compensation has attracted great deal of attention.
There is no specific penal provision for contravention of the provisions of either Section
25-FF or Section 25-FFF. But Section 31 (2) of the Industrial Disputes Act,1947 provides
that:

whoever contravenes any of the provisions of this Act or any rule made
thereunder shall, if no other penalty is elsewhere provided by or under this
Act for such contravention, be punishable with fine which may extend to flOO.

240 1986 Lab. IC 767.

241 1987 Lab. IC 637.
 Lay-off, Retrenchment, Transfer and Closure • 5 4 7

The Supreme Court, we have already seen, in Hathi Singh Mfg Co. Ltd v. Union of
India 242, had held that as the requirements of payment of compensation and service of
notice to workmen provided in Sections 25- FF and 25-FFF are not a condition precedent to
transfer or closure and therefore, an employer cannot be prosecuted under Section 31 (2)
for non-compliance of the provisions of either Section 25-FF or Section 25-FFF. The Court
further held that non-compliance of either Section 25-FF or Section 25-FFF only creates civil
liability to pay compensation to workmen upon transfer or closure of undertaking. It seems
to be a posbnortem of the disease. This is also likely to encourage frequent violation of the
provisions of the Act. Indeed, in actual practice it is found that delay often occurred in the
payment of compensation on closure of undertaking.
6. Additional Restrictions on Industrial Establishments Employing 50 or More
Workmen. (1) Section 25-FF A which was inserted by Act 32 of 1972, requires an
employer intending to close down an undertaking to serve a notice, in the prescribed
manner, on the appropriate government or prescribed authorities at least 60 days before
the date on which the intended closure is to become effective stating the reasons for the
intended closure of undertaking, (a) This provision shall, however, be not applicable
in case of an undertaking:
(i) in which less than 50 workmen are employed; or
(ii) in which less than 50 workmen were employed on an average per working day in
the preceding 12 months.
(b) set-up for the construction of buildings, bridges, roads, canals, dams or for
other construction work or project.
(2) Notwithstanding anything contained in sub-section (1), the appropriate government
may, if it is satisfied that owing to such exceptional circumstances as accident in the
undertaking or death of the employer or the like it is necessary so to do, by order, direct
that provisions of sub-section (1) shall not apply in relation to such undertakings for
such period as may be specified in the orders.
The language of the aforesaid section is clearly mandatory. Thus, a closure effected in
fact, without complying with the requirements of Section 25-FFA must be held to be devoid
of legal effect, invalid and illegal.243
7. Restrictions on Industrial Establishments Employing 100 or More Workmen. 244 In
1976, the legislature imposed further restrictions on the power of the management
employing 300 or more workmen to close down the undertakings. However, the
Supreme Court declared the then Section 25-0 ultra vires. This led to the amendment
of Section 25-0 by Industrial Disputes (Amendment) Act, 1982,245 which lays down the
following procedure for closing an industrial establishment (not of seasonal character)
employing not less than 100 workmen.
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 90 days before the date on which the intended closure

242 (1960)3 SCR 528.

243 (1983)1 LLJ 326 (Born.).
244 The Industrial Disputes (Amendment) Act, 1982, provides that for the words 'three hundred', 'one
hundred' shall be substituted.
245 This Section came into force with effect from 21 August 1984.
548 • Industrial Relations and Labour Laws

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.
2. Where an application for permission has been made under sub-section (1), 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 regard to the genuineness
and adequacy of the reasons stated by the employer, the interest 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.
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 a period of 60 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 60 days.
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.
5. The appropriate government may, either on its own motion or on 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 a period of 30 days from the date of such reference.
6. Where no application for permission under sub-section (1) 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.
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 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 in relation to such undertaking for such period as may be specified in
the order.
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 15 days' average pay for
 Lay-off, Retrenchment, Transfer and Closure • 549

every completed year of continuous service or any part thereof in excess of 6

months.

a. Scope of Proviso to Section 25-0(1)

The proviso to Section 25-0 (1) excludes an undertaking dealing with construction of
building, etc., or for other construction work from following the procedure under Section
25-0 for closure, cannot be transplanted by any judicial interpretation to be a proviso
to Section 25-N which deals with entirely a different topic of conditions precedent to
retrenchment of workmen. It is obvious that retrenchment presupposes the termination
of surplus workmen in a going concern which is not closed down. If the concern itself is
closed down, all the workmen would be terminated by closure and on such closure for
calculating the compensation payable to them as closure compensation, the amount of
compensation may be computed by adopting the measure for compensation as if it was
a running establishment and to that extent Section 25-FFF may be pressed into service
by the closed undertaking. However, if the impugned notices issued by employer to its
workers are treated to have effected only retrenchment of workmen of an ongoing project
or establishment, the proviso to Section 25-0 sub-section (1) cannot be pressed in service
by any process of judicial interpretation, such an interpretation would go against the very
legislative intent in enacting Section 25-N which does not contain any such provision.246

b. Nature of inquiry under Section 25-0(2)

In Jayhind Engineering v. State of Karnataka247, the division bench of Karnataka High Court
explained that the nature of the inquiry contemplated under sub-section (2) of Section 25-0
of the Act envisages that some reasonable time necessarily had to be taken by the state
government in the course of the inquiry. Once an inquiry notice is issued on receipt of the
application by the state government, the running of the period of 60 days under sub-section
(3) of Section 25-0 of the Act is arrested. However, if the inquiry goes beyond 60 days even
for valid reasons, it cannot be said that permission is deemed to be granted.

c. Scope of Section 25-0(3)

Section 25-0(3) makes it clear that in order to get the benefit of deemed permission, two
conditions are required to be complied with (i) there should be an application filed as
required under sub-section (1) of Section 25-0 of the Act, and (ii) the government should
not have made an order granting or refusing to grant permission to the employer within
a period of 60 days from the date on which such an application is made. For all purposes,
the date of receipt of such an application after representation alone should be taken
as the date of filing of the application seeking permission to close down the industrial
establishment for the purpose of determining the period prescribed to get the benefit of
deemed permission. The date of filing of the application cannot be taken into account to
take the view that since there was no order made within 60 days, the applicant is entitled
to the benefit of deemed permission. The return of the application by the state government
even assuming for the sake of argument is not valid in law, since the application was

246 LalMohammed v. Indian Railway Construction Co. Ltd, (1999) Lab. IC 40 (SC); (1999) LLR 100; (1999)
1 LLJ 317 (SC).
247 (2004) Lab. IC 989.
55o • Industrial Relations and Labour Laws

returned, it has to be held under the circumstances that there was an order made by the
state government refusing to grant the permission on such an application. Therefore, if
once an application is returned, it must be held that the permission sought is rejected
by the state government. 248
Procedure for closing down an undertaking under Section 25-0 (5). The division
bench of the Madhya Pradesh High Court in Ujjain Mill Mazdoor Sangh v. State of M P249
held that Section 25-0(5) could not be interpreted in a manner to impose obligation on the
government to necessarily refer the matter to the tribunal for adjudication. A perusal of the
provision in sub-section (5) of Section 25-0 of the Act shows that word 'may' occurring therein
makes it optional for the government to either review the order for granting or refusing
permission for closure or to refer the matter to the industrial tribunal for adjudication. It is
not mandatory for the government to resort to both options simultaneously or one after the
other. The word 'or' assumes significance in this context, it may or may not resort to either
option, or may take one option. When it elects to take review option, that ends the matter.
8. Special Provisions as to Restarting of Undertaking, Closed Down before
Commencement of the Industrial Disputes (Amendment) Act, 1976. Section 25-P
lays down special provisions as to the restarting of undertaking closed down before
commencement of the Industrial Disputes Amendment Act, 1976. It provides: If the
appropriate government is of the opinion in respect of any undertaking of an industrial
establishment to which Chapter V-B applies and which closed drown before the
commencement of the Industrial Disputes (Amendment) Act, 1976,
(a) that such undertaking was closed down otherwise than on account of unavoidable
circumstances beyond the control of the employer;
(b) that there are possibilities of restarting the undertaking;
(c) that it 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
(d) that the restarting of the undertaking will not result in hardship to the employer in
relation to the undertaking, it may, after giving an opportunity to such employer
and workmen, direct, by order published in the official gazerte, 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.
9. Penalty for Closure. Section 25 R provides penalty for violation of Sections 25-0 and
25-P: It reads:
(1) Anyemployerwhoclosesdownanundertakingwithoutcomplyingwiththeprovisions
of sub-section (1) of Section 25-0 shall be punishable with imprisonment for a term
which may extend to 6 months, or with fine which may extend to f5,000 or with both.
(2) Any employer who contravenes an order refusing to grant permission to close down
an undertaking under sub-section (2) of Section 25-0 or a direction given under
Section 25-P shall be punishable with imprisonment for a term which may extend
to one year, or with fine which may extend to f5,000, or with both and where the

z4slbid.
249 1999 LLR 49.
 Lay-off, Retrenchment, Transfer and Closure • 5 5 1

contravention is a continuing one, with a further fine which may extend to f2,000
for every day during which the contravention continues after the conviction.
10. Constitutional validity of Sections 25-0 and 25-R. Excel Wear v. Union of India 250
decided an extremely important issue of constitutionality of Section 25-R under the
Industrial Disputes (Amendment) Act,1976 (since amended). The principal issues
were: (i) Whether the right to close down the business was an integral part of the
fundamental right to carry on business? (ii) Whether Section 25-0 or 25-R as they
existed prior to 1982, violated Articles 14 and 19 (1) (g) of the Constitution? (iii) Can
the partners challenge the validity of the law in the name of the firm and company
along with the shareholders?
The facts of the case were as follows: The petitioners filed three writ petitions which
raised common question of law. The judgement covered all the three. In the first petition
the petitioner firm, Excel Wear-a partnership firm was involved, in the second Acme
Manufacturing Company Ltd and in the third petition, shareholders of Apar (P) Ltd
were involved. In the first case, about 400 workmen were employed. According to
the petitioner, various kinds of situations such as labour trouble of an unprecedented
nature, non-availability of raw material, running of the factory at loss, paucity of
adequate number of competent and suitable persons in the family of partners, and
unsurmountable difficulty in the replacement of damaged or worn-out machineries
occurred from the year 1974 to 1976. Finding it difficult, almost impossible, Excel Wear
applied for previous approval of the state government, in accordance with Section
25-0 (1). The government, however, refused to accord the approval on the ground that
the reasons given by the employer for the intended closure were 'prejudicial to public
interest'. The petitioner challenged the validity of this order. In the second case, the
petitioner, decided to close down the establishment due to huge losses incurred by
him on account of low productivity, serious labour unrest and indiscipline resulting
in various incidents of assaults or the like. The company accordingly applied to the
state government on 2 May 1977 under Section 25-0 (1) for approval of the intended
closure. The government again refused to grant approval on the ground that it was
prejudicial to public interest. In the last petition, the company was compelled to close
down the factory. It, thereupon, served a notice on the state government under Section
25-0 (1) on 16 September 1976. Again, the government refused permission on the
ground that the stated reasons of intended closure were inadequate and insufficient
and were prejudicial to public interest. The company, therefore, filed a petition before
the Supreme Court. The challenge was directed against the new Chapter V-B as a
whole, but mainly centred round the provisions with regard to Sections 25-0 and
25-R. According to the employer, the impugned law was ultra vires the Constitution.
The Supreme Court after considering the concept of 'socialism' or a 'socialistic State'
examined the reasons given by the government in refusing the permission for closing
down and found it to be vague and universal. It observed:
Whimsically and capriciously, the authority can refuse permission to close
down. Cases may be there, and those in hand seem to be of that nature, where
if the employer acts according to the direction given in the order, he will have
no other alternative but to face ruination in the matter of personal safety and

250 Excel Wear v. Union of India, (1978) 4 SCC 224.

5 5 2 • Industrial Relations and Labour Laws

on the economic front. If he violates it, apart from the civil liability which will
be of a recurring nature, he incurs the penal liability not only under Section
25-R of the Act but under many other statutes.
The Court then examined the question whether it would be incumbent for the authority
to give reasons in an order under Section 25-0 (2) and observed:
If the government order is not communicated to the employer within 90 days,
strictly speaking, the criminal liability under Section 25-R may not be attracted
if on the expiry of that period the employer closes down the undertaking. But it
seems the civil liability under Section 25-0 (5) will come into play even after the
passing of the order of refusal of permission to close down on the expiry of the
period of 90 days. Intrinsically no provision in Chapter V-B of the Act suggests
that the object of carrying on the production can be achieved by the refusal to
grant permission although in the Objects and Reasons of the Amending Act
such an object seems to be there, although remotely, and secondly, it is highly
unreasonable to achieve the object by compelling the employer not to close
down in public interest for maintaining the production.251
The Court was of the view that the order passed by the authority was not subject to
any scrutiny by any higher authority or tribunal either in an appeal or application.
The Courtthen proceeded to examine whether Chapter V-B suffered from any vice of
excessive and unreasonable restrictions under Articles 14 and 19 of the Indian Constitution.
The Court answered it in affirmative when it observed:

It is no doubt true that Chapter V-B deals with certain comparatively bigger
undertakings and of a few types only. But with all this difference, it has not
made the law reasonable. It may be a reasonable classification for saving the
law from violation of Article 14 but certainly it does not make the restriction
reasonable within the meaning of Article 19 (6). Similarly, the interest of
ancillary industry cannot be protected by compelling an employer to carry
on the industry although he is incapacitated to do so. All the comprehensive
and detailed information given in the application forms are of no avail to
the employer if the law permits the authority to pass a cryptic, capricious,
whimsical and one-sided order.252
Thereafter, the Court rejected the contention that a law which takes away or abridges
the fundamental rights of citizens under Article 19 (1) (g) would be void and, therefore, non
est in respect of non-citizens. The last contention whether Chapter V-B was saved by Article
31 C of the Constitution was also negatived.
11. Legislative Response. In order to fill the gap created by the Supreme Court in Excel
Wear v. Union of India, supra, Section 25-0 of the Industrial Disputes (Amendment)
Act, 1982 (as is given in the text) has made an amendment.
12. Constitutional validity of Section 25-0 of the Industrial Disputes Act. The constitution
bench of the Supreme Court on 17 January 2002 in M/s Orissa Textile and Steel Co. Ltd v.

251 Excel Wear v. Union of India, (1978) 4 sec 224 at 247.

252 Excel Wear v. Union of India, (1978) 4 sec 224 at 249.
 Lay-off, Retrenchment, Transfer and Closure • 5 5 3

State ofOrissa253 decided an extremely important issue relating to constitutional validity of

Section 25-0 of the ID Act incorporated by the amendment Act 46 of 1982254 (hereinafter
referred to as the amended Section 25-0). The Court, by upholding the validity of the
amended Section 25-0, has settled the controversy once and for all.
Prior to the Supreme Court decision, the high courts were, however, divided on the
issue of constitutional validity of amended Section 25-0. While the Delhi High Court in
D C M Ltd v. Lieutenant Governor255 and the Kerala High Court in Laxmi Starch v. Kundra
Factory Workers Union 256 upheld the constitutionality of section 25-0, the Karnataka High
Court in Union of India v. Stumpp Schedule and Somappa Ltd257 and the Calcutta High Court
in Maulis of India Ltd v. State of West Bengal258 held section 25-0 as a whole and Section
25-R insofar as it relates to awarding of punishment for violation of section 25-0 to be
constitutionally invalid for violation of Article 19(1)(g) of the Constitution. The Kerala
High Court in Laxmi Starch case while upholding the validity of the amended section 25-0,
observed that it is not violative of Article 19(1)(g) as reasonable restrictions are permissible
under Article 19(6) of the Constitution. The provision is also not violative of Article 14 of
the Constitution because (i) no arbitrariness is involved, as the classification is on a rational
basis as between big establishments and small ones having intelligible difference and
reasonable nexus to the object: and (ii) it is not lacking in procedural safeguards to avoid or
correct arbitrariness. The approach adopted by the Supreme Court may now be examined.

Scope of amended Section 25-0

The Supreme Court analysed the scope of amended Section 25-0 and ruled:
(i) the appropriate government before passing an order is bound to make an inquiry;
(iz) the order passed by the appropriate government has to be in writing and should
contain reasons;
(iii) the employer has to give notice by filling up a form in which he has to give precise
details and information;
(iv) the requirement to make an inquiry postulates as held in Meenakshi Mills' case, an
inquiry into the correctness of the facts stated by the employer in the notice served
by him and also all other relevant facts and circumstances including the bona fides of
the employer;
(v) an opportunity to be heard would have to be afforded to the employer, workmen and
all persons interested;
(vz) the detailed information which the employer gives would enable the appropriate
government to make up its mind and collect necessary facts for the purposes of granting
or refusing permission.

253 2002 LLR 225.

254 The provision came into force with effect from 21 August 1984.
255 AIR 1989 Del. 193.
256 (1992) Lab IC 1337 (Ker.).
257 (1989) 2 LLJ 4.
258 (1989) 2 LLJ 400.
554 • Industrial Relations and Labour Laws

The appropriate government would have to ascertain whether the information

furnished is correct and whether the proposed action is necessary and, if so, to what
extent;
(vii) the making of an inquiry, the affording of an opportunity to the employer, the workmen
and all interested persons and the necessity to pass a written order containing reasons
envisages exercise of functions which are not purely administrative in character but
quasi-judicial in nature; and
(viii)the words' appropriate government, after making such inquiry, as it thinks fit' as held
in Meenakshi Mills' case does not mean that the government may dispense with the
inquiry at its discretion. These words only mean that the government has discretion
about the nature of the inquiry it is to make.

Time limit
The Court, while dealing with the time limit fixed in the amended sub-section (4) of Section
25-0, namely, that the order of the appropriate government shall remain in force for one
year from the date of such order held that the provision for a period of one year makes
the restriction reasonable. Justifying the provisions, the Court said that if the reasons were
genuine and adequate, the very fact that they have persisted for a year or more is sufficient
to necessitate a fresh look. Also, if the reasons have persisted for a year, it can hardly be said
that they are the same. The difficulties faced during the year, provided they are genuine
and adequate, would by themselves be additional grounds. Further, by the end of the year
the interest of the general public or other relevant factors, which necessitated refusal of
permission on the earlier occasion may not prevail. The appropriate government would
necessarily have to make a fresh inquiry, give a reasonable opportunity of being heard to
the employer, workmen and all concerned.

Deemed permission
The Supreme Court held the defect in the original Section 25-0 regarding the effect of
not communicating the order of the government on the application has been cured by
incorporating a deeming clause in amended sub-section (3) of Section 25-0 which provides
that if the appropriate government does not communicate the order within a period of 60
days from the date on which the application is made, the permission applied for shall be
deemed to have been granted.

Review of the order granting or refusing permission

Would the amended sub-section (5) of Section 25-0 which provides that the appropriate
government may, either on its own or on an application made by the employer or any
workman, review its order granting or refusing permission or refer the matter to a tribunal
for adjudication and if a reference is made to a tribunal (under this sub-section) then the
tribunal should pass its award within a period of 30 days from the date of such reference,
cure the defects as pointed out in Excel Wear v. Union of India? 259

259 (1979) 1 SCR 1009.

 Lay-off, Retrenchment, Transfer and Closure • 5 5 5

To examine the above issue, it is necessary to consider the contentions of the employer,
namely, (z) it is left to the discretion of the appropriate government to either review or make
a reference; and (ii) the employer has no right to compulsoril~ seek a review or a reference.
The Court rejected the aforesaid contentions and observed:2

A proper reading of sub-section (5) of amended Section 25-0 shows that

in the context in which it is used, the word 'may' necessarily means 'shall'.
Thus the appropriate government 'shall' review the order if an application in
that behalf is made by the employer or the workman. Similarly, as required
by the employer or the workman, it shall refer the matter to a tribunal for
adjudication. As submitted by the learned Attorney General, in a review the
appropriate government would have to make an inquiry into all necessary
facts, particularly into the genuineness and adequacy of the reasons stated by
the employer. An opportunity of being heard would have to be given to the
employer, workmen and all interested persons. The order on review would
have to be in writing giving reasons. Thus, in exercising powers of review,
the appropriate government would be performing quasi-judicial functions.
The Court added: 261

Sub-section (5) of amended Section 25-0 provides that award should be passed
within a period of 30 days from the date of reference. Even though it does not
provide any time-frame within which the review is to be disposed of; it is settled
law that the same would have to be disposed of within a reasonable period of
time. In our view, a period of 30 days would be a reasonable period for disposing
of a review also. This review and/ or reference under amended Section 25-0
would be in addition to a judicial review under Article 226 or Article 32.

Exceptional circumstances
The Supreme Court, while dealing with the amended sub-section (7) of Section 25-0 which
provides that if there are exceptional circumstances or accident in the undertaking or death
of the employer or the like, held that the appropriate government could direct that the
provision of sub-section (1) would not apply to such an undertaking. In other words, the
Court recognized the fact that if there were exceptional circumstances then there could be
no compulsion to continue to run the business. The Court, however, clarified that it was not
laying down that some difficulty or financial hardship in running the establishment would
be sufficient. What is required is that the employer must show that it has become impossible
to continue to run the establishment. The Court held that it is from this point of view that
the restrictions imposed may seem to be reasonable and in the interest of general public.

An evaluation
To sum up, it may be said that the Supreme Court in the case under review has drawn an
analogy with section 25-N in Meenakshi Mills case and generally extended the principles laid

260 2002 LLR 225 at 234.

261 Ibid.
5 5 6 • Industrial Relations and Labour Laws

down therein while considering the constitutional validity of section 25-0. However, the
Court was cautious in interpreting the words 'the appropriate government, after making
an inquiry, as it thinks fit' to mean that the appropriate government has discretion about
the nature of inquiry it is to make. It does not mean that it may dispense with the inquiry
at its discretion.
While dealing with nature of the function performed by the appropriate government
in exercising its powers to review, the Court ruled that it performs judicial functions. Being
aware of the financial hardship in running the establishment, the Court pointed out that in
such a situation the employer must prove that it had become impossible for him to continue
to run the establishment. Justifying the constitutional validity of the amended Section 25-0,
the Court pointed out the phrase 'in the interest of the general public' is a phrase of definite
connotation and a known concept. This phrase, as used in amended Section 25-0, has been
bodily lifted from Article 19(6) of the Constitution of India.
In, S G Chemical and Dyes Trading Employees' Union v. S G Chemicals and Dyes Trading
Ltd 262, the Supreme Court held that Section 25-0 applies to the closure of'an undertaking of
an industrial establishment' and not to the closure of 'an industrial establishment'. Section
25-L, however, defines only the expression 'industrial establishment' and not the expression
'an undertaking of an industrial establishment'. It also does not define the term 'undertaking'.
Section 25-L does not require that an undertaking of an industrial establishment should also
be an 'industrial establishment' or it should be located in the same premises as the 'industrial
establishment'. The term 'undertaking' though it occurs in several sections of the Industrial
Disputes Act, as for instance, Sections 25-FF,25-FFA and 25-FFF, is not defined anywhere
in the Act. Even the new Clause (ka) which was inserted in Section 2 by the Amendment
Act, 1982, defines the expression 'industrial establishment or undertaking' and not the term
'undertaking simpliciter'. It would appear from the opening words of Clause (ka) namely,
'industrial establishment or undertaking' means an establishment or undertaking in which
any industry is carried on. The term 'undertaking' in that definition applies to an industrial
undertaking. It would thus appear that the word 'undertaking' wherever it occurs in the
Industrial Disputes Act, unless a specific meaning is given to that term by that particular
provision, it is to be understood in its ordinary meaning and sense.
13. Penalty for closure. Section 25-R (1) prescribes penalty for an employer who closes
down an undertaking without complying with the provision of Section 25-0 (1), which
may extend to 6 months, or with fine which may extend to f5 ,000 or with both. Further,
Section 25-P (2) provides that 'any employer,' who contravenes an order refusing to
grant permission to close down an undertaking under Section 25-0 (2) or a direction
given under Section 25-P, shall be punishable with imprisonment for a term which
may extend to one year, or with a fine which may extend to f5,000 or with both, and
where the contravention is a continuing one, with a further fine which may extend to
f2,000 for every day during which the contravention continues after the conviction.
14. Adequacy of punishment awarded for violating Section 25-0. The tendency of the
Court to strictly adhere to severe punishment provided under the Act for violation of
labour laws is evident from the decision of the Gujarat High Court in State of Gujarat
v. Continental Textile Mills 263 • In this case, the only question involved was whether the

262 SG Chemicals and Dyes Trading Employees' Union v. SG Chemicals and Dyes Trading Ltd, (1986) Lab.
IC 863.
263 State of Gujarat v. Continental Textile Mills, (1998) 1 LLJ 30.
 Lay-off, Retrenchment, Transfer and Closure • 5 5 7

fine of flO0 /- imposed on each of the accused (charged with breach of Section 25-0(1)
of the ID Act) was sufficient. The Court held that in the circumstances of the case, fine
of flO0 /- was nothing but a mockery of statutory provisions. It enhanced, therefore,
the sentence to 3 months' simple imprisonment and fine of fS,000/- and in default of
payment of the fine, to undergo a further period of one month's simple imprisonment.
A reading of Section 25-0 clearly shows that for closure, the procedure prescribed under
sub-clause (1) of the said provision is mandatory be followed by an employer who
intends to close down the undertaking. A failure to comply with the provisions of the said
Section makes an employer liable under sub-clause (1) of Section 25-R for punishment
of imprisonment for a term upto 6 months or with a fine upto f5 ,000 /- or both.
Management of
Discipline and
Disciplinary
Procedure 21
The strict law of master and servant conferred upon the employer an unfettered right
to hire and fire his employees 1 . This traditional law of employer-workmen relationship
was based purely on contract. Quite apart from the law of contract, it is obvious that in
the day-to-day running of the industry, the management is required to take disciplinary
action against erring workmen. Initial decisions as to maintenance of discipline rest with
the employer. These decisions, when made bona fide, are related to, and dependant upon
considerations of the overall needs of the industry. But the reports of committees and
commissions on labour 2 and reported decisions3 are full of instances that managements
have victimized their workmen for their union activities, and in particular, for inciting
other workers to go on strike or fomenting a strike. Instances are not lacking when assertive
striking employees were discharged en masse4 . Further, instances of dismissal of workmen

1 Province of Bombay v . Western India Automobile Association, AIR 1949. Bombay 41.
2 The Royal Commission on Labour was applied at the prevailing insecurity of service of workmen.
The Bombay Textile Labour Investigation Committee (1939-1940) observed:
There is no fear which haunts an industrial worker more constantly than the fear of losing his job
as there is nothing which he prizes more than economic security. The fear of his being summarily
dismissed for even a slight breach of rules of discipline or for interesting himself in trade union
activities disturbs his peace of mind. It is a notorious fact that dismissal of workers has been the
originating cause of not a few industrial disputes and strikes. The provision of effective safeguard
against unjust and wrongful dismissal is therefore, in the interest as much as of industry as of
workers. The evil of unfair dismissals or indefinite suspension unfortunately appears to be common
in many industries.
3 See for instance, F W Heilegers & Co. Ltd v. Their Employees, (1950) LLJ 231, Kedar Nath Purshottam
& Co. Ltd., (1952) 2 LLJ 349.
4 See for instance, Bata Shoe Co. v. D N Ganguli, AIR 1961 SC 1158; IM H Press v. Additional Tribunal,
1961 1 LLJ 499 (SC).
560 • Industrial Relations and Labour Laws

by the management without comp~ing with the provisions of the standing orders5 of the
company or rules of natural justice are not infrequent. Under the circumstances, the need
to protect workmen against ea pricious and vindictive action of the management becomes
obvious. It was realized in most industrially advanced countries that if the law of master
and servant was given free play, workers would hardly have any security of tenure.
On the other hand, in day-to-day administration, management is called upon to take
bona fide decisions against erring workmen. It is also called upon to take disciplinary action
against a workman who is found guilty of serious misconduct where such misconduct
consists of intentional damage to the property of the concern or serious personal injury to
other employees of the concern or where there is reasonable apprehension of their committing
acts of sabotage or instigation, abebnent or incitement of workers of the concern to participate
in the aforesaid activities. Under the circumstances, the mere fact that the management's
order of dismissal of the workman is wrongful, disproportionate or mala fide and affects
the workman cannot altogether deprive the management from taking disciplinary action
against the workman. To do so is to encourage indiscipline and render day-to-day running
of the concern impossible.
To meet this situation, courts have evolved various norms to regulate management's
power to dismiss its workmen. They have tried to maintain a balance between the power
of the management to discipline the workmen and security of tenure of workmen. Further,
the courts have not only interpreted the existing law but made new laws to meet the needs
of the industry and to avoid hardship and unfairness to workers.

Tribunals' Intervention in Management's

Right to Take Disciplinary Action
The labour appellate tribunal in Buckingham and Carnatic Mills Ltd v. Their Workmen 7 ruled
that the decision of the management in relation to the charges against the employees will
not prevail unless:
(a) there is a want of bona fides, or
(b) it is a case of victimization or unfair labour practice or violation of the principles
of natural justice, or
(c) there is a basic error on facts, or
(d) there has been a perverse finding on the materials.
The aforesaid principles found the approval of the Supreme Court in Chartered Bank Bombay
v. Chartered Bank Employees' Union 8, Assam Oil Ltd v. Its Workmen 9 and Indian Iron and Steel
Co. Ltd v. Their Workmen 10•

5 For instance, see IM H Press v. Additional Tribunal, 19611 LLJ 499 (SC); Punjab National Bank v. Their
Workmen, 1959 2 LLJ 666 (SC}.
6 See for instance, Bangalore Silk Throwing Factory v. Its Workmen, (1957) 1 LLJ 435 (LAT); Model Mills
v. Dharmdas, (1958) 1 LLJ 539; Punjab National Bank v. Their Workmen, (1959) 2 LLJ 666 (SC).
7 Buckingham and Carnatic Mills Ltd v. Their Workmen, (1951) 2 LLJ 314 (LAT).
8 Chartered Bank Bombay v. Chartered Bank Employees' Union, (1960) 18 FJR 354.
9 Assam Oil Ltd v. Its Workmen, (1960) 18 FJR 354.
10 Indian Iron and Steel Co. Ltd v. Their Workmen, 1958 SC 130.
 Management of Disdpline and Disdplinary Procedure • 5 61

In Assam Oil Company Ltd v. Its Workmen 11 , the Supreme Court observed:
Just as the employer's right to exercise his option in terms of the contract has
to be recognized, so is the employee's right to expect security of tenure to
be taken into account. These principles have been consistently followed by
industrial tribunals and we think, rightly.
Again, in Indian Iron and Steel Company Ltd v. Their Workmen 12, the Supreme Court held:
Undoubtedly, the management of a concern has the power to direct its own
internal administration and discipline, but the power is not unlimited and,
when a dispute arises, the industrial tribunals have been given the power to
see whether the termination of service of a workman is justified and to give
appropriate relief. In cases of dismissal on misconduct, the tribunal does not,
however, act as a court of appeal and substitutes its own judgement for that
of the management. It will interfere when:
(a) there is want of good faith
(b) there is victimization or unfair labour practice
(c) the management has been guilty of a basic error of violation of a principle
of natural justice
(d) on the material, the finding is completely baseless or perverse
Again, in Workmen of Motipur Sugar Factory Pvt. Ltd. v. Motipur Sugar Factory Pvt. Ltd. 13,
the Supreme Court while dealing with the evidence required to be adduced before
tribunals in case of failure to hold domestic inquiry observed:
It is now well settled that where an employer has failed to make an inquiry
before dismissing or discharging a workman, it is open to him to justify the
action before the tribunal by leading all relevant evidence before it. In such
a case, the employer would not have the benefit which he had in case where
domestic inquiries have been held. The entire matter would be open before the
tribunal which will have jurisdiction not only to go into the limited questions
open to tribunal where domestic inquiry has been properly held, but also
to satisfy itself on the facts adduced before it by the employer whether the
dismissal or discharge was justified.
In State Bank of Bikaner and Jaipur v. Nemi Chand Nalwaya 14, the Supreme Court held that it
is now well settled that the labour tribunals or courts will not act as an appellate court and
re-assess the evidence led in the domestic inquiry, nor interfere on the ground that another
view is possible on the material on record. If the inquiry has been fairly and properly held
and the findings are based on evidence, the question of the adequacy of the evidence or
the reliable nature of the evidence will not be grounds for interfering with the findings in
deparbnental inquiries. Therefore, courts will not interfere with finding of facts recorded
in deparbnental inquiries, except where such findings are based on no evidence or where
they are clearly perverse. The test to find out perversity is to see whether a tribunal acting
reasonably could have arrived at such conclusion or finding on the material on record. Courts
will however, interfere with the findings in disciplinary matters, if principles of natural

11 Assam Oil Co. Ltd v. Its Workmen, (1960) 1 LLJ 587, 591.
12 Indian Iron Co. Ltd v. Their Workmen, (1958) 1 LLJ 296,270.
13 Workmen of Motipur Sugar Factory Private Ltd v. Motipur Sugar Private Ltd, (1965) 2 LLJ 162, 169.
14 2011 LLR 634 (SC).
562 • Industrial Relations and Labour Laws

justice or statutory regulation have been violated or if the order is found to be arbitrary,
capricious, mala fide or based on extraneous considerations.

Since 'misconduct' results in dismissal, it is necessary to know the concept of misconduct.

The expression 'misconduct' has not been defined in any industrial legislation. Under the
Model Standing Order of the Industrial Employment (Standing Orders) Act, 1946, the
following conducts shall be deemed to be misconduct:
(a) wilful insubordination or disobedience, whether alone or in combination with
others, to any lawful and reasonable order of a superior;
(b) theft, fraud or dishonesty in connection with the employer's business or property;
(c) wilful damage to or loss of employer's goods or property;
(d) taking or giving bribes or any illegal gratification;
(e) habitual absence without leave or absence without leave for more than 10 days;
(f) habitual late attendance;
(g) habitual breach of any law applicable to the establishment
(h) riotous or disorderly behaviour during working hours at the establishment or any
act subversive of discipline;
(i) habitual negligence or neglect of work;
G) frequent repetition of any act of omission for which a fine may be imposed to a
maximum of 2 per cent of the wages in a month;
(k) striking work or inciting others to strike work in contravention of the provisions
of any law or rule having the force of law.
In Ravi Yashwant Bhoir v. District Collector, Raigad15, the Supreme Court observed that 'the
word "misconduct" though not capable of precise definition, receives its connotation from
the context of delinquency in its performance and its effect on the discipline and nature of
the duty. It may involve moral turpitude, it must be improper or wrong behaviour, unlawful
behaviour, wilful in character, a forbidden act, a transgression of established and definite
rules of action or code of conduct but not mere error of judgement, carelessness or negligence
in performance of the duty. The misconduct should bear forbidden quality or character. Its
ambit has to be construed with reference to the subject matter and the context wherein the
term occurs, regard being had to the scope of the statute and the public purpose it seeks to
serve.' Explaining the concept of 'misconduct', the Court pointed out:
The expression 'misconduct' has to be understood as a transgression of some
established and definite rule of action, a forbidden act, unlawful behaviour,
wilful in character. It may be synonymous with misdemeanour in propriety
and mismanagement. In a particular case, negligence or carelessness may
also be a misconduct, for example, when a watchman leaves his duty and
goes to watch cinema, though there may be no theft or loss to the institution,
but leaving the place of duty itself amounts to misconduct. It may be more
serious in case of disciplinary forces. Further, the expression 'misconduct' has

15 (2012) 3 sec 186 at 197.

 Management of Disdpline and Disdplinary Procedure • 5 6 3

to be construed and understood in reference to the subject matter and context

wherein the term occurs taking into consideration the scope and object of the
statute. Misconduct is to be measured in terms of the nature of the misconduct
and it should be viewed with the consequences of misconduct as to whether
it has been detrimental to public interest.
A survey of decided cases indicates that acts such as absence without leave 16, go-slow 17,
habitual neglect of work18, misappropriation of fund or material 19, disobedience and
subverting of discipline 20 including disobedience that is likely to endanger life, threatening
a co-worker within premises, insulting behaviour by employee towards customers21 , etc.,
constitute misconduct.

The expression 'discharge' is very often colourless as to the cause of relieving of the
obligation arising from employer-workmen relationship. It may signify termination
of the relationship by the workman himself or termination of the relationship by the
employer either under the standing orders or under the agreements or otherwise. The
Indian legislature however, emphasizes that action on the part of the employer was a
necessary element.
In Bombay Garrage (Ahmedabad) Ltd v. Its Workmen 22, the Gujarat High Court observed:
The expression 'dismissal' and the expression 'discharge' in connection
with punishment for misconduct have acquired, in industrial law, different
connotations and the one cannot be equated with the other ....
InJ K Hosiery Factory v. LAT23, Justice MC Desai observed:

The words whether by dismissal or otherwise ... govern the word 'punishment'
only and not the word 'discharge'. Punishment can be in the form of dismissal
or suspension or fine or reduction of pay and, therefore, the words could be
used with the word 'punishment' to make it clear that all forms of punishment
are within the scope of the provisions.
And in Assam Oil Company v. Its Workmen 24, the Supreme Court cautioned:
It may also appear in some cases that though the order of discharge is couched
in words which do not impute any misconduct to the employee, in substance it

16 See Channappa Basappa Happali v. State of Mysore, AIR (1972} SC 32; Mafatlal Narain Das Barot v.
Divisional Controller, (1966} 1 LLJ 437 (SC}; Burn & Co. Ltd v. Workmen, AIR 1957 SC 438.
17 Bharat Sugar Mills v. Jai Singh, (1961} 2 LLJ 644 (SC}; Sasa Musa Sugar Mills (P) Ltd v. Shobati Khan,
AIR 1959 SC 923.
18 Andhra Scientific Co. Ltd v. A Sheshagiri Rao, AIR (1967} SC 408.
19 A Rodrick v. KC Thapar, (1963} 1 LLJ 248 (SC}; Hornsby (P) Ltd v. TB Kadam, (1976) 3 SCC 71.
20 See Lalla Ram v. DCM Chemical Works Ltd, (1978) 1 LLJ 507; Banaras Electric Light & Power Co. v.
Labour Court, (1972} 2 LLJ 328 (SC}.
21 Eastern Electric & Trading Co. v. Baldev Lal, (1975) 4 SCC 684.
22 Bombay Garage (Ahmedabad) Ltd v. Its Workmen, (1961} 2 LLJ 40 (Gujarat).
23 J K Hosiery Factory v. LAT, (1956) 2 LLJ 4 (Allahabad}.
24 Assam Oil Company v. Its Workmen, (1960} 1 LLJ 587 (SC}.
564 • Industrial Relations and Labour Laws

is based on misconduct of which according to the employer the employee has

beenguilty,and thatwould make the impugned discharge a punitive dismissal.
Section 2 (ra) read with Fifth Schedule of the Industrial Disputes Act, 1947, which defines
and enumerates 'unfair labour practice' inter alia, declares any one of the following
practices to be an 'unfair labour practice' on the part of the employer:
(a) discharging or punishing a workman because he urged other workmen to join
or organize a trade union;
(b) discharging or dismissing a workman for taking part in any strike (not being a
strike which is deemed to be an illegal strike under this Act);
(c) discharging office-bearers or active members of a trade union on account of their
trade union activities.
And even the original Section 33 of the Industrial Disputes Act, 1947 which ran:

... Nor shall he (i.e.) the employer ... discharge, dismiss or otherwise punish any
such workman except for misconduct not connected with the dispute, make
it clear that the legislative use of the expression 'discharge' was confined to
those cases of termination of employment relationship only which were at the
instance of employer.
However, it was only after the 1950 Amendment of the Act that the distinction became
clear. The amended Section 33 read as follows:

No employer shall discharge or punish whether by dismissal or otherwise any

workman concerned in such dispute.
The above distinction has been retained in Section 33 of the Industrial Disputes Act, 1947,
which was substituted by 1956 Amendment Act. Indeed, it emphasizes that even though a
misconduct on the part of the workman might result in his discharge, if such termination
of service is in consequence of disciplinary proceedings, it may be called 'dismissal'.

A. Scope of Intervention
The Supreme Court has, through a plethora of cases, laid down the scope of tribunal's
intervention in the management's order of termination of service of workmen.
Buckingham and Carnatic Mills v. Its Workmen 25 is our starting point. In this case, the
labour appellate tribunal has ruled that requirement of bona fides is essential even in a case of
discharge by notice or payment in lieu thereof without assigning any reason. It has further
ruled that where termination of service is a colourable exercise of power or is a result of
victimization or unfair labour practices, the industrial tribunal would have jurisdiction to
intervene and set aside such termination of service.

25 Buckingham and Carnatic Mills v. Its Workmen, (1975) 4 SCC 684.

 Management of Disdpline and Disdplinary Procedure • 5 6 5

The aforesaid rule found the approval of the Supreme Court in Chartered Bank v.
Chartered Bank's Employees Union 26• The Court observed that this rule applies even in case
of discharge made under the provisions of a contract or standing orders or awards like a
bank award.
The above view was reiterated in Tata Oil Mills Co. Ltd v. Its Workmen 27 wherein Justice
Gajendragadkar formulated the following test for tribunal's interference in management's
action:

The test always has to be whether the act of the employer is bona fide or not. If
the act is mala fide or appears to be a colourable exercise of the power conferred
on the employer either by the terms of contract or by standing orders, then
notwithstanding the form of the order, industrial adjudication would examine
the substance and would direct reinstatement in a fit case28 •
The law on the above point has been summarized in L Michael Ltd v. Mis Johnson Pumps Ltd29•

The tribunals have the power and indeed the duty to x-ray the order and
discover its true nature, if the object and effect in the attendant circumstances
and the ulterior purpose be to dismiss the employee because he is an evil to
be eliminated. But if the management, to cover up the inability to establish by
an inquiry, illegitimately but ingeniously passes an innocent-looking order of
termination simpliciter, such action is bad and is liable to be set aside.
A survey of the aforesaid cases suggests that industrial tribunals have the power to determine
the real nature of management's orders. If the order is mala fide or unfair labour practice or
victimization, it cannot be sustained. But real difficulty arises where the standing orders of
a company specifically provide that workmen guilty of misconduct may be discharged. In
such a situation, it is open to the court to lift the veil and to hold an order of discharge to
be one of dismissal merely because there was misconduct.

B. Bona Fides of Management's Action

In Murugan Mills v. Industrial Tribunal 30, the management served a notice on the workman
under clause 17(1) of the standing orders which empowers the management to terminate the
services of a worker by giving 14 days' notice, terminating his services without obtaining the
approval of the industrial tribunal as required under Section 33(2)(b) of the Act. The notice
did not contain any reason for the termination31• The management however, stated before the
tribunal that the workman's services were terminated for dereliction of duty and adopting
go-slow tactics. On these facts, the Supreme Court held that this amounted to punishment
for misconduct and therefore, to pass an order under clause 17(1) of the standing orders in
such circumstances was clearly a colourable exercise of the power to terminate the services
of a workman under the provisions of the standing orders.

26 Chartered Bank v. Chartered Bank Employees' Union, (1960} 3 SCR 441.

27 Tata Oil Mills Co. Ltd v. Its Workmen, (1964) 2 SCR 125.
28 (1964) 2SCR 125 at30-131.
29 L Michael v. M/s Johnson Pumps Ltd, AIR 1975 SC 661; (1975) 1 LLJ 262.
30 Murgan Mills v. Industrial Tribunal, (1965) 2 SCR 148.
31 It is provided in the standing orders that employees can ask for reasons in such a case.
566 • Industrial Relations and Labour Laws

The above case may be distinguished from Gujarat Steel Tubes (supra) in two respects:
(i) there was a violation of Section 33(2)(b) and (ii) no reasons were communicated to the
workman.
Bombay Corporation v. Mavlankar 32 is yet another case. In this case, the services of a
clerk were terminated under standing order 26 on the ground that her service record was
unsatisfactory. The management, however, stated in the order of termination that she would
be paid one month's wages in lieu of notice and would be eligible for all benefits admissible
under the standing orders and service regulations of the undertaking. Under the standing
orders, powers were conferred on the employer: (i) to impose punishment for misconduct
following a disciplinary inquiry under clause (2) of standing orders 21 read with standing
order 23, and (ii) to terminate the services of the employee by giving one month's notice or
wages in lieu thereof under standing order 26. A question arose as to which one of the two
powers was exercised in this case. The Supreme Court observed:
(a) The power to terminate the service by an order of discharge simpliciter is distinct
from and independent of the power to punish for misconduct and standing orders
cannot be constructed so as to render either of these powers ineffective.
(b) Reasons for termination have to be communicated to the employee and those
reasons cannot be arbitrary, capricious or irrelevant but that would not mean that
the order of termination becomes punitive in character just because good reasons
are its basis.
The Court also pointed out that:

If the misconduct of the employee constituted the foundation for terminating

his service then it might be liable to be regarded as punitive but this proposition
was doubted in as much as even in such case, it may be argued that the
management has not punished the employee but has merely terminated his
service under standing order 26.
Thus, it clear that the Court was in favour of retaining the two distinct powers and
maintaining the sanctity of the standing orders.
In Municipal Employees' Union v. Additional Commissioner (Water), Delhi Water Supply
and Sewerage Disposal Undertaking 33, a question arose whether the employer can terminate
the services of a widow appointed on compassionate basis on her remarriage. The Delhi
High Court answered the question in negative because it is (i) illegal, (ii) contrary to public
policy of a welfare state and (iii) right to marry or remarry is an individual right and any
contract prohibiting it is not legal.
The Supreme Court in Gujarat Steel Tubes v. Gujarat Steel Tubes Mazdoor Sangh 34, had
an occasion to consider the scope of interference of tribunal and court in management's
action. The standing orders of the company specifically provided that a workman guilty
of misconduct may be discharged under MSO 23. Further, under MSO 23, the reasons for
the termination of service of a permanent workman have to be recorded in writing and
communicated to him. The management, however, acted under MSO 23 of the standing

32 (1978) 3 SCR 1000.

33 (1996) LLR 103 (Delhi).
34 Gujarat Steel Tubes Ltd v. Gujarat Steel Tubes Mazdoor Sabha, (1980) 1 LLJ 137 (SC).
 Management of Disdpline and Disdplinary Procedure • 5 6 7

orders. On these facts, the majority and minority arrived at diametrically opposite
conclusions. The majority found the management's action not bona fide and observed:

In all conscience and common sense, the discharge is punishment for the
misconduct. The management minces no words. What is explicitly stated is
not a colourless farewell to make way for fresh hands to work in the factory
until the strike is settled but a hard-hitting order with grounds of guilt and
penalty of removal 35 •
From the above, it concluded:

The inference is inevitable, however, ingenious the contrary argument, that

precisely because the management found the workmen refractory in their
misconduct, they were sacked. May be, the management had no other way of
working in the factory but that did not change the character of the action taken.
Once we hold the discharge punitive, the necessary consequence is that inquiry
before punishment was admittedly obligator and confessedly not undertaken.
The orders were bad on this score alone.
On the contrary, the minority arrived at a different conclusion:

The management made it clear that in spite of such misconduct, it had no

intention of punishing the workers who were given not only the benefit of an
order of discharge simpliciter but also the option to come back to work within
a specified period in which case they would be reinstated with full benefits. An
intention 'not to punish' could not be expressed in clearer terms and is further
made out from the fact that more than 400 workers who resumed duty were
reinstated without break in service. In passing the orders of discharge, the
management did nothing more than act under MSO 23 and its action cannot
be regarded as amounting to dismissal in the case of any of the workers36•
Even so, the majority decision is a landmark from two points of view. In the first place,
the majority of the Supreme Court approved the earlier trend to lift the veil to determine
whether the order of discharge amounted to simple termination or punitive dismissal
notwithstanding the provisions in the standing orders empowering the management, inter
alia, to discharge workman found guilty of misconduct. In the second place, the Supreme
Court rejected 'the theory of community guilt and collective punishment' and instead ruled
that no worker shall be dismissed save on the proof of his individual delinquence.
There are however, few puzzling features of the majority decision.
First, the Court's assumption that what is not dismissal is retrenchment provided there
is work to be done ignores reality. The assumption reduces the management's prerogative to
terminate the services of workmen only in two ways, namely, retrenchment and dismissal
and excludes discharge. This would thus make the use of the word 'discharge' in Sections
2-A and 33 useless appendage besides thwarting the scheme of the Act.
Second, the majority decision leaves the management to choose between the frying pan
and the fire. 'If the management discharges the workers to facilitate fresh recruibnent and

35 Id. at 153.
36 Id. at 184.
568 • Industrial Relations and Labour Laws

save the factory from statutory takeover 37, it is not allowed to do so because an elaborate
inquiry' is not done. On the contrary, if the employer does not discharge the strikers and
does not allow the adamant strikers to return to work and leaves them to tell the Central
Government that for 3 months, there had been no production and so the mill should be
taken over as 'sick' under the Industrial Development Regulation Act' 8 will bring the
industry to a standstill. The majority, however, brushed aside the problem by saying 'may
be the management had no other way of working the factory but that did not change the
character of the action taken39.'
Third, the majority decision laid undue emphasis on the motive of the employer to
determine whether the discharge effected by management amounted to discharge simpliciter
or punitive discharge. We agree with the majority view that 'the employer cannot pass
a real order of dismissal in the garb of one of discharge'. But it is difficult to support the
view that 'merely because the motive behind discharge was a misconduct attributed to the
employee, the services of no employee could be terminated without holding an inquiry as
is contemplated by the standing orders. This line of thinking is also in conformity with the
decision in Parshotam Lal Dhingru v. Union of India 40 that the government cannot terminate
the service of a government servant unless it is entitled to do so by virtue of a special term
of contract of employment, e.g., by giving requisite notice by the contract or by the rules
governing the conditions of service.
Further, the majority decision, it is submitted, has brushed aside the decisions in Tata
Engineering and Locomotive Co. Ltd, Workmen of Sudder Office v. Management and Municipal
Corporation of Greater Bombay41 , on the ground that it did not run counter to its findings. We
submit that the decision of majority in Gujarat Steel Tubes runs counter to these decisions.
Further, even the decision in Murugan Mills and L Michael v. Johnson, which the majority
heavily relied upon, may be distinguished from Gujarat Steel Tubes on the facts.
Fourth, another impact of the majority decision in Gujarat Steel Tubes case is that even
if the employer wishes to give concession to the workmen by taking a lenient view in case
of misconduct not by way of dismissal but by way of termination simpliciter, he cannot do
so. Be that as it may, the majority decision in Gujarat Steel Tubes illustrates some complexities
of judicial process. To begin with, someone has to identify the benefits and disadvantages
flowing from the decision and its implementation in both short and long run. For instance,
strikers would welcome the decision because it would secure them from the risk of losing
their jobs and thereby protect them from unemployment. But management and a section of
the public could well differ as to whether this view would better serve the public interest.
In the long run, the decision would deprive the management from dismissing workmen
and recruiting new hands till an inquiry is conducted. This would bring the industry to a
standstill and would encourage indiscipline. This is likely to jeopardize not only the interest
of employers but also of consumers. However, the majority view, namely:

37 Gujarat Steel Tubes Ltd v. Gujarat Steel Tubes Mazdoor Sabha, (1980) 1 LLJ 137.
38 (1980) 1 LLJ 137.
39 Id. at 152.
40 Parshotam Lal Dhingru v. Union of India, (1958) SCR 828. This case was relied upon by the majority
in some other context.
41 Tata Engineering and Locomotive Co. Ltd v. S C Prasad, (1969) 2 LLJ 799; Workmen of Sudder Office v.
Management, (1979) 2 LLJ 620; Municipal Corporation of Bombay, (1978) 2 LLJ 168 (SC).
 Management of Disdpline and Disdplinary Procedure • 5 6 9

In a country where the despair of government is appalling unemployment,

it is a terrible tragedy to put economic death to 853 workmen. And for what?
For insisting that pittance of ~'100 per month be raised in terms of the Central
Wage Board's recommendations.
is not only leaning towards but is also against management, particularly in the light of the
following observations:

May be, the management had no other way of working the factory but that
did not change the character of the action taken.
Thus, the choice actually made by majority had, in effect, failed to strike a balance between
security of tenure which alone can ensure an efficient labour force and the interest of
maintenance of discipline in the industry. It is needless to add that both are equally important
for economic progress.

C. Loss of Confidence
In Tata Engineering and Locomotive Co. Ltd v. SC Prasad42, the management discharged a
workman from service on the ground that it had lost confidence in him and his continuance
in service was prejudicial to the company's interest. This discharge was, however, made
under standing order 47 (which empowered the company to terminate the services of any
worker on giving notice or wages in lieu thereof) in preference to disciplinary action. On
these facts, a question arose whether discharge was proper or justified. Speaking for the
Court, Justice Shelat observed:

The company had two alternatives; either to act under standing order 47 or
to take disciplinary action and hold a domestic inquiry. But the latter course
would have meant that the company would have to launch an inquiry almost
parallel to the one which was going on before the committing magistrate.
If the company, in the circumstances, preferred the former, it would not be
reasonable to say, as the tribunal did, that the company should have charged
the workman with misconduct and held an inquiry. The fact that it did not do
so but exercised its power under standing order 47 cannot render the order mala
fide or one passed in colourable exercise of its power to discharge a workman
from the service if such power was properly exercised.
Workmen of Sudder Office v. Management43 is a case of loss of confidence. The management
discharged a head godown clerk and asked him to collect one month's pay in lieu of notice
and other benefits under clause 944 of the standing orders on the ground of loss of confidence.
The labour court found that the workman was guilty of dishonesty in connection with the
company's property and would constitute 'misconduct' under clause 10(2)(a) of the standing
orders and therefore, held that the management's order of termination was really one of
dismissal for misconduct. The labour appellate tribunal accordingly directed reinstatement.
The High Court reserved the order of the labour court and held that the management's

42 Tata Engineering and Locomotive Co. Ltd v. S C Prasad, (1969} 3 SCC 372.
43 Workmen of Sudder Office v. Management, (1971} 2 LLJ 620 (SC}.
44 Under clause 9, the management is empowered to terminate the services of workmen by paying
the specified wages in lieu of notice, wages earned and other dues.
570 • Industrial Relations and Labour Laws

order was of termination simpliciter under clause 9. On appeal, the Supreme Court upheld
the order of the High Court and observed:
Though prima fade it may appear that the management in this case was charging
the workman in respect of matter which may be misconduct under the standing
orders, ultimately we are satisfied that the management has passed the order of
termination sh~liciter and the order does not amount to one of dismissal by way
of punishment .
L Michael v. Johnson Pumps Ltd46 is also a case of discharge for loss of confidence. The
management discharged a permanent worker by giving him one month's notice pay as
per the terms of employment and relevant standing orders. Before the labour court, the
management had lost confidence in him. However, the employer did not disclose the
grounds on which the suspicion arose in 1968. Further after 1968, the worker was given
two extra increments. On the other hand, the worker claimed that he had been victimized
for his trade union activities. The labour court upheld the order of the management but the
Supreme Court found that the impugned management's action was not bona fide. Justice
Krishna Iyer relying upon Murugan Mills case ruled:

The tribunal has the power and indeed, the duty to x-ray the order and
discover its true nature if the object and effect of the attendant circumstances
and the ulterior purpose is to dismiss the employee because he is an evil to
be eliminated.
The Lordship extended the application of the aforesaid rule in loss of confidence:

Loss of confidence is no new armoury for the management, otherwise security

of tenure, insured by the new industrial jurisprudence and authenticated by a
catena of cases, can be subverted by this new formula.
His Lordship, therefore, set aside the order of the labour court and directed reinstatement
to the aggrieved worker.

A. Principles of Natural Justice

It is recognized that the essence of justice is largely,grocedural and the history of liberty has
largely been the history of procedural safeguards . In legal terms, the inquiry conducted
by the employer must be in accordance with the principles of natural justice. The two well-
established and recognized principles of natural justice are (a) Nemo debet esse judex in propria
sua causa (no man must sit in judgement in his own cause or in which he is interested) and (b)
audi alteram partam (the parties must be heard). But it is equally well-settled that the concept
of 'natural justice' is not a fixed one. It has meant many things to many writers, lawyers,
jurists and systems of law. It has many colours, shades, shapes and forms. Rules of natural
justice are not embodied rules and they cannot be imprisoned within the straightjacket

45 Workmen of Sudder Office v. Management, op. cit.

46 L Michael v. Johnson Pumps Ltd, AIR 1975 SC 661; (1975) 1 LLJ 262.
47 Chakravorty and Chakravarty, Law of Employees' Victimization. (1966) 52.
 Management of Discipline and Disciplinary Procedure • 5 7 I

of a rigid formula 48 . Applying these principles, the Supreme Court has held in a series of
cases that where a case of dismissal or discharge of an employee is referred for industrial
adjudication, the labour court or tribunal should first decide as a preliminary issue whether
proper domestic inquiry has been conducted and the principles of natural justice have been
complied with. Thus, Lord Hewart's dictum that 'Justice should not only be done but should
manifestly and undoubtedly be seen to be done' 49 is realized to a considerable extent in
termination of service of workmen.
The recognized principles of natural justice have given rise to the following procedural
safeguards. The termination of services of workmen without following principles of natural
justice is wrongful.
1. Rule against bias
A cardinal rule of natural justice is that no man should be a judge in his own cause. This is
known as rule against bias. Bias means prejudice.

l
Conscious
T
In relation to
I
1
Unconscious

l
Parties
1
Issue

2. Audi Alteram Partem or Rule of Fair Hearing

Right to Notice
(i) Notice - Starting point
Unless a person knows the subject and the issue involved, he cannot defend himself.
(ii) Notice in order to be adequate, must contain:
a) Time and place of hearing
b) Authority under which hearing is to be held
c) Statement of specific charges which the person has to face
(iii) Test
a) Sufficient information
b) Sufficient material
c) Sufficient time
to enable the person to defend himself effectively.
(iv) Article 21 of the Constitution
a) Proceedings should be fair and reasonable

48 Rex v. Sussex Justices, (1924) 1 KB 256 at 259.

49 Managing Director, ECIL v. B Karunakar, JT 1993 (6) SC 1; See also Sarv UP Gramin Bank v. Manoj
Kumar, 2010 LLR 348.
5 7 2 • Industrial Relations and Labour Laws

b) No person shall be deprived of life and liberty without the procedure established
bylaw50•
Requirements of the Principles of Natural Justice
Principles of Natural Justice

1
l
Judge must be impartial
1
Judge must decide the
case objectively

Kinds of bias

1
l
Personal bias
l
Pecuniary
l
Subject
l
Deparbnental
1
Preconceived
bias matter bias bias notion bias

B. Charge-sheet
Before the management can dismiss a workman, it has to hold a proper domestic inquiry
into the alleged misconduct of such a workman and such an iniuiry must always begin with
supply of a specific charge-sheet to the delinquent employee 1. Such charges must clearly
mention the allegations against him. In dealing with the merits of dismissal of a workman,
the employer must confine the finding to the charges made and no extraneous factor would
form the basis of the action taken. It would not be open to the employer to add any further
charges against the employee and the case would have to be considered on the charge-sheet
as originally framed 52 • The essential requirements of charge-sheet are 53 :
(i) It must be specific.
(ii) It should contain full particulars of the misconduct and charges levelled against the
employee.
(iii) It must be actually served on the erring workman. Where such a charge-sheet has
not been served and the workman is dismissed, the order of dismissal is liable to be
rejected as opposed to natural justice54•
(iv) It should refer the relevant clause(s) of the standing orders under which the delinquent
is liable to be punished for the alleged misconduct.

50 Maneka Gandhi v. Union of India, (1978) 1 SCC 248.

51 See Punjab National Bank Ltd v. Its Workmen, (1959) 2 LLJ 666 at 679 (SC}; UCO Bank v. Rajinder LA:l
Capoor, (2007} 6 SCC 694; Chairman-cum-Managing Director, Coal India Ltd v. Ananta Saha, 2011 Lab
IC 2092 (SC).
52 Lakshmi Devi Sagar Mills Ltd v. Ram Sarup, (1957) 1 LLJ 17 (SC}.
53 See Ananthanarayanan v. SR, (1956) 1 LLJ 29 (Madras); Amulya Ratan Mukkerjee v. Deputy Chief
Mechanical Engineer, Eastern Railways, AIR 1961 Cal 40.
54 See Swami Oil Mills, (1953) 2 LLJ 78 (IT}.
 Management of Disdpline and Disdplinary Procedure • 5 7 3

(v) It should be issued under the signature of the disciplinary authority.

(vi) It should also refer to the name of the inquiry officer and time, date and place of the
inquiry.
A survey of decided cases55 reveals that when the charges levelled against the delinquent
officer in the charge-sheet are vague, not specific or definite; or are framed without giving
details of allegations, relevant documents and/or statutory provisions, standing orders or
service rules, the entire inquiry would be vitiated.
The following table provides guidelines for framing a charge-sheet.

l
Writing
I
Signed by
I
Charges
I
It must
I
Charges
IIf
I
Specific
1
Abuse
competent Ieveled specify the must not misconduct mention of (exact
authroity must be charges refer to habitual clause of word)
specific/ preliminary 'habitual' standing
precise inquiry must be order,service
mentioned CDArules,
CCSrules

(i) There is no objection in issue of fresh charge-sheet if the earlier one is withdrawn.
(ii) Modification, amendment and cancellation of charge-sheet can be resorted to in a
fair and just manner.
1. Who is competent to issue a charge-sheet
(i) The disciplinary authority shall draw up the charge-sheet.
(ii) The officer performing current duties as stop-gap arrangement in the absence of
disciplinary authority cannot exercise the statutory power of issuing charge-sheet56•
(iii)Appointing authority himself need not issue the charge-sheet.
(iv)Controlling authority can issue the charge memo and start disciplinary
proceedings57•
(v) The charge-sheet should not be signed in a routine manner. He is required to sign
only after applying his mind. He has to give some reason which may be very brief,
for initiation of inquiry58 •
(vi) The charge-sheet issued by a member of fact-finding inquiry committee which found
prima facie the delinquent guilty is bad in law. A member of fact-finding inquiry
committee is not competent to issue a charge-sheet as disciplinary authority59•
2. Effect of Delay in Framing Charge-sheet
In State of AP v. Radhakishan 60, the Supreme Court held that whether the delay vitiates the
proceedings is the question that has to be decided on the facts and circumstances of each

55 Anil Gilurker v. Bilaspur-Raipur Kshetria Gramin Bank, 2011 LLR 1121; Union Bank of India v. Gyan
Chand Chattar, (2009} 12 sec 78; Swami Singh v. State of Rajasthan, (1986} 3 sec 454.
56 V S Karnath v. State of Karnataka, 1988 (2) SLJ 241.
57 Commissioner of Police v. Jayasurian, (1997) 65 SCC 75.
58 See Union of India v. Prakash Kumar Tandon, (2009) 2 SCC 541; Chairman-cum-Managing Director, Coal
India Ltd v. Ananta Saha, 2011 Lab. IC 2592 (SC}.
59 Union of India v. S K Agarwal, (2005) 1 SLR 151.
60 AIR 1998 sc 1833; (1998} 4 sec 154.
5 7 4 • Industrial Relations and Labour Laws

case. In this case, the charges related to an incident which was about 10 years old and were
framed depending on the deparbnental records; there was no explanation why the inquiry
officer did not examine such records; and the delinquent was not contributing to the delay.
On these facts, the Supreme Court held that the charge-sheet was liable to be quashed.
In Mahadevan P V v. MD, Tamil Nadu Housing Board61 , the irregularities committed in
1990 came to the notice of the employer in the auditreport of 1994-95. However, the charge
memo was issued for the first time in 2000. Thus, there was delay of about 10 years or at
least 5 to 6 years on the part of the management even before the charge memo was issued.
In these circumstances, the Supreme Court held that the inquiry was liable to be quashed.
In Cantonment Executive Officer v. Vi jay D Wani 62 , 13 years had passed and no progress
was made and therefore, the division bench of the High Court refused permission to the
management to proceed further. When the matter came to the Supreme Court, 16 years had
passed. In view of this, the Court held that it would not be fair on the part of the management
to proceed afresh in the matter.
3. Service of Charge-sheet
The charge-sheet framed against a delinquent employee should be served on him personally
if possible and acknowledgement to that effect should be obtained from him. In case the
workman is absent, or if he refuses to accept the charge-sheet, the same should be sent to
his local and home address by registered post with acknowledgement due, after getting his
refusal attested by two witnesses. In case the charge-sheet is returned unserved with the
remarks 'refused' of the postal authorities, the same should be kept intact without opening.
It is then taken to be served. If the charge-sheet is returned by the postal authorities with
the remarks 'not found/not traceable', the same should be kept intact and other available
method should be exercised. In such a case, the employer should display the charge-sheet
on the notice board or act in accordance with the provisions of the standing orders. In some
cases, it may be necessary to publish the contents of the charge-sheet in a local newspaper
having wide circulation.
Bata Shoe Co. v. D N Ganguli 63 is a leading case on serving notice. In this case, the
standing orders of the company provided that the workman charged with an offence
should be supplied a copy of such charges. They also provided that a workman who
refuses to accept the charge-sheet should be deemed to have admitted the charges made
against him. There was no provision in the standing orders for affixing such charge-sheet
on the notice board of the company. On these facts, the Supreme Court held that affixing
of the charge-sheet on the company's notice board was not good service of notice. Justice
Wanchoo observed:

The proper course in our view, was when the registered notice came back
unserved in the case of these 11 workmen, to publish notices in their names
in some newspaper in the regional language with wide circulation in Bihar
with the charges framed against them.
From the above decision, it is clear that the law casts an obligation upon an employer to
send charge-sheets to workers by registered post and if the same is returned unserved, to

61 (2005) LLJ 527.

62 AIR 2008 SC 2953; (2009) 1 LLJ 26.
63 AIR 1961 SC 1158.
 Management of Discipline and Disciplinary Procedure • 5 7 5

get the charges published in a local newspaper in the regional language understood by the
workmen64.

C. Suspension Pending Inquiry

Where the charges levelled against a delinquent workman are of a serious nature and the
disciplinary authority feels that his physical presence might endanger the safety of other
workmen, or if it is apprehended that he might intimidate others or tamper with the evidence,
he may be suspended. During the period of suspension pending inquiry, the workman will
get subsistence allowance as per rules.
The following rates of subsistence allowance are admissible.
UNDER SERVICE RULES UNDER ST ANDING ORDERS
For first six months - For first 90 days -
½ of basic pay + DA + HRA + CCA ½ of basic pay + DA + other allowances
Beyond six months - Beyond 90 days -
¼ of basic pay + DA + HRA + CCA ¾ of basic pay + DA + other allowances
If it is delayed not due to fault of the delinquent, If inquiry by outside agency -
then ¾ of the wages (i) First 180 days - ½ wages
(ii) Beyond 180 days - ¾ or ¼ wages
Subsistence allowance: In Jagdamba Prasad Shukla v. State of UP 65, the Supreme Court held
that payment of subsistence allowance under suspension is not a bounty. Non-appearance
before the inquiry officer for want of subsistence allowance was justified. The Court therefore,
quashed the order of punishment of removal.
The Court also ruled that non-payment of subsistence allowance amounted to denial
of reasonable opportunity to defend oneself in the departmental inquiry and hence was
violative of principles of natural justice.

D. Explanation
The next requirement for a proper domestic inquiry is to give an opportunity to concerned
workman to submit an explanation. If no opportunity is given to the workman to explain his
conduct, it will amount to violation of principles of natural justice66. Further, the workman
must be allowed sufficient time and the inquiry must not conclude unless the time given
for the explanation expires.
Four contingencies67 may arise in the explanation. The workman may (i) admit the
charge, show repentance and plead that he will not repeat it; (ii) refute the charge; (iii)
ask for extension of time for submitting explanation; or (iv) not submit the explanation
at all. Where the concerned workman admits his guilt, further inquiry is not essential. In
such cases, the management may award appropriate punishment according to the nature

64 See Aggarwal, 0 P, Conditions of Employment and Disciplinary Action against Workmen, (1969) 320.
65 AIR 2000 SC 2806.
66 Swadeshi Industries Ltd v. Its Workmen, (1960) 2 LLJ 78 (SC); Indian General Navigation and Rly Co. Ltd
v . Its Workmen, (1960) 1 LLJ 13 (SC).
67 See Aggarwal, 0 P. Conditions of Employment and Disciplinary Action Against Workmen. (1969) 320.
5 7 6 • Industrial Relations and Labour Laws

of the misconduct. If the workman pleads not guilty of the charges levelled against him,
management has to examine the explanation offered by him and hold a proper domestic
inquiry; but if it is satisfied with the explanation, it may drop the proceedings against
the workman. In the third situation, the employer may extend the time he considers
reasonable. Prudence demands that whenever a workman asks for extension of time
for submission of his explanation, unless there are compelling reasons to the contrary,
reasonable time should be allowed 68 • In the last situation, as a normal rule, the refusal
by an employee must go against him, but the rules of natural justice require that even in
such cases, charges must be proved by the management before it can take action against
the workman.

Having considered the explanation submitted by the concerned workman, the management
must hold a domestic inquiry to prove the allegations levelled against the workman
mentioned in the charge-sheet supplied to him. It is expected to conduct a proper inquiry in
accordance with the provisions of the standing orders (where applicable) and the principles
of natural justice. Further, the inquiry must be fair and just.
A. Processes Involved in Domestic Inquiry
(i) Preliminary inquiry: optional
(ii) Show-cause notice, if provided for: optional
(iii) Consideration of explanation
(iv) Notice of inquiry
(v) Holding of domestic inquiry
(vi) Report of the inquiry officer
(vii) Supply of copy of inquiry report to disciplinary authority
(viii) Consideration of the report by the disciplinary authority
(ix) Order of punishment and its communication
(x) Appeal
Let us discuss them.
Preliminary Inquiry
1. When required
(i) In case of interpersonal or inter-group misconduct
(ii) If there are cross-complaints from two persons or groups
(iii)If there is a reason to believe that the complaint is frivolous
(iv)If misconduct is not precisely definable (in terms of its time or persons involved)
(v) If there is a need for additional material before determining whether a proper
disciplinary action is warranted
2. Nature and scope
(i) It is a fact-finding exercise.

68 Ibid.
 Management of Disdpline and Disdplinary Procedure • 5 7 7

(ii) It does not per se lead to establishment of guilt.

(iii) It can be ordered by any officer.
(iv) It may be oral or in writing.
(v) It may involve examination and/or recording of statements of any person who
is believed to have knowledge of the act.
(vi) It merely forms the basis for deciding whether there is prima facie case.
(vii) Finding cannot be used to punish anyone.
B. Order for Holding Inquiry
As mentioned above, after consideration of the explanation of the charge-sheeted workman
or when no reply is received within the specified time limit, the disciplinary authority may
issue an order appointing an inquiry officer or an inquiry committee.
C. Appointment of Inquiry Officer
The inquiry officer can be an official of the company but he should ordinarily be senior in
rank to the charge-sheeted employee. Merely because the officer conducting the inquiry
belongs to or is a part of the management, presumption of institutional bias cannot be
inferred. Deparbnental bias arises when the functions of the judge and the prosecutor are
combined in the same deparbnent and it is not uncommon to find that the same deparbnent
which initiates the matter also decides it and, therefore at times, deparbnent fraternity and
loyalty militates against the concept of fair hearing. But merely because the company lawyer
was also the inquiry officer, he cannot be considered to be partial towards the management
of the company69•
In the absence of any material to show that the inquiry officer was in any way prejudiced
or influenced by the rank of the presiding officer, the inquiry cannot be held to be unfair.
Further, he should be disinterested in the case and should not be biased. Moreover, he
should not be an eye witness to the incident. If some incriminating act of the delinquent has
been witnessed by the officer, he should not be appointed as the inquiry officer7°. However,
difficulty may arise in small establishments where there are few supervisory officials and a
totally disinterested person may not be available for conducting the deparbnental inquiry.
In such a situation, engagement of an outsider, may be an advocate, for conducting the
inquiry may not be improper71 •
Can an advocate be appointed as inquiry officer?
In Management of Thanjavur Textiles Ltd v. Purushotam 72 , the relevant portion of the
standing orders in sub-clause (c) of clause 62 provided that the manager may himself
or through 'other responsible officer' make such inquiry and the workman shall present
himself at the time and date fixed for such inquiry. It was contended that under clause 62,
the words 'other responsible officer' referred to in this case could only be an officer of the
company subordinate to the manager and not an outsider, and hence an advocate could
not have been appointed as inquiry officer nor could he give findings on the merits of the
misconduct. Rejecting the contention, the Supreme Court held that under the standing
orders, an advocate can be appointed as inquiry officer.

69 Biecco Lawrie Ltd v. State of West Bengal, (2009} 10 SCC 32.

70 State of Uttaranchal v. Kharak Singh, 2008 LLR 170 (SC}.
71 Dalmia Dadri Cement Co. v. Murari Lal Bikaneria, (1970) 1 LLJ 416 (SC}.
72 1999 (2) SCALE 216.
57 8 • Industrial Relations and Labour Laws

D. Appointment of Presenting Officer

For the departmental inquiry to be impartial, disciplinary authority is required to appoint
a presenting officer to sponsor the management's case before the inquiry officer73 •
E. Assistance to the Delinquent Worker
It is now well settled in a series of cases decided by the courts that the delinquent officer
should be given adequate facility to defend himself in a domestic inquiry74•
F. Notice for Holding Inquiry
One of the essential features of a fair hearing is that a person should be served with a proper
notice, i.e., a person has a right to notice. Notice should be clear and precise so as to give the
other party adequate information of the case he has to meet and make an effective defence 75 •
While disciplinary authority is required to intimate after considering the explanation about
holding of inquiry by a specified inquiry officer, the latter is required to issue detailed notice
of inquiry. This notice should clearly mention the date, time and place of inquiry. It should
ask the delinquent workman to present himself with his witnesses/ documentary evidence,
if any, for the inquiry. The notice should also mention that if the workman fails to attend
the inquiry on the appointed date and time, the same will be held and decided ex-parte.
A reasonable period of time should be given to the workman for preparing his defence.
G. Procedure to be Followed by the Inquiry Officer
Before starting the inquiry, the officer should ensure the receipt of following documents:
(i) Charge-sheet
(ii) Reply to the charge-sheet
(iii) List of witnesses
(iv) Statements of witnesses, if any, recorded during the preliminary inquiry
(v) List of documents by which charges are to be proved
(vi) Order appointing the inquiry officer and presenting officer
At the commencement of the inquiry, if the charge-sheeted employee is present, the inquiry
officer should record the date, time and place of the inquiry, names of persons present and
obtain their signatures on the order-sheet. Thereafter, he should proceed as follows:
1. Read out and explain the charges and the reply of the charge-sheeted employee and get
his confirmation to that effect. In case the charges are admitted, it should be recorded
and signatures of all concerned along with date should be taken. A full-fledged inquiry
need not be held if the misconduct is of a minor nature. In case the charge, if proved, is
serious enough to warrant discharge or dismissal, the proper course is to hold an inquiry.
2. If the charge-sheeted employee denies the charge, the following procedure should be
followed.
(a) Allow inspection of listed documents by the charge-sheeted employee.
(b) Ask the charge-sheeted employee to submit a list of witnesses to be examined on
his behalf.
(c) List of documents should be given by the charge-sheeted employee.

73 Workmen of Buckingham and Carnatic Mills, (1970) 1 LLJ 26.

74 (1999) 2 SCALE 216.
75 See Biecco Lawrie Ltd v. State of West Bengal, (2009) 10 SCC 32.
 Management of Disdpline and Disdplinary Procedure • 5 7 9

(d) Charge-sheeted employee should intimate the inquiry officer about the defence
assistant.
(e) Copies of all listed documents should be given to the charge-sheeted employee. If
they are bulky, he should be given the facility of making notes.
(f) Copies of the previous statements of witnesses should be given to the charge-
sheeted employee if prosecution proposes to use them in inquiry.
H. Other Steps Involved in Domestic Inquiry
(a) The inquiry officer will explain the procedure to be followed by him in the inquiry.
(b) The presenting officer first leads evidence against the delinquent in support of the
charges by producing witnesses and documentary evidence. However, no leading
questions are asked at the time of this examination-in-chief. The charge-sheeted
employee or his defence assistant is to be given an opportunity to cross examine
each management witness. In case he declines to cross examine any witness, an
endorsement to that effect is recorded by the inquiry officer.
(c) The charge-sheeted employee is then asked to produce his own witnesses one by one
and the presenting officer is allowed to cross examine them. When an application
is filed for summoning witnesses by the delinquent officer, it is obligatory on the
part of the inquiry officer to pass an order on such an application. However, if the
presenting officer is not appointed in an inquiry and that the questions are put to
the witnesses by the inquiry officer, this will not vitiate the inquiry76•
(d) The charge-sheeted employee is asked to give his statement after his witnesses
have been examined and cross examined. He may also produce documentary
evidence, if any. In case the delinquent employee declines to produce any witness
or documentary evidence or declines to give a statement, the inquiry officer makes
a record to that effect in the charge-sheet and obtains signatures of all concerned.
If the inquiry remains incomplete in the first sitting and some more witnesses are
required to be examined, it may continue on any other day mutually agreed upon
by both sides. In such a case, the inquiry officer should make a suitable endorsement
in the order-sheet and obtain signatures of all.
(e) The inquiry officer shall obtain on each page of the inquiry proceedings, the
signatures with date of the charge-sheeted workman, his representative, if any, the
concerned witness and the management's representative. The concerned witness
should sign on each page of his statement only. The inquiry officer will sign on
each page of the proceedings after endorsing that the statement has been recorded
by him and explained to the parties in their language before they were asked to
sign. If the delinquent employee refuses to put his signature, the inquiry officer
should make an endorsement to that effect and get it attested by others present.
(f) After the evidences are recorded, both parties sum up their cases by placing oral
or written arguments or both in support of their case.
(g) The inquiry officer then closes the proceedings.
(h) Finally, the inquiry officer writes his findings/report.

76 Union of India v. Prakash Chandra Tandon, 2009 (121) FLR 556 (SC); P V Gramin Bank v. D M Parmar,
2011 (131) FLR 1019.
580 • Industrial Relations and Labour Laws

While conducting an inquiry, the inquiry officer acts as a quasi-judicial body. In view of
this, he is required to follow the principles of natural justice and fair play in disciplinary
inquiry. Thus, when an application is filed for summoning the witnesses bJ the delinquent
officer, it is obligatory on his part to pass an order on such an application . Moreover, the
inquiry officer is fully competent to control and regulate the inquiry proceedings and may
refuse to examine witnesses who appear to be irrelevant provided he records in writing
the reasons for doing so78 •
I. Findings and Report of Inquiry Officer
After close of the inquiry, the inquiry officer is required to give his findings on each charge
together with an analysis of evidence brought before him so that his reasons for coming
to the conclusion are clear to all. He cannot, however, make any recommendation about
the penalty to be imposed. He will then submit the report to the disciplinary authority79•
J. Ex-parte Inquiry
A survey of decided cases reveals where the ex-parte inquiry is justified and where it is not.
Ex-parte inquiry has been held to be justified in the following cases:
1. If the delinquent takes a non-cooperative attitude 80
2. When the employee puts up false excuses for not being able to get a defense assistant81
3. Where the intimations were served to the charge-sheeted employee by registered post
and were 'refused' to be received 82
4. Where the charge-sheeted employee adopted non-cooperative attitude with a view to
frustrate the inquiry despite several notices83
5. Where the charge-sheeted employee wanted to cross examine the prosecution witness
only after the examination-in-chief of all the witnesses84
6. Where the delinquent employee attended inquiry on one occasion but refused to attend
on the next date on the ground of denial of legal representation85
7. When the delinquent failed to appear in spite of notice by the inquiry officer 86
The inquiry officer must allow the delinquent to attend the inquiry at any stage whether
his absence earlier from the inquiry proceedings was justified or not. He should be given
due notice to submit his brief after sending a copy of the brief of PO to him, even if he does
not attend the inquiry.
Even in ex-parte proceedings, the inquiry officer should provide opportunity to inspect
listed documents and to submit the list of defence documents, arrange for examination-in-

77 Narinder Mohan Arya v. United India Insurance Co. Ltd, 2006 (109} FLR 705 (SC); Union of India v.
Prakash Kumar Tandon, 2009 (121} FLR 542 (SC}; P V Gramin Bank v. D M Parmar, 2011 (131) FLR
1019.
78 See Usha Breco Mazdoor Sangh v. Management of Usha Breco Ltd, 2008 LLR 619 (SC}.
79 AIR 1966 SC 269.
80 Union of India v. H C Sarin, AIR 1976 SC 1686.
81 KN Gupta v. Union of India, AIR 1968 Delhi 85.
82 Ankulaiah v. DG, P&T, SLJ (1986} CAT 407.
83 Ram Prasad v. Union of India, (1988) ATC 77.
84 Bank of India v. Apurba Kumar Saha, (1994) sec 615.
85 Biecco Lawrie Ltd v. State of West Bengal, (2009} 10 SCC 32.
86 State of UP v. Saroj Kumar Sinha, AIR 2010 SC 313; Chairman-cum-MD, Coal India v. Ananta Saha, 2011
Lab. IC 2592 (SC}.
 Management of Disdpline and Disdplinary Procedure • 5 81

chief, cross examination with notice to the charged employee at every stage and even ask
him to submit the defence brief87.
Ex-parte inquiry has been held to be invalid in the following cases:
1. Where the charge sheet has not been delivered and acknowledged 88
2. Where the charged employee has not been supplied with copies of the relevant
documents to prepare his defence effectively89
3. Where the inquiry officer, after receipt of letter from the delinquent in which certain
allegations were leveled against him, abruptly closed the inquiry and proceeded
ex-parte90
K. Inquiry on Holidays
I. The management is entitled to hold inquiry on a holiday and in the absence of an
application for adjournment, the inquiry officer is competent to proceed ex-parte
against the workman91 •
L. Attending Inquiry during Leave Period
I. The delinquent employee who has been granted leave is entitled to adjournment.
II. The representative of the management appearing before the inquiry should inform
this fact to inquiry officer.
III. The inquiry officer should not, therefore, proceed ex-parte92 •
M. No Disciplinary Action for Misconduct not Specified in the Standing Orders
The Supreme Court successively in a number of cases has held that no disciplinary action
against a delinquent employee can be initiated or taken in respect of an act/misconduct
not defined in the standing orders under the Industrial Employment (Standing Orders)
Act, 1946 or the other service rules or regulations or even where such acts or omissions and
commissions are vaguely defined 93 •
N. Consideration of the Report of the Inquiry Officer by Disciplinary Authority
The Supreme Court in a catena of cases has held that the disciplinary authority must be
the competent authority. The jurisdiction of the disciplinary authority shall be determined
with reference to the company /unit where the alleged misconduct was committed 94 • If
the disciplinary authority agrees with the findings of the inquiry officer, he shall make
a decision in regard to quantum of punishment to be imposed upon the charge-sheeted
employee. However, the punishment imposed by him should not be disproportionate to
the misconduct committed by the delinquent. In case of disagreement, the disciplinary
authority is required to record:

87 JP Srivastava v. Union of India, (1977) Lab. NOC 134.

88 Amal Kumar Parial v. Union of India, (1989) ATC 679.
89 Raizada Trilok Nath v. Union of India, AIR 1967 SC 759.
90 Thulasingaraj v. CPF Commissioner, AIR 1987 SC 194.
91 Shiv Durga Iron Works Ltd v. Its Workmen, 2 FLR 200.
92 M Muniswami v. Superintending Engineer, Vellore Electricity, (1969) ILLJ 89.
93 Glaxo Lab (India) Ltd v. PO, Labour Court, AIR 1984 SC 505; AL Kalra v. Project & Equipment Corporation
of India, 1984 LIC 961 (SC); Rasiklal V Patel v. Ahmedabad Municipal Corporation, (1985) FJR 225 (SC)
1995LLR8.
94 Chairman-cum-MD, Coal India Ltd v. Ananta Saha, 2011 Lab.IC 2592 (SC).
5 8 2 • Industrial Relations and Labour Laws

(i) The reasons for disagreement to each charge. This is a mandatory requirement to
be complied with95 •
(ii) His own findings if sufficient evidence is available on record for such an exercise.
(iii)Remit the case to the inquiry officer for further inquiry and report96•
If the disciplinary authority differs with the view taken by the inquiry officer, he is bound
to give a notice setting out his tentative conclusions to the delinquent employee. It is only
after hearing the delinquent employee that the disciplinary authority would at all arrive at
a final finding of guilt. Thereafter, the delinquent employee would again have to be served
with a notice relating to the punishment proposed 97•
The disciplinary authority in exercise of discretion to impose punishment must take into
consideration a host of factors such as (i) gravity of misconduct (ii) past conduct (iii) nature
of duties assigned to the delinquent (iv) responsibilities of the position that the delinquent
holds (v) previous penalty, if any, and (vi) the discipline required to be maintained in the
department or establishment he works in98 •

Appellate/Reviewing Authority
The service rules or the standing orders may provide for filing appeals or review. An order
of the appellate authority should be a reasonable order whether the appeal is allowed or
dismissed. Whenever there is an appellate order, the order passed by the lower authority
merges into the order passed by the appellate authority. It is the order of the appellate
authority which gives cause of action to the employee to institute any legal proceedings.
Period of limitation and territorial jurisdiction of the courts:
If the service rules provide for appeal, the cause of action arises only after the appeal is
disposed of. Appeal must be filed within the period of limitation.

The right of a delinquent to be defended by a lawyer in a domestic inquiry in labour cases

has undergone material change since the Supreme Court decision Kraipak's99 case. Thus, in
Board of Trustees, Port of Bombay v. Dilip Kumar 100, Justice D A Desai opined:

We have reached a stage in our onward march to fair play in action that wherein
an inquiry before a district tribunal, the delinquent officer is pitted against a
legally-trained mind, if he (the delinquent) seeks permission to appear through
a legal practitioner, the refusal to grant this request would amount to denial of

95 Punjab National Bank v. Kunj Behari Mishra, (1998} 7 SCC 84; KL Ahuja v. State of Haryana, 2011 (2)
SLR497.
96 Bank Of India v. Dagala Suryanarayana, 1999 LLR 1073 (SC}.
97 Lal Nigam v. Chairman & MD, ITI Ltd, (2007} 1 LLJ 223 (SC}; See also Anil Giluker v. Bilaspur-Raipur

Gramin Bank, 2011 LLR 1121 (SC}.

98 Administrator, Union Territory ofDadra and Nagar Haveli v. Gulabhia M Lad, 2010 (125) FLR 880 (SC};

See also Panchmahal Vadodra Gramin Bank v. D M Parmar, 2011 (131} FLR 1019 (SC}.
99 AK Kraipak v. Union of India, AIR 1970 SC 150.
100 AIR 1983 SC 109.
 Management of Disdpline and Disdplinary Procedure • 5 8 3

a reasonable request to defend himself and the essential principles of natural

justice would be violated 101 •
In J K Aggarwal v. Haryana Seeds Development Corporation Limited 102 , Rule 7(5) of the
Haryana Civil Service Appeal Rules, 1952 provides that if the charge or charges are likely
to result in dismissal of the person from the service of the government, such person may,
with the sanction of the inquiry officer, be represented by counsel. The Supreme Court,
while interpreting this rule held that where the presenting officer was a person with legal
attainments and experience and the employee had no legal background, the refusal of the
service of a lawyer to the delinquent amounts to denial of natural justice. The Court also
held that the legal advisor or lawyer for this purpose should be liberally construed and
must include 'whoever assists or advises on facts and law must be deemed to be in the
position of legal advisor'.
But in Harinarayan Srivastava v. United Commercial Bank103, the Supreme Court held
that the refusal of inquiry officer to permit representation by an advocate even when the
management was being represented by a law graduate will not be violative of principles
of natural justice as the charges were simple and not complicated.
The matter again came to be considered by a three1udge bench of the Supreme Court
in Crescent Dyes and Chemicals Ltd v. Ram Naresh Tripathi 04• The Court upheld the statutory
restrictions imposed on the delinquent's choice of representation in the domestic inquiry
through a lawyer or an agent. The Court observed:

Ordinarily, it is considered desirable not to restrict this right of representation

by counsel or an agent of one's choice but it is a different thing to say that such
a right is an element of principles of natural justice and denial thereof would
invalidate the inquiry. Representation through counsel can be restricted by
law as for example, Section 36 of the Industrial Disputes Act, 1947 and also by
certified standing orders. In the present case, the standing orders permitted
an employee to be represented by a clerk or a workman working in the same
department as the delinquent. So also the right to representation can be
regulated or restricted by statute.

The right to representation has been made available in a restricted way to a delinquent
employee. In Rule 14(8) of the Central Civil Services (Classification, Control and Appeal)
Rules, 1965 also an employee has been given the choice of being represented in the
disciplinary proceedings through a co-employee.
In Kalindi v. Tata Engineering and Locomotive Company Ltd105, a three-judge bench observed
asunder:

101 Id at 113.
102 1991 Lab. IC 1008.
103 1997 LLR 497 (SC).
104 (1993) 2 sec 21s.
105 AIR 1960 SC 914: (1960) 3 SCR407.
584 • Industrial Relations and Labour Laws

Ordinarily, in inquiries before domestic tribunals, the person accused of any

misconduct conducts his own case. Rules have been framed by the government
as regards the procedure to be followed in inquiries against its employees. No
provision is made in these rules that the person against whom an inquiry is
held may be represented by anybody else. When the general practice adopted
by domestic tribunals is that the person accused conducts his own case, we are
unable to accept an argument that natural justice demands that in the case of
inquiries into a charge-sheet of misconduct against a workman, he should be
represented by a member of his union. Besides, it is necessary to remember
that if any inquiry is not otherwise fair, the workman concerned can challenge
its validity in an industrial dispute.
The Court accordingly held that a workman against whom an inquiry is being held, the
management has no right to be represented at such inquiry by a representative of his union
though of course, an employer in his discretion can and may allow his employee to avail
himself of such assistance.
In Dunlop Rubber Company v. Workmen 106, it was laid down that there was no right
of representation in a disciplinary proceeding by another person unless the service rules
specifically provided for the same.
In Kalindi v. Tata Engineering and Locomotive Co. Ltd, Dunlop Rubber Company v. Workmen
and Brook Bond India (P) Ltdv. Subba Roman (S)andAnother 107,itwasheld that the Indian law
does not concede an absolute right of representation to an employee as part of his right to
be heard. It was further specified that there is no right to representation as such unless the
company, by its standing orders, recognizes such a right. In this case, it was also laid down
that a delinquent employee has no right to be represented in the departmental proceedings
by a lawyer unless the facts involved in the disciplinary proceedings are of a complex nature.
In Bharat Petroleum Corporation Ltd v. Maharashtra General Kamgar Union 108, the Supreme
Court, while dealing with the right of representation through co-employees observed:

Model standing orders, no doubt, provided that a delinquent employee could

be represented in the disciplinary proceedings through another employee who
may not be the employee of the parent establishment to which the delinquent
belongs and may be an employee elsewhere, though he may be a member
of the trade union, but this rule of representation has not been disturbed by
the certified standing orders, as much as it still provides that the delinquent
employee can be represented in the disciplinary proceedings through an
employee. The only embargo is that the representative should be an employee
of the parent establishment. The delinquent has to select his representative so
that he is a co-employee of the same establishment in which the delinquent is
employed. There appears to be some logic behind this as a co-employee would
be fully aware of the conditions prevailing in the parent establishment, its
service rules, including the standing orders, and would be in a better position
than an outsider, to assist the delinquent in the domestic proceedings for a
fair and early disposal. The basic features of the model standing orders are

106 AIR 1965 SC 1392.

107 (1962)2 LLJ 417.
108 1997 LLR 180 (SC).
 Management of Disdpline and Disdplinary Procedure • 5 8 5

thus retained and the right of representation in the disciplinary proceedings

through another employee is not altered, affected or taken away. The standing
orders confirm to all standards of reasonableness and fairness and, therefore,
the appellate authority was fully justified in certifying the draft standing orders
as submitted by the appellant.

Is the Indian Evidence Act, 1872 applicable in a domestic inquiry? It is well-settled that in
a domestic inquiry, the Indian Evidence Act is not applicable in strictu sensu. The Supreme
Court in State of Haryana v. Rattan Singh reiterating this position pointed out109:

In a domestic inquiry, the strict and sophisticated rules of evidence under the
Indian Evidence Act may not apply. All materials which are logically probative
for a prudent mind are permissible. There is no allergy to hearsay evidence
provided it has reasonable nexus and credibility. The essence of a judicial
approach is objectivity, exclusion of extraneous materials or considerations
and observance of rules of natural justice. Of course, fair play is the basis and if
perversity or arbitrariness, bias or surrender of interdependence of judgement
vitiates the conclusions reached, such finding, even though of a domestic
tribunal, cannot be held good.
In Workmen of Balmadies Estate v. Management, Balmadies Estate110, the Supreme Court held
that it is fairly well-settled now that in view of the wide power of the labour court, the court
can, in an appropriate case, consider the evidence that has been considered by the domestic
tribunal and may arrive at a different conclusion from the one arrived at by the domestic
tribunal. However, the assessment of evidence in a domestic inquiry is not required to be
made by applying the same yardstick as a civil court could do when a lis is brought before
it. The Indian Evidence Act, 1872 is not applicable to the proceedings in a domestic inquiry
so far as the domestic inquiries are concerned, though principles of fairness are to apply.
It is also fairly well-settled that in a domestic inquiry, guilt may not be established beyond
reasonable doubt and the proof of misconduct would be sufficient. In a domestic inquiry,
all materials which are logically probative including hearsay evidence can be acted upon
provided it has a reasonable nexus and credibility.

In Capt. M Paul Anthony v. Bharat Gold Mines Ltd111 , the Supreme Court stated certain
situations which should be kept in abeyance during pendency of a criminalcase. In paragraph
22, conclusions which are deducible from various decisions were summarized. They are
as follows:

109 (1982) 1 LLJ 46 at 47.

110 2008 LLR 231.
111 (1999) 3 sec 679.
586 • Industrial Relations and Labour Laws

(i) Departmental proceedings and proceedings in a criminal case can proceed

simultaneously as there is no bar in their being conducted simultaneously, though
separately.
(ii) If the departmental proceedings and the criminal case are based on identical and
similar set of facts and the charge in the criminal case against the delinquent employee
is of a grave nature which involves complicated questions of law and fact, it would
be desirable to stay the deparbnental proceedings till the conclusion of the criminal
case.
(iii) Whether the nature of a charge in a criminal case is grave and whether complicated
questions of fact and law are involved in the case, will depend on the nature of offence,
the nature of the case launched against the employee on the basis of evidence and
material collected against him during investigation or as reflected in the charge-sheet.
(iv) The factors mentioned in (ii) and (iii) above cannot be considered in isolation to stay
the deparbnental proceedings but due regard has to be given to the fact that the
departmental proceedings cannot be unduly delayed.
(v) If the criminal case does not proceed or its disposal is being unduly delayed, the
departmental proceedings, even if they were stayed on account of the pendency of
the criminal case, can be resumed and proceeded with so as to conclude them at an
early date, so that if the employee is found not guilty, his honour may be vindicated
and in case he is found guilty, the administration may get rid of him at the earliest.
However, while deciding the case, taking into consideration the facts involved therein, the
Court in para 35 held:

Since the facts and the evidence in both the proceedings, namely, the
departmental proceedings and the criminal case were the same without there
being any iota of difference, the distinction, which is usually drawn as between
departmental proceedings and criminal case on the basis of approach and
burden of proof, would not be applicable to the instant case.
The aforesaid view was reiterated in State Bank of India v. RB Sharma 112 • In this case, the
Supreme Court observed:

The purpose of departmental inquiry and prosecution are two different and
distinct aspects. Criminal prosecution is launched for an offence, for violation
of a duty the offender owes to the society, or for breach of law which has
provided that the offender shall make sacrifice to the public. So, crime is an
act of commission in violation of law or omission of public duty. Deparbnental
inquiry is to maintain discipline in the service and efficiency of public service.
In Food Corporation ofIndia v. George Vergese 113, the management did not initiate deparbnental
inquiry againstthe workman during the pendancy of criminal trial against the employee. On
conviction of the said employee by criminal court, the management dismissed him. On his
acquittal in the criminal appeal, management set aside the order of dismissal and reinstated
the workman. But he was placed under immediate suspension and served a charge-sheet
for the purpose of holding a deparbnental inquiry against him. The High Court held that

112 2004 LLR 950.

113 1991 Lab. IC 1254 (SC)
 Management of Disdpline and Disdplinary Procedure • 5 87

no deparbnental inquiry against the delinquent could be initiated once there was acquittal.
In the letters patent appeal, the division bench of the High Court refused to interfere on the
ground of delay on the part of the management in initiating the deparbnental inquiry. The
Supreme Court in a special leave petition held that the division bench of the High Court
was not justified in refusing to interfere only on the ground of delay because the delay was
not occasioned on account of inaction on the part of the management.

It has not been settled in a series of cases of the Supreme Court114 that acquittal in criminal
trial cannot bar holding of a deparbnental inquiry into the charge. The Court gave several
reasons for this115 •
(i) A conclusion arrived at in disciplinary inquiry is different from that arrived by a
criminal court.
(ii) The burden of proof required to establish guilt in a criminal court is not required in
disciplinary proceedings.
(iii) The evidence led by the management in disciplinary proceedings may be different
from that led by the prosecution in a criminal case and the material before the criminal
court and inquiry officer or labour court may be entirely different.
In Allahabad District Cooperative Bank Ltd v. Vidhya Varidh Mishra 116, a question arose
whether an employee who was held guilty in a disciplinary proceeding for having a hand
in embezzlement of money in the office but acquitted in a criminal trial on the same charge
could ask for quashing of the penalty of dismissal. The Supreme Court answered the question
in the negative and held that in a disciplinary inquiry, a different conclusion may be arrived
at than by a criminal court. The Court added that the strict burden of proof required to
establish guilt in a criminal court is not there in disciplinary proceedings. It was not the
case of the employee that the disciplinary proceedings were not conducted fairly. The Court
further held that as the termination of services of the employee was based on findings of the
disciplinary committee, the fact that the appellant criminal court exonerated the employee
was of no consequence. Accordingly, the Court upheld the order of termination pursuant
to the disciplinary inquiry.
In Ajit Kumar Nag v. General Manager (PJ) Indian Oil Corporation Ltd117, a three-judge
Bench of the Supreme Court ruled that:
1. Acquittal by a criminal court would not debar an employer from exercising power in
accordance with the rules and regulations in force.
2. The two proceedings, criminal and deparbnental, are entirely different. They operate
in different fields and have different objectives. Whereas the object of criminal trial is
to inflict appropriate punishment on the offender, the purpose of inquiry proceedings

114 (1997) LLR 498 (SC}.

115 See Allahabad District Cooperative Bank Ltd v. Vidhya Varidh Mishra, (2004) 6 SCC 482; See also
Krishnakali Tea Estate v. Akhil Bharatiya Mazdoor Sangh, (2004) 8 SCC 200.
116 (2004) 6 sec 482.
117 (2005) 7 sec 764.
5 8 8 • Industrial Relations and Labour Laws

is to deal with the delinquent departmentally and to impose penalty in accordance

with the service rules.
3. In a criminal trial, incriminating statement made by the accused in certain circumstances
or before certain officers is totally inadmissible in evidence. Such strict rules of evidence
and procedure would not apply to departmental proceedings.
4. The degree of proof which is necessary to order a conviction is different from the
degree of proof necessary to record commission of delinquency.
5. The rule relating to appreciation of evidence in two proceedings is also not similar.
In criminal law, burden of proof is on prosecution and unless the prosecution is able
to prove the guilt of the accused beyond reasonable doubt, he cannot be convicted by
the court of law. In departmental inquiry on the other hand, penalty can be imposed
on the delinquent officer on a finding recorded on the basis of preponderances of
probability.
6. Acquittal of the appellant by a judicial magistrate, therefore, does not ipso facto absolve
him of the liability under the disciplinary jurisdiction of the corporation.
In Chairman-cum-MD, TNCS Corporation Ltd v. K Meerabai 118, while dealing with the effect
of judgement of acquittal in criminal proceedings on initiation of disciplinary proceedings,
the Supreme Court ruled:
(a) The scope of disciplinary proceedings and the scope of criminal proceedings in a
court of criminal law are quite distinct, exclusive and independent of each other.
(b) The criminal case and departmental proceedings were not based on identical facts
and charges.
(c) Where the charge-sheeted employee holds a position of trust and where honesty
and integrity are in-built requirements of functioning, the matter should be dealt
with firmly and not leniently.
In Suresh Pathrella v. Oriental Bank of Commerce119, the Supreme Court held that acquittal
in a criminal case would be no bar for drawing up disciplinary proceedings against the
delinquent officer. It added that it is a well-settled principle of law that the yardstick and
standard of proof in a criminal case is different from the disciplinary proceedings. While
the standard of proof in a criminal case is a proof beyond all reasonable doubt, the proof in
a departmental proceeding is preponderance of probabilities.
Again, in Noida Entrepreneurs Association v. Noida 120, a three-judge bench of the Supreme
Court held that there is a conceptual difference between deparbnental inquiry and criminal
proceedings and the standard of proof required for deparbnental proceedings is not the same
as required to prove criminal charges and therefore the acquittal in criminal proceedings is
not a bar to departmental proceedings.
The question arose again in Bank of India v. Bhimsen Gochhayat 121 • Here, the Supreme Court
held that where the charges in departmental inquiry were different from those in criminal
case, the acquittal of an employee could not bar or prevent subsequent deparbnental inquiry.

118 2006 LLR 268.

119 AIR 2007 SC 199: (2007) 1 LLJ 728.
120 (2007) 10 sec 385.
121 2010 LLR 113.
 Management of Disdpline and Disdplinary Procedure • 5 8 9

In Babu Lal v. Haryana State Agricultural Marketing Board 122, the Supreme Court held
that where the acquittal of an employee in criminal proceedings was on benefit of doubt,
the employer has a right to decide whether or not such an employee deserves any salary
for the intervening period. This view only deals with back wages and not with the issue
whether the disciplinary proceedings should continue.
In Bank of India v. Bhimsen Gochhayat 123, the respondent was tried only on the basis of
allegations of fraud committed by way of forgery whereas the respondent had used broken
pieces of branch receipt scroll rubber stamp to affix Lindsay Street branch on the CAN. Apart
from this, the respondent had also stolen the entire pad of CANs from the branch and kept
the same at his residence. All these allegations were not there in the criminal proceedings.
In view of this, the Court held that when a bank employee was acquitted in criminal trial,
holding of deparbnental inquiry would not be invalid, if charges were different from those
in the criminal case which ended in the acquittal of the employee.
In Union ofIndia v. Naman Singh Shekhawat124, the Supreme Court held that deparbnental
proceedings can be initiated after acquittal by the criminal court. However, deparbnental
proceedings should be initiated provided the deparbnent can adduce any evidence which
could prove the charges against the delinquent officer. Therefore, initiation of proceedings
should be bona fide and must be reasonable and fair.
In Pandiyan Roadways Corp. Ltd v. N Balakrishnan 125, the Supreme Court reconsidered the
issue taking into account all earlier judgements and observed as under:

There are evidently two lines of decisions of this Court operating in the field.
One is evident in the cases which would come within the purview of Ca'2t.
M Paul Anthony v. Bharat Gold Mines Ltd and G M Tank v. State of Gujarat 26•
However, the second line of decisions shows that an honourable acquittal
in the criminal case itself may not be held to be determinative in respect of
order of punishment meted out to the delinquent officer, inter alia, when (i)
the order of acquittal has not been passed on the same set of facts or same set
of evidence; (ii) the effect of difference in the standard of proof in a criminal
trial and disciplinary proceedings has not been considered (see Commissioner of
Police v. Narender Singh), or (iii) where the delinquent officer was charged with
something more than the subject matter of the criminal case and/or covered
by a decision of the civil court.
In Divisional Controller, Karnataka State Road Transport Corporation v. MG Vittal Rao 127, the
Supreme Court, after examining the aforesaid decisions held:

There can be no doubt regarding the settled legal proposition that as the
standard of proof in both the proceedings is quite different, and the termination
is not based on mere conviction of an employee in a criminal case, the acquittal
of the employee in a criminal case cannot be the basis of taking away the

122 2009 LLR 936 (SC}.

123 2010 LLR 113 (SC}.
124 (2008) 4 sec 1: (2008) 1 sec (L&S} 1084.
125 (2007) 9 sec 755: (2008) 1 sec (L&S} 1084.
126 (2006) 5 sec 446: 2006 sec (L&s} 1121.
127 (2012) 1 sec 442.
590 • Industrial Relations and Labour Laws

effect of deparbnental proceedings. Nor can such an action of the deparbnent

be termed as double jeopardy. The judgement of this Court in Capt. M Paul
Anthony does not lay down the law of universal application. Facts, charges
and nature of evidence, etc., involved in an individual case would determine
as to whether decision of acquittal would have any bearing on the findings
recorded in the domestic inquiry.

Courts have held that delay of over 2 or even 3 years in initiating inquiry would not vitiate
the inquiry 128 •

It has been held that inquiry can be conducted afresh from the stage when illegality is found
committed129• However, where liberty is given to the employer to hold de novo inquiry, the
earlier proceedings including the charge-sheet issued earlier would be quashed. In such a
situation, it is not permissible for the employer to proceed on the basis of the charge-sheet
issued earlier 130 •
In State Bank of Bikaner and Jaipur v. Ajay Kumar Gulati 131 , a disciplinary inquiry was
held against the respondent with respect to certain grave charges. The inquiry officer
reported that the charges were established. After considering the report and objections
submitted by the respondent, the disciplinary authority ordered de novo disciplinary
inquiry against the delinquent for affording him another opportunity to put up his
defence. A new inquiry officer was appointed. The respondent questioned the aforesaid
proceedings/ order by way of a writ petition in Delhi High Court. The question arose
from which stage of proceedings de novo inquiry should commence. The Court directed
that the inquiry should not be from the very beginning but confined to the recording of
evidence to be adduced by the respondent alone. The appellant then filed an appeal in
the Supreme Court against the order of Delhi High Court. Before the Supreme Court, the
appellant contended that no reasons were given in support of the High Court's decision.
The Supreme Court, while dismissing the appeal, upheld the decision of the High Court
and held that fresh inquiry should not be from the very beginning. The Court also held
that since fresh inquiry was ordered for affording opportunity to the defendant to put up
his defence, it should commence from giving opportunity to the delinquent to produce
his documentary and oral evidence and also for considering the question of recalling any
witness for cross examination.

128 Anandam v. Tamil Nadu Electricity Board, 1997 LLR 247; Datta Balu Sagar v. Dock Manager, Bombay
Port Trust, 1997 LLR 720.
129 Board of Management of SVT Educational Institution v. AR Bhatt, 1997, Lab IC 1917.
13°Chairman-cum-MD, Coal India Ltd v. Anant Saha, 2011 Lab. IC 2592 (SC).
131 1996 (5) SCALE 226; 1996 JT 447.
 Management of Disdpline and Disdplinary Procedure • 5 9 1

The Supreme Court in Union of India v. Mohd. Ramzan Khan 132, has held that wherever a
domestic inquiry is conducted by the management and the inquiry officer submits a report to
the disciplinary authority at the conclusion of the inquiry holding the delinquent employee
guilty of all or any of the charges with proposal for punishment or not, the delinquent must
be given a copy of such report. He would also be entitled to make a representation against
it if he so desired. Not furnishing a copy of the inquiry report to the delinquent would be
violative of the principles of natural justice and is liable to be quashed. The rule is given
prospective effect from the date of judgement, i.e. 20 November 1990.
The constitution bench of the Supreme Court in Managing Director, ECIL, Hyderabad v.
B Karunakar 133, dealt with various issues arising from the non-supply of the inquiry report
and ruled:
The denial of the report of the inquiry officer is denial of reasonable opportunity
and a breach of the principles of natural justice, and therefore, invalid. The
delinquent employee will, therefore, be entitled to a copy of the report even
if the statutory rules do not permit the furnishing of the report or are silent
on the subject.
Article 311(2) of the Constitution makes it obligatory to hold an inquiry before the
employee is dismissed or removed in rank. The Article, however, cannot be construed to
mean that it prevents or prohibits the inquiry when punishment other than that of dismissal,
removal or reduction in rank is awarded. The procedure to be followed in awarding other
punishment is laid down in the service rules governing the employee. Further, Article
311(2) applies only to members of civil services of the Union or an all-India service or a civil
service of a state or to the holders of civil posts and others are governed by their service
rules. Whenever, therefore, the service rules contemplate an inquiry before punishment
is awarded and when the inquiry officer is not the disciplinary authority, the delinquent
employee will have the right to receive the inquiry officer's report notwithstanding the
nature of the punishment.
(i) Since it is the right of the employee to have the report to defend himself effectively
and he would not know in advance whether the report is in his favour or against
him, it will not be proper to construe his failure to ask for the report as the waiver
of his right. Therefore, whether the employee asks for the report or not, the report
has to be furnished to him.
(ii) the right to make representation to the disciplinary authority against the findings
recorded in the inquiry report is an integral part of the opportunity of defence
against the charges and is a breach of principles of natural justice to deny the said
right.
The aforesaid view was reiterated in Managing Director, Electronics Corporation of India
v. B. Karunakaran 134• Here the Supreme Court held that the right to receive a copy of the
report of inquiry and make representation are integral part of the opportunity of defence.
Breach thereof would violate the principles of natural justice. The Court further ruled that
the report has to be furnished whether the employers want to do so or not.

132 1991 Lab IC 308 (SC).

133 (1995) 4 sec 727.
134 (1996) 4 sec 727.
592 • Industrial Relations and Labour Laws

The pendulum swung back in State Bank of Patiala v. SK Sharma 135 wherein the Supreme
Court held that there will be no illegality in non-supply of inquiry report to the delinquent
employees when no prejudice has been caused to him. The Court further held that complaint
of violation of principles of natural justice has to be examined on the touchstone of prejudice
caused to the complainant.
The aforesaid view was reiterated in SK Singh v. Central Bank of India 136, the Supreme
Court held that non-supply of the copy of the inquiry report would not be illegal if no
prejudice is caused to delinquent employee due to non-supply of the inquiry report.
The two-judge bench of the Supreme Court in Debotosh Pal Chaudhary v. Punjab Bank137
was, inter alia, invited to determine consequences of not furnishing a copy of inquiry report
before imposing the punishment of dismissal. In this case, Debotosh Pal Chaudhary was
employed in Punjab National Bank. On 8 October 1988, the management dismissed him from
service on the basis of the inquiry report submitted by the inquiry officer on 26 September
1988. The petitioner in a writ petition challenged the order of dismissal by contending that
(i) the inquiry was vitiated as he did not have reasonable opportunity to have the copies
of the documents or inspection thereof; and (ii) he was not afforded an opportunity to
adduce oral evidence by examining two witnesses. The single judge of the High Court,
inter alia, held that the disciplinary authority did not forward to the inquiring authority the
documenets and lists of witnesses before commencing the inquiry against the petitioner.
On appeal, the division bench revised the decision of the single judge and dismissed the
writ petition. Aggrieved by the order, the petitioner filed a special leave to appeal before
the Supreme Court. The Court referred to regulation 6(5) which requires the disciplinary
authority, where it is not the inquiring authority, to forward to the inquiring authority the
following documents:
(i) a copy of the articles of charge and statement of imputations of misconduct or
misbehaviour;
(ii) a copy of the written statement of defence, if any, submitted by the officer employee;
(iii)a list of documents by which and list of witnesses by whom the articles of charge
are proposed to be substantiated;
(iv)a copy of the statement of the witnesses, if any;
(v) evidence providing the delivery of the article of charge under sub-regulation (3);
and
(vi) a copy of the order appointing the 'presenting officer' in terms of sub-regulation (6).
While dealing with the aforesaid requirements, the Court held that fulfilment of some of
the requirements of this regulation is purely procedural in character. Unless in a given
situation, the aggrieved party makes out a case of prejudice or injustice, mere infraction of
this regulation will not vitiate the entire inquiry. While dealing with the issue of non-supply
of the copy of inquiry report, the Court observed:

It is true that the petitioner was not provided with a copy of the inquiry report
by the disciplinary authority before imposition of the punishment of dismissal,

135 1997LLR 268 (SC).

136 1997 (75) FLR 402.
137 2002 LLR 1989.
 Management of Disdpline and Disdplinary Procedure • 5 9 3

but that circumstance has no bearing on the dismissal of the petitioner in view
of the decisions of this Court of Ramzan Khan's case (supra) and Managing
Director, ECIL, Hyderabad v. B. Karunakar. The said two decisions are to the
effect that no order of punishment before the date of the decision in Ramzan
Khan's case would be changeable on the ground that there is failure to furnish
inquiry report before imposing the punishment by the disciplinary authority.
In the present case, the punishment had been imposed upon the petitioner by
the disciplinary authority on October 8 1988, long before the decision of this
Court in Ramzan Khan's case on 20 November 1990.
The aforesaid ratio of law has been. reiterated by the Supreme Court in Haryana Financial
Corp. v. Kailash Chandra Ahuja 138. This Court again examined the entire issue and observed
as follows:

From the ratio laid down in B Karunakar, it is explicitly clear that the doctrine
of natural justice requires supply of a copy of the inquiry officer's report to the
delinquent if such inquiry officer is other than the disciplinary authority. It is
also clear that non-supply of report of the inquiry officer is breach of natural
justice. But it is equally clear that failure to supply a report of the inquiry officer
to the delinquent employee would not ipso facto result in the proceedings being
declared null and void and the order of punishment, non-est and ineffective.
It is for the delinquent employee to plead and prove that non-supply of such
report had caused prejudice and resulted in miscarriage of justice. If he is
unable to satisfy the court on that point, the order of punishment cannot
automatically be set aside.
In Sarv UP Gramin Bank v. Manoj Kumar Sinha 139, the respondent joined Devi Patlan Kshetria
Gramin Bank, Gonda (now Sarva UP Gramin Bank) as an officer. He was served with two
charge-sheets dated 9 November 2000 and 8 March 2004 for various acts of omissions and
commissions while working at branches of district Gonda. He was suspended. The respondent
submitted a reply to the charge-sheet. He denied the charges mentioned therein. Thereafter,
two separate deparbnental inquiries were held, in which the respondent fully participated.
On 19 May 2001, the inquiry officer submitted the inquiry report with regard to chargesheet
dated 9 November 2000. Agreeing with the findings of the inquiry officer, the disciplinary
authority issued two show cause notices to the respondent proposing the punishment
of reduction of pay by six stages permanently. Thereafter, the respondent was given an
opportunity for a personal hearing by disciplinary authority on each of the inquiry reports.
Taking into consideration the explanation submitted by the respondent, the disciplinary
authority passed two orders on 3 April 2001 imposing the punishment of 'reduction of
pay by six stages permanently' and 'reduction of pay by four stages' in relation to charge-
sheets filed on 9 November 2000 and 8 March 2001 respectively. Against these orders, the
respondent filed appeals which were dismissed by the board of directors of the bank which
was communicated to the respondent. He then filed a writ petition challenging the orders
dated 3 April 2002 and 9 September 2003. The division bench of the High Court allowed
the writ petition on the ground that since a copy of the inquiry report was not served on
the respondent; the action of the petitioner bank was violative of the principles of natural

138 JT 2008 (8) SC 70.

139 2010 LLR 348.
594 • Industrial Relations and Labour Laws

justice in view of the judgement in Mohd. Ramzan Khan case. The bank then challenged the
legality of the aforesaid judgement in an appeal before the Supreme Court. The Court relied
upon the decision in ECIL v. B Karunakar and observed:

From the aforesaid decisions, it is clear that though the supply of report of
the inquiry officer is part and parcel of natural justice and must be furnished
to the delinquent employee, failure to do so would not automatically result
in quashing or setting aside of the order or the order being declared null and
void. For that, the delinquent employee has to show 'prejudice'. Unless he is
able to show that non-supply of report of the inquiry officer has resulted in
prejudice or miscarriage of justice, an order of punishment cannot be held to be
vitiated. And whether prejudice had been caused to the delinquent employee
depends upon the facts and circumstances of each case and no rule of universal
application can be laid down.
In view of above, the Court held that there has been no failure of justice in the facts and
circumstances of this case by non-supply of the inquiry report to the respondent. The
Court also held that the punishment imposed on the respondent cannot be said to be
disproportionate to the gravity of the charges against him. The charges related to the conduct
of the respondent in a financial institution whereby taking advantage of the official position,
he attempted to procure unlawful pecuniary benefits for himself.
In Burdwan Central Cooperative Bank Ltd v. Asim Chatterjee140 the Court applied the principle
whether any prejudice was caused to the delinquent employee by non-supply of inquiry report.
The Court referred to its earlier decision in B Karunakar case (supra) and observed:

There is one aspect of the matter which cannot be ignored. In B Karunakar case,
despite holding that non-supply of a copy of the inquiry officer's report to the
employee facing disciplinary proceedings amounts to denial of natural justice,
in the later part of the judgement it was observed that whether in fact, prejudice
has been caused to the employee on account of non-furnishing of a copy of the
inquiry report has to be considered on the facts of each case. It was observed that
where the furnishing of the inquiry report would not make any difference to the
ultimate outcome of the matter, it would be perversion of justice to allow the
employee concerned to resume his duties and to get all consequential benefits.
Applying the above in this case where order of punishment had been passed against
the respondent for financial irregularities in the bank and if the bank was of the view that
his services could not be retained on account of his previous misdemeanour, it is then that
the second part of B Karunakar case becomes attracted and it becomes necessary for the
Court to examine whether any prejudice has been caused to the employee or not before
punishment is awarded to him.

In Punjab Dairy Development Corporation Ltd v. Industrial Tribunal 141 , the three-judge bench of
the Supreme Court ruled that when domestic inquiry is found defective, it relates back from
the date on which the management passed the order and not from the date of judgement.

140 (2012) 2 sec 641.

141 (1997) 6 sec 159.
 Management of Disdpline and Disdplinary Procedure • 5 9 5

Section 11-A provides:

Where an industrial dispute relating to the discharge or dismissal of a workman has been
referred to a labour court, tribunal or national tribunal for adjudication and, in the course
of the adjudication proceedings, the labour court, tribunal or national tribunal, as the
case may be, is satisfied that the order of discharge or dismissal was not justified it may,
by its award, set aside the order of discharge or dismissal and direct reinstatement of the
workman on such terms and conditions if any as it thinks fit, or give such other relief to the
workman including the award of any lesser punishment in lieu of discharge or dismissal
as the circumstances of the case may require.
Provided that in any proceedings under this Section, the labour court, tribunal or
national tribunal, as the case may be, shall rely only on the materials on record and shall
not take any fresh evidence in relation to the matter.
In order to appreciate the need for it, would be necessary to consider the past history
with regard to the introduction of Section 11-A by Act No. 45 of 1971 in the Industrial
Disputes Act, 1947 with effect from December 15, 1971.
In Indian Iron and Steel Co. Ltd. v. Their Workmen 142 , the Supreme Court, while
considering the tribunal's power to interfere with the management's decision to dismiss,
discharge or terminate the services of a workman, has observed that in cases of dismissal
for misconduct the tribunal does not act as court of appeal and substitute its own judgement
for that of the management and that the tribunal will interfere only when there is want of
good faith, victimization, unfair labour practice, etc. on the part of the management.
The International Labour Organization in its recommendation (No. 119) concerning
'termination of employment at the initiative of the employer' adopted in June 1963, has
recommended that a worker aggrieved by the termination of his employment should be
entitled to appeal against the termination among others, to neutral body such as an arbitrator,
a court, an arbitration committee or a similar body and that the neutral body concerned
should be empowered to examine the reasons given in the termination of employment and
the other circumstances relating to the case and to render a decision on the justification of
their termination. The International Labour Organization has further recommended that
the neutral body should be empowered (if it finds that the termination of employment was
unjustified) to order that the worker concerned, unless reinstated with unpaid wages should
be paid adequate compensation or afforded some other relief.
In accordance with above recommendations, it was considered that the tribunals'
power in adjudication proceeding relating to discharge or dismissal of a workman should
not be limited and that the tribunal should have the power, in cases wherever necessary,
to set aside the order of discharge or dismissal and direct reinstatement of the workman on
such terms and conditions, if any, as it thinks fit or give such other relief to the workman
including the award of any lesser punishment in lieu of discharge or dismissal as the
circumstances of the case may require.
Accordingly, Section 11-A was inserted in the Industrial Disputes Act, 1947. Thus the
position has been changed by Section 11-A. While previously the tribunal had no power

142 (1958-1, LLJ-260)

596 • Industrial Relations and Labour Laws

to interfere with the punishment, it is now clothed with such a power. Under Section 11-A
even 'if the finding of misconduct is established, the tribunal now has power to consider
whether the punishment of dismissal or discharge was necessary for the type of misconduct
of which the workman is found guilty. In such circumstances, the tribunal may hold that
the proved misconduct does not merit punishment by way of discharge or dismissal of the
workmen and may award lesser punishment instead.
The ambit and scope of Section 11-A came up for consideration before the Supreme
Court in Workmen of Firestone Tyre and Rubber Company of India (P) Ltd. v. Firestone Tyre and
Rubber Company of India (P) Ltd. 143 The Court laid down the following principles:
1. The right to take disciplinary action and to decide upon the quantum of punishment
are mainly managerial functions but if a dispute is referred to a tribunal, the latter has
power to see if action of the employer is justified.
2. Before imposing the punishment, an employer is expected to conduct a proper inquiry
in accordance with the provisions of the standing orders, if applicable, and principles
of natural justice. The inquiry should not be empty formality.
3. When a proper inquiry has been held by an employer, and the finding of misconduct
is plausible conclusion flowing from the evidence adduced at the said inquiry, the
tribunal has no jurisdiction to sit in judgement over the decision of the employer as
an appellate body. The interference with the decision of the employer will be justified
only when findings arrived at in the inquiry are perverse or the management is guilty
of victimization, unfair labour practice or mala fide conduct.
4. Even if no inquiry has been held by an employer or if the inquiry held by him is found
to be defective, the tribunal in order to satisfy itself about the legality and the validity
of the order, has to give an opportunity to the employer and employee to adduce
evidence before it. It is open to the employer to adduce evidence for the first time
justifying his action, and it is open to the employee to aduce evidence contra.
5. The effect of an employer not holding an inquiry is that the tribunal would not have to
consider only whether there was a prima facie case. On the other hand, the issue about
the merits of the impugned order of dismissal or discharge is at large before the tribunal
and the latter, on the evidence adduced before it, has to decide for itself whether the
misconduct alleged is proved. In such cases, the point about the exercise of managerial
functions does not arise at all. A case of defective inquiry stands on the same footing as
no inquiry.
6. The tribunal gets jurisdiction to consider the evidence placed before it for the first
time in justification of the action taken only, if no inquiry has been held or the inquiry
conducted by an employer is found to be defective.
7. It has never been recognized that the tribunal should straightaway, direct reinstatement
of a dismissed or discharged employee once it is found that no domestic inquiry has
been held or the said inquiry is found to be defective.
8. An employer, who wants to avail himself of the opportunity of adducing evidence for
the first time before the tribunal to justify his action, should ask for it at the appropriate
stage. If such an opportunity is asked for, the tribunal has no power to refuse. The
giving of an opportunity to an employer to adduce evidence for the first time before

143 (1973) 1 LLJ 278; AIR 1973 SC 1273.

 Management of Disdpline and Disdplinary Procedure • 5 9 7

the tribunal is in the interest of both the management and the employee and to enable
the tribunal itself to be satisfied about the alleged misconduct.
9. Once the misconduct is proved either in the inquiry conducted by an employer or by
the evidence placed before a tribunal for the first time, punishment imposed cannot
be interfered with by the tribunal except in cases where the punishment is so harsh
as to suggest victimization. 144
10. In a particular case, after setting aside the order of dismissal, whether a workman should
be reinstated or paid comRensation is as held by this Court in Management of Panitola
Tea Estate v. The Workmen 45, within the judicial decision of a labour court or tribunal.

A. Right of the Employer to Adduce Evidence

1. General
The Supreme Court in Bharat Forge Company Ltd v. A B Zodge 146, held that under Section
11-A, employer is entitled to adduce evidence for the first time, before the tribunal even
if the employer had not conducted any inquiry or the inquiry conducted by him is found
to be preverse. A domestic inquiry may be vitiated either for non-compliance of rules of
natural justice or for perversity. Disciplinary action taken on the basis of a vitiated inquiry
does not stand on a better footing than a disciplinary action with no inquiry. The right of
the employer to adduce evidence in both situations is well recognized.
Again, in United Planters Association of Southern India v. KG Sangameswaran 147, the
Supreme Court ruled:
1. Even in cases where opportunity of hearing was given and principles of natural justice
were complied with before passing the order of dismissal, the appellate authority may
find it necessary to record evidence in order to draw its own conclusion as to whether
the person dismissed was or was not guilty of the charges framed against him.
2. Where the employer had filed an application to produce evidence in support of the
charges and the appellate authority without disposing of that application set aside
the order of dismissal merely on the omission to hold domestic inquiry, the appellate
authority committed a grave error.
In Neeta Kaplish v. Presiding Officer, Labour Court 148, the Supreme Court after examining
various decisions observed:

In all cases where inquiry has not been held or inquiry has been found to
be defective, the tribunal can call upon the management or the employer to
justify the action taken against the workman and to show by fresh evidence,
that the termination or dismissal order was proper. If the management
does not lead any evidence by availing of this opportunity, it cannot raise
any grouse at any subsequent stage that it should have been given that
opportunity as the tribunal, in those circumstances, would be justified in
passing an award in favour of the workman. If, however, the opportunity is

144 (1973) 1 LLJ 278, 293-94.

145 (1971) 1 sec 742; AIR 1971 sc 2171.
146 1996 LLR 385.
147 (1997) 4 sec 741; (1997) 1 LLJ 1104 (SC).
148 (1999) 1 LLJ 275 (SC).
598 • Industrial Relations and Labour Laws

availed of and the evidence is adduced by the management, the validity of

the action taken by its has to be scrutinized and adjudicated upon the basis
of such fresh evidence.
The Court rejected the contention that under Section 11-A, the labour court had to
rely on the 'materials on record' and since the inquiry proceedings constituted 'material on
record', the same could not be ignored and observed:
The record pertaining to the domestic inquiry would not constitute 'fresh
evidence' as those proceedings have already been found by the labour court
to be defective. Such record would also not constitute 'material on record', as
contended by the counsel for the respondents, within the meaning of Section
11-A as the inquiry proceedings, on being found to be bad, have to be ignored
altogether. The proceedings of the domestic inquiry could be and were, in
fact relied upon by the management for the limited purpose of showing at
the preliminary stage that the action taken against the appellant was just and
proper and that full opportunity of hearing was given to her in consonance
with the principles of natural justice. This contention has not been accepted
by the labour court and the inquiry has been held to bad. In view of the
nature of objections raised by the appellant, the record of inquiry held by the
management to be 'material on record' within the meaning of Section 11-A of
the Act and the only course open to the management was to justify its action
by leading fresh evidence as required by the labour court. If such evidence has
not been led, the management has to suffer the consequences.
2. When can the tribunal permit parties to adduce fresh evidence
In Rajendra Jha v. Labour Court, 149 the Supreme Court held that even when the
application for permission to adduce further evidence is not made in the pleading, labour
court is empowered to permit the management to adduce evidence before the court and
therefore, it should allow the parties to adduce evidence to prove the misconduct. However,
the Court has observed that the request of the employer to adduce evidence should be made
at the earliest opportunity or delay be explained 150• However, such request must be made
before the closure of the proceedings.
No obligation to ask the parties to adduce evidence. The Court held that the tribunal
has no obligation to acquaint parties before them for their right to adduce evidence under
Section 11-A151 •

B. Interference with a Quantum of Punishment

Section 11-A confers jurisdiction on the labour courtto evaluate the severity of misconduct
as to assess whether the punishment imposed by the employer is commensurate with the
gravity of the misconduct. In Hombe Gowda EDN Trust v. State of Karnataka 152, The Supreme

149 1984 Supp SCC 520.

150 Adichancellor Farmers Service Co-operative Bank v. LC., (1996) LLR 659.
151 Shankar Chakravarty v. Britannia Biscuits Co. Ltd, AIR 1979 831652; Delhi Cloth and General Mills Co. v.

Ludh Budh Singh, (1972) 1 LLJ 180; Shankar Nath v. Bank of Baroda, AIR 1984 SC 289; Addl. Chancellor,
Farmers Service Cooperative Bank v. Labour Court, (1996) LLR 654 (Kerala); Neeta Kaplish v. Labour
Court, (1999) 1 LLJ 275 (SC).
152 2006 LLR 141 (SC).
 Management of Disdpline and Disdplinary Procedure • 5 9 9

Court observed that 'the tribunal would not normally interfere with the quantum of
punishment imposed by the employers unless an appropriate case is made out therefore.
The tribunal being inferior to this Court, was bound to follow the decision of this Court. ...
The tribunal can neither ignore the ratio laid down by this Court nor refuse to follow the
same.' The Court added:

Discipline at the workplace in an organization is a sine quo non for the efficient
working of the organization. When an employee breaches such discipline and
the employer terminates his service, it is not open to the labour court or an
industrial tribunal to take the view that the punishment awarded is shockingly
disproportionate to the charge proved 153 •
However, in Management of Hindustan Machine Tools Ltd, Bangalore v. Mohd. Usman 154,
the Supreme Court held that where the punishment imposed by the employer is
disproportionately excessive, the labour court in exercise of its discretion under Section 11-A
can reduce the punishment. Even in a case where the labour court held that the domestic
inquiry was conducted properly and without prejudice to the worker, it can analyse the
evidence to decide whether the dismissal of the worker was justified. It is within the
jurisdiction of the labour court to consider the propriety and justifiability of the punishment
in the case and direct reinstatement if found necessary.
In Chairman-cum-MD, Coal India Ltd v. Mukul Kumar Choudhun 155, the apex court
ruled:

One of the tests to be applied while dealing with the question of quantum
of punishment would be: would any reasonable employer have imposed
such punishment in like circumstances? Obviously, a reasonable employer
is expected to take into consideration measure, magnitude and degree of
misconduct and all other relevant circumstances and exclude irrelevant matters
before imposing punishment. The punishment is not only unduly harsh but
grossly in excess to the allegations.
A year later, in Charanjit Lamba v. Commanding Officer156, the Supreme Court observed:

That the punishment imposed upon the delinquent should be commensurate

with the nature of the misconduct is not only a requirement of fairness,
objectivity and non-discriminatory treabnent but the same is recognized as
being part of Article 14 of the Constitution. It is also evident from the decisions
referred to above that the courts in India have recognized the doctrine of
proportionality as one of the grounds for judicial review.
Referring to scope of judicial review, the Court pointed out:

We need to remember that the quantum of punishment in disciplinary

matters is something that rests primarily with the disciplinary authority. The
jurisdiction of a writ court or an administrative tribunal is limited to finding

153 Ibid.
154 (1997) 1 LLN 391 (SC).
155 (2009) 8 MLJ 460 (SC).
156 (2010) 7 MLJ 367 (SC).
600 • Industrial Relations and Labour Laws

out whether the punishment is so outrageously disproportionate as to be

suggestive of lack of good faith. What is clear is that while judicially reviewing
an order of punishment imposed on a delinquent employee, the writ court
would not assume the role of an appellate authority. It would not impose a
lesser punishment merely because it considers the same to be more reasonable
than what the disciplinary authority had imposed. It is only in cases where the
punishment is so disproportionate to the gravity of charge that no reasonable
person placed in the position of the disciplinary authority could have imposed
such a punishment that a writ court may step in to interfere with the same.

C. Specific Facts/Situations
1. Non-issuance of Tickets
In Devendra Swamy v. State Road Transport Corporation 157, the services of a bus conductor were
terminated after deparbnental inquiry for not issuing tickets to eight passengers. Earlier,
he was found guilty of similar offence in more than 41 cases in which lesser punishments
were imposed upon him. Thereupon, an appeal was filed before the Supreme Court. While
dealing with justifiability of termination of service, the Supreme Court referred to its earlier
decisions158 wherein it was held that unless punishment is shockingly disproportionate to
the charge which has been proved, the punishment awarded by the disciplinary authority
should not be interfered with in exercise of power of judicial review. The Supreme Court
held that the corporation was fully justified in awarding the punishment of dismissal looking
at the gravity of the charge of misconduct for which disciplinary proceedings were initiated
and proved as also in the light of previous service record of the appellant.
The Supreme Court in Regional Manager v. Ghanshayam Sharma 159 was invited to assess
the quantum of punishment keeping in view the nature and severity of misconduct. In this
case, the respondent who was employed as a conductor by the Rajasthan Road Transport
Corporation was punished several times for having been charge-sheeted on the ground of
not issuing tickets to passengers. In this case, he was again found carrying 23-1 /2 passengers
without ticket. An inquiry was conduced and he was removed from service. On a reference,
the labour court invoked its jurisdiction under section 11-A and held that even though the
respondent was guilty of misconduct, it directed reinstatement with continuity of service
but without back wages. On a writ petition, the single judge of the High Court set aside
the award. On a letters patent appeal the division bench reversed the award of the single
judge. Thereupon an appeal was filed before the Supreme Court. The Court relied upon
its earlier decision in Karnataka State Road Transport Corporation v. B S Hullikatti 160 and held
that in such cases where the bus conductors carry passengers without ticket or issue tickets
at a less rate than the proper rate, the said acts would, inter alia, amount to either being a
case of dishonesty or of gross negligence and such conductors were not to be retained in
service because such inaction or action on the part of the conductors results in financial
loss to the Corporation. The Court accordingly held that the order of dismissal should not

157 2002 Lab IC 2475.

158 Stateof Haryana v. Rattan Singh, AIR 1977 SC 1512; UP State Road Transport Corporation v. Basudeo
Chaudhary, (1997) 11 SCC 370; UP State Road Transport Corporation v. Subhash Chandra Sharma and
Others, (2000) (3) SCC 324).
159 (2002) ILLJ 234.
160 (2001) ILLJ 725.
 Management of Disdpline and Disdplinary Procedure • 601

be set aside. The Court remarked that although under Section 11-A, the labour court has
jurisdiction and power to interfere with the quantum of punishment, the discretion has to
be used judiciously. When the main duty or function of the conductor is to issue tickets,
collect the fare and deposit the same with the Road Transport Corporation. In the event
of his failure to do so, it will be misplaced sympathy to order his reinstatement instead of
dismissal. The Court accordingly set aside the order of the division bench and restored the
order of the single judge.
In UP State Road Transport Corporation v. Vinod Kumar 161 , a workman was found
carrying passengers without issuing tickets. The management, after holding a domestic
inquiry, terminated his services. Thereupon, the workman raised an industrial dispute in
which he challenged the conclusion arrived at by the inquiry officer as also the punishment
awarded to him by the disciplinary authority. However, the labour court held that the
charge of misappropriation had not been proved and thus, punishment of removal from
service was harsh. It therefore, held that the removal be substituted by stoppage of one
increment without any cumulative effect and directed him to be reinstated with full back
wages. On a writ petition filed by the management, the High Court confirmed the order of
reinstatement but instead of full back wages, it ordered 50 per cent of the back wages. In an
appeal before the Supreme Court against this order, the Court held that since the respondent
had not challenged the correctness or the legality of the inquiry conducted, it was not
open to the labour court to go into the findings recorded by the inquiry officer regarding
the misconduct committed by the workman. The Court observed that it is a well-settled
legal position that punishment of removal/ dismissal is the appropriate punishment for an
employee found guilty of misappropriation of funds; and the court should be reluctant to
reduce the punishment on misplaced sympathy for a workman. The Court also held that
there was nothing wrong in the employer losing confidence or faith in such an employee
and awarding punishment of dismissal. The Court reiterated that there is no place for
generosity or misplaced sympathy on the part of judicial forums and interfering with the
quantum of punishment. The Court accordingly set aside the judgement of the High Court
as well as the award of labour court and restored the order of removal from service ordered
by the disciplinary authority.
In Divisional Manager, Rajasthan SRTC v. Kamruddin 162, a conductor employed by the
Rajasthan State Roadways Corporation during his probationary period of two years was
charged for carrying passengers without tickets on not less than five occasions for which
he was given warnings. He was again found guilty of not issuing tickets to two passengers
and carrying large quantities of luggage. The management, after holding a deparbnental
inquiry, terminated his services. He then raised an industrial dispute which was referred
to the labour court. The court found the inquiry to be in order but held that the punishment
was disproportionate to the gravity of the misconduct. It accordingly substituted the
order of termination to stoppage of two increments with cumulative effect and ordered
his reinstatement with continuity in service but without back wages. The award of the
labour court was upheld by the High Court. Against this order, a special leave to appeal
was filed before the Supreme Court. Dealing with the case, the Court referred to its earlier
decision in Karnataka SRTC v. B D Hullikatti 163 and Rajasthan SRTC v. Ghamshyam Sharma 164

161 (2oos) 1 sec 115.

162 (2009) 7 sec 552.
163 (2001) 2 sec 574.
164 (2002) 10 sec 330.
602 • Industrial Relations and Labour Laws

and observed that it is now a settled legal position that if a conductor of a corporation
whose main duty or function is to issue tickets, collect fare and deposit the same with the
corporation was either dishonest or so grossly negligent in performing his duty, he was
not fit to be retained as a conductor whose acts of omission and commission were bound
to cause financial loss to the corporation. It felt that such a workman should be shown the
door. The Court also pointed out that it would be misplaced sympathy to award him lesser
punishment. It therefore, restored the order of termination of service by the management
and set aside the award of the labour court. It observed that even though the power of the
labour court or industrial tribunal in terms of Section 11-A of the IDA to interfere with the
quantum of punishment cannot be denied, but it is also a well-settled principle of law that
the said power has to be exercised judiciously.
In UP State Road Transport Corporation v. Nanhe Lal Kushwaha 165, the respondent who was
employed as a bus conductor by the corporation was charged for carrying passengers without
tickets on six occasions. The management, after holding a deparbnental inquiry, removed
him from service. He then raised an industrial dispute. The labour court found him guilty on
two occasions. It therefore, directed reinstatement with 75 per cent back wages. Against this
order, the management filed a writ petition before the Allahabad High Court which, without
assigning any cogent reason, modified the award to the extent that no back wages shall be
payable to the workman. Thereupon, the management filed an appeal before the Supreme
Court. The Supreme Court, relying on its earlier decision in UP SRTC v. Hoti Lal166, observed
that the conductor was holding a position of trust and acting in a fiduciary capacity. The
misconduct was serious and could not be dealt with leniently as was done both by the labour
court and the High Court. The Court also deprecated the practice followed by high courts in
disposing of writ petitions without assigning any cogent reason. It observed that the labour
courts should not ordinarily interfere with the discretion exercised by employers in awarding
punishment despite the wide discretion given to them under Section 11-A of the IDA. The
Court observed that it was not the amount of loss to the corporation which was material for
determining the quantum of punishment. It accordingly set aside the award of the labour
court and the judgement of the High Court and affirmed the order of the management.
In the same year, the above issue was again raised in UPSRTC v. Suresh Chand Sharma 167•
In this case, the respondent was a conductor with UP Roadway Transport Corporation and
was found carrying 13 passengers without tickets on 24 May 1987. Again on 10 May 1988,
he was found carrying 10 passengers without tickets. On both occasions, he had recovered
the fare from them. The management, after holding an inquiry, dismissed the respondent.
The workman then preferred a deparbnental appeal which was rejected. He then raised an
industrial dispute which was referred by the appropriate government to the labour court
for adjudication. The labour court held that the inquiry had been held strictly in accordance
with law and both charges in respect of the two incidents were found duly proved. Therefore,
the employee was not entitled to any relief whatsoever.
Being aggrieved, the employee challenged the award by filing a writ petition before
the Allahabad High Court. The High Court allowed the petition partly and directed the
reinstatement of the employee without back wages. Thereupon, the appeal was filed before
the Supreme Court. The Supreme Court found that the High Court had decided the writ

165 2010 LLR 230.

166 (2003) 3 sec 605.
167 2010 (6) SCALE 87.
 Management of Disdpline and Disdplinary Procedure • 6 o3

petition only on the ground that the passengers were found without tickets and the cash
was with the employee when checked. No other reasoning whatsoever was given by the
court. The Supreme Court referred to the decision in State of Haryana v. Rattan Singh wherein
it has categorically held that the only right of a delinquent employee is that he must be
informed as to what are the charges against him and he must be given full opportunity to
defend himself on the said charges. However, the Court rejected the contention that inquiry
report stood vitiated for not recording the statement of the passengers who were found
travelling without tickets.
In view of the above, the Court held that the reasoning given by the High Court cannot
be sustained in the eyes of law. The Court added that the High Court is under an obligation
to give not only the reasons but cogent reasons while reversing the findings of fact recorded
by a domestic tribunal. In case the judgement and order of the High Court is found not duly
supported by reasons, the judgement itself stands vitiated.
The Court also rejected the contention of the employee that for embezzlement of such
a petty amount, punishment of dismissal could not be justified for the reason that it is not
the amount embezzled by a delinquent employee but the intention to misappropriate public
money. In view of the above, the Court set aside the judgement and order of the High Court.
An examination of the aforesaid decisions reveals that the courts have taken non-
issuance of tickets by conductors to be a case of serious misconduct and maintained the
punishment of dismissal awarded by managements. It is hoped that this line of approach
would deter employees from committing such misconduct and would also help in
maintenance of discipline.
2. Misplacement of File
Section 11-A of the Industrial Disputes Act, 1947 empowers the labour court to evaluate
severity of misconduct and to assess whether the punishments imposed by the employer are
commensurate with the gravity of misconduct. The Supreme Court in Dev Singh v. Punjab
Tourism Development Corporation Ltd168 had an opportunity to delineate the scope of interference
under Section 11-A. In this case, the Punjab Tourism Development Corporation terminated
the services of an employee (who served the corporation for about 20 years with unblemished
service) for mere misplacement of a file. Such misplacement of file was not proved to be a
deliberate act with ulterior consideration, but was at the most an act of negligence. On these
facts, the Supreme Court held that the punishment of dismissal for mere misplacement of a
file without any ulterior motive is too harsh a punishment which is totally disproportionate
to the misconduct alleged and the appellant be imposed a punishment of withholding of one
increment including stoppage in substitution of the punishment of dismissal awarded by
the disciplinary authority. Dealing with the general principle of interference, the Court ruled
that normally courts will not interfere with the punishment as imparted by the disciplinary/
appellate authorities but when it shocks the conscience of the Court, it can mould the relief
in exceptional cases which should be supported with cogent reasons.
3. Assault of Senior Officer
In India Railways Construction Co. Ltd v. Ajay Kumar 169, an employee on probation allegedly
assaulted a senior officer along with others and ranasacked the office by creating chaotic

168 2003 LLR 1023.

169 2003 LLR 337.
604 • Industrial Relations and Labour Laws

conditions. The employer, therefore terminated his service without holding an inquiry. On
these facts, the Supreme Court laid down the following principles:
(i) It is fairly well settled that the power to dismiss an employee by dispensing with an
inquiry is not to be exercised so as to circumvent the prescribed rules. The satisfaction as
to whether the facts exist to justify dispensing with inquiry has to be of the disciplinary
authority. Where two views are possible as to whether holding of an inquiry would
have been proper or not, it would not be within the domain of the Court to substitute
its view for that of the disciplinary authority as if the Court is sitting as an appellate
authority over the disciplinary authority. The contemporaneous circumstances can
be duly taken note of in arriving at a decision whether to dispense with an inquiry or
not. What the High Court was required to do was to see whether there was any scope
for judicial review of the disciplinary authority's order dispensing with inquiry. The
focus was required to be on the impracticability or otherwise of holding the inquiry.
(ii) An employee, even if he claims to be a member of the employees' union, has to act
with a sense of discipline and decorwn. Presentation of demands relating to employees
cannot be exhibited by muscle power. It must be borne in mind that every employee
is a part of a functioning system, which may collapse if its functioning is affected
improperly. For smooth functioning, every employer depends upon a disciplined
employees' force. In the name of presenting demands they cannot hold the employer
to ransom. The employer has a duty to look into as as far as practicable and obviate
the genuine grievances of the employees. The working abnosphere should be cordial,
as that would be in the best interest of the establishment. Unless an abnosphere of
cordiality exists, there is likelihood of inefficient working and that would not be in
the interest of the establishment and would be rather destructive of common interest
of both employer and employees.
(iii) The alleged acts are prima facie acts of misconduct. Therefore, the employer can
legitimately raise a plea of losing confidence in the employee, warranting his non-
continuance in the employment. The time gap is another significant factor.
The Court accordingly held that compensating in lieu of reinstatement with back wages
would be appropriate relief to the employee, more so when he has lost the confidence of
management.
In Muriadih Colliery BCC Ltd v. Bihar Colliery Kamgar Union 170, the workman assaulted
the senior officials and hampered discharge of their duties. On these facts, the Supreme
Court referring to its earlier decisions observed:

The courts below by condoning an act of physical violence have undermined

the discipline in the organization, hence, in the above factual backdrop, it can
never be said that the industrial tribunal could have exercised its authority
under Section 11-A of the Act to interfere with the punishment of dismissal.
InM P Electricity Board v. Jagdish Chandra Sharma 171 , the respondent, an employee working as
a muster-roll labourer in the MP Electricity Board (appellant) while in employment allegedly
assaulted a superior officer in the presence of other employees with a tension screw on his
back and nose, which resulted in fracture of the nose and severe bleeding. This incident

170 (2005) 3 sec 331.

171 (2005) 3 sec 401.
 Management of Disdpline and Disdplinary Procedure • 605

was followed by unauthorized absence from work for several days. The management after
holding a domestic inquiry terminated his services. The respondent-employee raised an
industrial dispute. The appropriate government referred the dispute to the labour court
for adjudication. The labour court, though did not disagree with the finding of the inquiry
on the inflicting of injuries on the superior officer or on the unauthorized absence and the
consequent violations of the service rules, took the view that the punishment of termination
inflicted on the employee was punnitive in nature. According to the court, the employee
who had been kept out of service till the date of the decision was enough punishment in the
circumstances. Therefore, exercising its power under Section 107-A of the Madhya Pradesh
Industrial Relations Act, 1906, which corresponds to Section 11-A of the Industrial Disputes
Act, the labour court set aside the punishment of termination and ordered reinstatement of
the employee but without back wages. Thereupon, the employer filed an appeal before the
industrial court challenging the labour court's interference with the punishment imposed
by the employer. The employee also filed an appeal challenging the denial of back wages.
The industrial court held that the labour court acted illegally and perversely in interfering
with the punishment awarded on the findings at the inquiry accepted by the labour court.
Therefore, it set aside the order of the labour court and held that the termination of service
as a punishment was justified in the circumstances.
Aggrieved by the decision of the industrial court, the employee filed a writ petition in
the High Court of Madhya Pradesh invoking Articles 226 and 227 of the Constitution. The
High Court held that the charges against the employee stood proved but since the labour
court had decided to award a lesser punishment, the same should not have been interfered
with by the industrial court. Thus, the High Court set aside the decision of the industrial
court and restored the decision of the labour court. Against this order, both the employer
and the employee challenged this decision of the High Court in an appeal by special leave
before the Supreme Court. While the employer has questioned the interference with the
punishment awarded, the employee questioned the denial of back wages to him. The three-
judge bench of the Supreme Court observed:

In the case on hand, the employee had been found guilty of hitting and injuring
his superior officer at the workplace, obviously in the presence of other
employees. This clearly amounted to breach of discipline in the organization.
Discipline at the workplace in an organization like the employer herein, is the
sine qua non for the efficient working of the organization. When an employee
breaches such discipline and the employer terminates his services, it is not open
to a labour court or an industrial tribunal to take the view that the punishment
awarded is shockingly disproportionate to the charge proved. We have already
referred to the views of this Court. To quote Jack Chan:

'discipline is a form of civilly responsible behaviour which helps maintain social

order and contributes to the preservation, if not advancement, of collective
interests of society at large.'

Obviously, the idea is more relevant in considering the working of an

organization like the employer herein or an industrial undertaking. Obedience
to authority in a workplace is not slavery. It is not violative of one's natural
rights. It is essential for the prosperity of the organization as well as that of its
606 • Industrial Relations and Labour Laws

employees. When in such situation, a punishment of termination is awarded for

hitting and injuring a superior officer supervising the work of the employees,
with no extenuating circumstance established, it cannot be said to be not
justified. It cannot certainly be termed unduly harsh or disproportionate. The
labour court and the High Court in this case totally misdirected themselves
while exercising their jurisdiction. The industrial court made the correct
approach and came to the right conclusion.
The Court therefore, allowed the appeal filed by the employer, set aside the decision of
the High Court, restored the decision of the industrial court and thereby the punishment
awarded by the employer was upheld. The appeal filed by the employee was also dismissed.
In Hombe Gowda EDN Trust v. State of Karnataka 172, the respondent, a teacher, abused the
head of the institution in filthy language and assaulted him with a chappal. The management,
therefore, dismissed the teacher. However, the tribunal in place of dismissal ordered
withholding of three increments. On appeal, the Supreme Court held that punishment of
dismissal from service cannot be said to be wholly inadequate punishment. The Court also
held that to keep the appellant within the bounds of well disciplined conduct, a further
punishment is also called for and should be imposed so that our humanistic approach
may not induce him to repeat his intemperate performance. A person, when dismissed
from service, is put to great hardship but that would not mean that a grave misconduct
should go unpunished. Although the doctrine of proportionality may be applicable in such
matters, but a punishment of dismissal from service for such a misconduct cannot be said
to be unheard of. Maintenance of discipline in an institution is equally important. Keeping
the aforementioned principles in view, we may hereinafter notice a few recent decisions
of this Court. It was added: 'This Court has come a long way from its earlier view-points.
The recent trend in the decisions of this Court seeks to strike a balance between the earlier
approach of industrial relations wherein only the interest of the workmen was sought to
be protected with the avowed object of fast industrial growth of the country. In several
decisions of this Court, it has been noticed that how discipline at the workplaces/industrial
undertaking received a set-back. In view of the change in economic policy of the country,
it may not now be proper to allow the employees to break discipline with impunity. Our
country is governed by rule of law. All actions, therefore, must be taken in accordance
with law. Law declared by this Court in terms of Article 141 of the Constitution of India, as
noticed in the decisions noted supra, categorically demonstrates that the tribunal would not
normally interfere with the quantum of punishment imposed by the employers unless an
appropriate case is made out therefor. The tribunal, being inferior to this Court, was bound
to follow the decisions of this Court which are applicable to the fact of the present case in
question. The tribunal can neither ignore the ratio laid down by this Court nor refuse to
follow the same. The Court accordingly allowed the appeal.
4. Unauthorized Leave
A survey of decided cases reveals that the Supreme Court has taken a serious view of absence
on account of unauthorized leave.
In Delhi Transport Corporation v. Sardar Singh 173, the Delhi Transport Corporation
initiated deparbnental proceedings against respondents who were conductors on the ground

172 2006 LLR 141.

173 (2004) 7 sec 574.
 Management of Disdpline and Disdplinary Procedure • 607

of unauthroized long absence from duty, negligence of duties and lack of interest in the
employer's work. Such acts amounted to misconduct under Paras 4 (11) and 19 (h) of the
Standing Orders issued under Para 15 (1) of the Delhi Road Transport Authority (Conditions
of Appoinbnent and Service Regulation, 1952) which were applicable to respondents.
After having found the respondents-conductor guilty, the disciplinary authority imposed
punishment of dismissal/removal from service. Since an industrial dispute was already
pending before the industrial tribunal, the corporation filed an application for approval of
its action before the said tribunal under Section33(2) (b) of the Industrial Dispute Act, 1947.
The tribunal found that proper inquiry was not held. It, therefore, granted opportunity to the
corporation to adduce further evidence to justify its action. The corporation, therefore, led
further evidence. But, the tribunal on consideration of materials brought before it, held that
absence from duty without leave, amounted to non-sanction of leave and did not amount
to misconduct. Thus, availing leave without pay also did not amount to misconduct. In
view of this, the tribunal refused to grant approval to the action taken by the corporation,
mainly on the ground that in most cases, the leave was treated without pay and that being
the position it cannot be said that the absence was unauthorized. Against this order, the
corporation preferred a writ petition before the High Court. The single judge of the High
Court held that the disapproval by the tribunal was not in order. Thereupon, the respondent
conductors filed letters patent appeals before the Delhi High Court. The division bench of the
High Court affirmed the findings of the tribunal and reversed the decision of the single judge.
Aggrieved by this order, the corporation filed appeals by special leave in the Supreme Court.
On these facts, the Supreme Court held :
(i) Mere making of an application after or even before absence from work does not in any
way assist the employee concerned. The requirement is obtaining leave in advance.
In all these cases, the absence was without obtaining leave in advance.
(ii) When an employee absents himself from duty, even without sanctioned leave for a
very long period, it prima facie shows lack of interest in work. Para 19(h) of the Standing
Orders as quoted above relates to habitual negligence of duties and lack of interest in
the authority's work. When an employee absents himself from duty without sanctioned
leave, the authority can, on the basis of the record, come to a conclusion about the
employee being habitually negligent in duties and exhibiting lack of interest in the
employer's work.
(iii) Ample material was produced before the tribunal in each case to show as to how the
employees concerned were remaining absent for long periods which affects the work
of the employer and the employee concerned was required at least to bring some
material on record to show as to how his absence was on the basis of sanctioned leave
and as to how there was no negligence.
(iv) Habitual absence is a factor which establishes lack of interest in work. There cannot be
any sweeping generalization. But at the same time, some telltale features can be noticed
and pressed into service to arrive at conclusions in the deparbnental proceedings.
(v) Conclusion regarding negligence and lack of interest can be arrived at by looking into
the period of absence, more particularly, when leave is unauthroized.
(vi) Burden is on the employee who claims that there was no negligence and/or lack of
interest to establish it by placing relevant materials.
(vii) Clause (ii) of para 4 of the Standing Orders shows the seriousness attached to habitual
absence. In Clause (i) thereof, there is requirement of prior permission. Only exception
608 • Industrial Relations and Labour Laws

made is in case of sudden illness. There also conditions are stipulated, non-observance
of which renders the absence unauthorized.
The Court, accordingly allowed these appeals and affirmed the view taken by the single
judge while reversing that of the division bench.
In State of Punjab v. Jagir Singh 174, a driver in Punjab Roadways absented himself from
duty without applying for leave. He was asked to report for duty by a registered letter
but despite the same, he failed to report for duty. A notice was therefore published in a
newspaper stating the date by which he was required to resume his duty. When he failed
to do so even thereafter, the management terminated his service on the ground of his being
absent from duty. Thereupon, the driver raised an industrial dispute and the labour court by
an award reinstated him with continuity of service and full back wages. On a writ petition
filed by the management, the High Court held that the workman was entitled to 60 per
cent of the back wages. Aggrieved by this both the state and workman filed special leave
to appeal petitions in the Supreme Court. The Supreme Court held that the finding of the
labour court were incorrect and self-contradictory and it had failed to consider the conduct
of the workman in not joining duty despite having been asked to do so by a registered letter
as well as publication of a notice in the newspapers.
The aforesaid view was reiterated in New India Assurance Co. Ltd. v. Vipin Behari
Srivastava 175 • Here, the respondent-workman remained absent unauthroizedly for more
than 600 days. The management after holding deparbnental inquiry removed the workman.
Thereupon, the workman raised an industrial dispute which was referred to the tribunal.
The tribunal held that the respondent was suffering from tuberculosis and had applied
for medical leave but management took no action. It, therefore, granted reinstatement. On
a writ petition, the High Court upheld the order of the tribunal. On appeal, the Supreme
Court noticed that 'no leave was due and even leave without pay cannot be granted'. The
Court reiterated its earlier view and ruled:
(i) Mere sending of an application for grant of leave much after the period of leave was
over as also the date of resuming duties cannot be said to be a bona fide act on the part
of the workman. The bank, as noticed hereinbefore, in response to the lawyer's notice
categorically stated that the workman had been carrying on some business elsewhere.
(ii) Only because on a later date an application for grant of medical leave was filed, the
same ipso facto would (not) put an embargo on the exercise of the jurisdiction of the
bank from invoking clause 2 of the bipartite settlement.
(iii) The Court evolved the new concept of limited inquiry in a case of this nature. The
principles of natural justice were required to be complied with but the same would
not mean that a full-fledged deparbnental proceeding was required to be initiated. A
limited inquiry as to whether the employee concerned had sufficient explanation for
not reporting for duty after the period of leave had expired or failure to resume duty
when asked to do so would suffice.
The Court accordingly set aside the order of the tribunal and the High Court.
The aforesaid decision requires a careful examination. It is true that 'mere sending
of application for grant of leave' cannot amount to grant of leave but in an exceptional
situation where the workman suffering from tuberculosis applied for medical leave, the

174 (2004) s sec 1209.

175 (200s) 3 sec 446.
 Management of Disdpline and Disdplinary Procedure • 609

above principle cannot be applied. Further, doctrine of limited inquiry should also not be
extended in this situation.
However in Jagdish Singh v. Punjab Engineering College176, the Supreme Court while
dealing with a case of unauthorized absence appears to have been influenced by sympathy
when it held that it was a case of violation of discipline and not of'gross violation of discipline'
and it is a case of unauthorized absenteeism but 'not a case of habitual absenteeism'.
In this case, the appellant was working as a sweeper in Punjab Engineering College.
He remained absent unauthorizedly for 7 days in February 2004 and 9 days in March 2004.
The management, after holding an inquiry, dismissed the workman. Thereupon, he filed
a writ petition before the High Court challenging the order of dismissal. The High Court
dismissed the petition. Aggrieved by the order, the appellant filed an appeal before the
Supreme Court. It was contended by the appellant that the punishment imposed by the
disciplinary authority was disproportionate to the gravity of misconduct, especially in view
of the explanation offered by the appellant for his unauthorized absence for a few days
and lesser punishment would meet the ends of justice. On the other hand, the respondent
submitted that unauthorized absence is a serious misconduct and the said charge having
been proved against the employee, the disciplinary authority was justified in imposing a
major penalty of dismissal from service. Dealing with the case, the Supreme Court observed:

The instant case is not a case of habitual absenteeism. The appellant seems to
have a good track record from the date he joined service as a sweeper. In his
long career of service, he remained absent for 15 days on four occasions in the
months of February and March, 2004. This was primarily to sort out the problem
of his daughter with her in-laws. The filial bondage and emotional attachment
might have come in his way to apply and obtain leave from his employer. The
misconduct that is alleged, in our view, would definitely amount to violation
of discipline that is expected of an employee to maintain in an establishment,
but may not fit into the category of gross violation of discipline. We hasten
to add that if it was habitual absenteeism, we would not have ventured to
entertain this appeal.
The Court accordingly allowed the appeal and set aside the order of the disciplinary
authority affirmed by the High Court. The Court held that taking the totality of facts and
circumstances of the case and having due regard to unblemished record of the appellant
and the reasons for which he remained absent without obtaining permission; the end of
justice would be met if the punishment imposed by the disciplinary authority is modified
to stoppage of two increments with cumulative effect and further declare that he would
not be entitled to any monetary benefits during the period he was out of service but that
period would be counted only for the purpose of his service benefits.
Regional Manager, Bank of Baroda v. Anita Nandrajog 177 saw irresponsible behaviour of the
bank employee to remain on unauthorized leave 'whenever she liked and for whatever
period she liked'. In this case, respondent number 2 remained absent from duty on two
occasions, i.e. from 4 August 1986 to 29 March 1987 and again from 20 September 1987 to
10 April 1988 (more than 266 days), but the petitioner bank condoned the aforesaid acts of
absence for leaving the country without permission. She again left for Libya on 22 August

176 (2010) 1 SLR 166.

177 2009 LLR 1135.
61 o • Industrial Relations and Labour Laws

1988 without permission and without sanctioned leave. She did not resume her duties for
more than 150 consecutive days. The petitioner bank therefore invoked the provisions of
clause 17(b) of the Fifth Bipartite Settlement and issued notice to her to report for duty
within 30 days, failing which it would be presumed that she had voluntarily retired from
the service of the bank. But she did not report for duty and instead send two letters to the
bank in which she stated that she would be resuming duty in the last week of August 1989
and in the second letter, she requested for extension of leave without pay up to April 1990 on
the ground of her domestic problems. Despite her letter, she did not resume duty in the last
week of August 1989. Through communication dated 25 August 1989, the petitioner bank
treated the respondent as having voluntarily terminated her employment, and asked her to
approach the authority concerned for claiming terminal benefits. Aggrieved by this order,
the respondent approached the ministry of labour, Central Government which referred the
dispute to the labour court for adjudication. The tribunal held that the termination order
was illegal and unjustified. Against the order of the tribunal, the bank filed a writ petition
in Allahabad High Court which was dismissed. Thereupon, the bank filed a special leave
petition before the Supreme Court.
The main contention on behalf of the respondent employee before the tribunal and
the high court was that she was neither given any charge-sheet nor was any inquiry held
regarding her misconduct of being absent without leave, and hence the order dated 25
August 1989 was illegal and against the principles of natural justice. On the other hand, the
contention on behalf of the bank was that no inquiry was necessary since clause 17(b) of
the Fifth Bipartite Settlement dated 10 April 1989 was being invoked. The Supreme Court
observed that the management had been extremely lenient to the respondent by condoning
her absence without leave on the first occasion for a period of about 7 months. 'However,
the respondent thought that she could do whatever she liked for whatever period she liked.'
She again sent an application for leave for 60 days which was not sanctioned. However, she
remained absent without leave and kept sending letters for extension of leave although she
was on unauthorized absence.
In the bank's letter, it was clearly mentioned in clause 4 that the respondent did not
have any leave remaining to her credit yet she had remained on unauthorized leave for a
period of more than 150 days continuously and it appeared she had no intention of joining
duty. She was asked to report for duty within 30 days, failing which it would be deemed
that she had taken voluntary retirement from service. In reply, she wrote a letter that she will
be joining duty in the last week of August 1989 but she wrote another letter for extension of
leave till April 1990 on account of domestic problems. In view of this, the Court remarked
that such behaviour on the part of an employee is clearly unfortunate and highly improper.
The Court referred to clause 17(b) of the Bipartite Settlement and observed that if an
employee is absent without leave for more than 150 days and has no more leave to his/
her credit, then the bank can validly order voluntary cessation of employment. Further,
under clause 17(b), when the management is reasonably satisfied that the employee has no
intention of joining duty, it may call upon the employee to report for duty within 30 days
failing which action can be taken. Such a notice was given by the bank but the respondent
wanted leave till April 1990, i.e. for another 8 months. The Court found that she had no
intention of resuming duty within 30 days. The Court accordingly held that the action of
the bank in terminating her service on the ground of voluntary cessation of employment
was valid. The appeal was accordingly allowed.
 Management of Disdpline and Disdplinary Procedure • 6 11

The aforesaid judgement is more in conformity with Syndicate Bankv. General Secretary,
Syndicate Bank Staff Association 178 and Aligarh Muslim University v. Mansoor Ali Khan 179•
In contrast to the aforesaid decisions, the Supreme Court in Chairman-cum-Managing
Director, Coal India Ltd v. Mukul K Choudhuri180, took a different line of approach. Here,
the respondent, after expiry of sanctioned leave for 14 days, did not report for duty and
despite reminders, remained absent for 6 months without any authorization. Thereupon,
the management initiated disciplinary inquiry against him under rule 29 of the Coal India
Executives Conduct, Discipline and Appeal Rules, 1978 for misconduct on his part by (i)
absenting himself without leave, (ii) overstaying the sanctioned leave for more than 4
consecutive days and (iii) desertion of job and failure to maintain integrity and devotion
to duty. During pendency of inquiry, the respondent sent a letter of resignation which was
not accepted by the management. Accordingly, he joined duty. He also appeared before
the inquiry officer and admitted the charges levelled against him. The inquiry officer held
that the delinquent was guilty of the charges mentioned in the charge-sheet. Upon receipt
of the inquiry report, a second show-cause notice was issued. The delinquent was asked to
show cause as to why the punishment of termination of service be not awarded to him. A
copy of the inquiry report was sent along with the second show-case notice. Not satisfied
with his explanation, he was removed from service with immediate effect. He then pursued
departmental remedy but without any success. Thereupon, he filed a writ petition with the
High Court. The single judge of the High Court directed the reinstatement of the respondent
without back wages but with continuous service, without any break and without affecting
his seniority. On appeal, the division bench, besides reinstatement, held that he was entitled
to back wages from the year 2000 until reinstatement. Against this order, an appeal was filed
before the Supreme Court. The Court held that where the misconduct of the delinquent was
unauthorized absence from duty for 6 months but upon being charged of such misconduct,
he fairly admitted his guilt and explained the reason for his absence by stating that he did
not have any intention nor desire to disobey the order of higher authority or violate any of
the company's rules and regulations; but the reason was purely personal and beyond his
control and as a matter of fact, he sent his resignation which was not accepted. The order of
removal cannot be held to be justified, since no reasonable employer would have imposed
extreme punishment of removal in like circumstances. The Court felt that the punishment
is not only unduly harsh but grossly in excess of the allegations. The Court, therefore
affirmed the order of reinstatement but without back wages for the entire period by way
of punishment for the proved misconduct of unauthorized absence for 6 months.
It is difficult to reconcile the aforesaid decision with other decisions of the Supreme
Court discussed above. It is surprising that the Court even did not mention its earlier
decisions.
5. Consequences of Persistent Refusal to Join Duty at the Transferred Place
In Viveka Nanda Sethi v. Chairman, J&K Bank181 , the workman was a cashier-cum-clerk. He
was transferred to Kolkata but he did not join. After issuing a show-cause notice and taking a
lenient view, he was transferred to Amritsar, then to Simla and again to Amritsar. He applied
for leave for 28 days which was sanctioned. A further leave for 9 days was also sanctioned.

178 (2000) 5 sec 65.

179 JT 2000 (7) SC 529.
180 2009 III CLR 645 (SC).
181 2005 LLR 641 (SC).
612 • Industrial Relations and Labour Laws

He again applied for 1 month's leave although he had only 25 days of accumulated leave
and his leave account had already been debited by 50 days' medical leave. Despite the expiry
of the period of leave, he did not join. An explanation was called and he was asked to join
duty immediately. A show-case notice was therefore, served on him, where under he was
intimated that in the event of his failure to resume duty by 15 January 1984, he would be
deemed to have discharged from the service of the bank. In reply, a telegram was received
from another person saying that the said workman was unwell and would not join on the
said date. He again applied for medical leave on 15 February 1984, i.e., one month after the
telegram. The bank dispensed with his services invoking bipartite settlement. A legal notice
was served by the workman on the bank asking for reinstatement. Conciliation proceedings
were initiated and later a reference was made by the Central Government. The CCIT ordered
reinstatement without back wages. Thereupon, a writ petition was filed by the bank and
also by the workman for grant of back wages. Both the single judge and the division bench
held that it was obligatory on the part of the bank to conduct full-fledged departmental
proceedings. However, the High Court dismissed the petition of the workman. Thereupon,
he filed an appeal before the Supreme Court. The Supreme Court ruled:
(a) It may be true that in a case of this nature, the principles of natural justice were required
to be complied with but the same would not mean that full-fledged departmental
proceedings were required to be initiated. A limited inquiry as to whether the employee
concerned had sufficient explanation for not reporting for duty after the period of
leave had expired or failure on his part on being asked to do so, amount to sufficient
compliance with the requirements of natural justice.
(b) Mere sending of an application for grant of leave much after the period of leave was
over cannot be said to be a bona fide act.
(c) The workman's appeal under 17-B cannot be entertained as he did not file an affidavit.
The Court accordingly allowed the appeal of the bank that the workman should be dismissed.
In Novartis India Ltd v. State of West Bengal 182, the management dismissed an employee
for not joining the place to which he had been transferred without holding a domestic inquiry.
The court held that the same was hit by principles of natural justice and such dismissal could
only be effected after holding a domestic inquiry /disciplinary proceedings. However, the
Supreme Court ruled:

When an employee does not join at his transferred place, he commits a

misconduct. A disciplinary proceeding was, therefore, required to be initiated.
The order of discharge is not a substitute for an order of punishment. If an
employee is to be dismissed from service on the ground that he had committed
a misconduct, he was entitled to an opportunity of hearing. Had such an
opportunity of hearing been given to him, he could have shown that there
were compelling reasons for his not joining at the transferred place. Even a
minor punishment could have been granted.
In Kallakurichi Taluk Cooperative Housing Society Ltd v. M Maria Soosai183, the respondent
joined the posttowhichhe had been transferred butthereafter, unilaterally stopped coming
to work without submitting any leave application or prior intimation and that too not for a

182 (2009) 3 sec 124.

183 2010 LLR 1016; (2010) 6 sec 690.
 Management of Disdpline and Disdplinary Procedure • 6 1 3

few days but for many months. Despite the maximum latitude shown to him by allowing
him to rejoin duty in the appellant society, the respondent again failed to report for work.
As a result, he was placed under suspension and a domestic inquiry was conducted in
which he was found guilty of the charges brought against him. However, the High Court
ordered reinstatement which was complied with by the management. On appeal, the
Supreme Court observed:

It is, in fact, surprising as to why a decision was taken to consider his case
on a compassionate basis despite lapses of his own making. The decision of
the appellant society to reappoint respondent 1 on compassionate grounds
leading to the order of the registrar (housing) dated 27 July 1995, permitting
the appellant society to reappoint him was in itself a concession made to
respondent 1 which he missed subsequently.
The Court held that in such circumstances, the judgement and order of the division bench
of the High Court cannot be sustained and must necessarily be set aside. 'However, having
regard to the fact that a domestic inquiry was conducted against respondent 1 in which
he was found guilty, we do not propose to interfere with that part of the order impugned
directing reinstatement, but we are not inclined to maintain the order of the division bench
of the High Court regarding payment of back wages.'
6. Abusing and Threatening a Superior Officer
In Rama Kant Mishra v. State of UP 184, the workman was charge-sheeted for abusing an official
saying,' Are these persons your father? I will make you forget your high-handedness either
here or somewhere else.' On these facts, the Supreme Court ruled that the labour court has
jurisdiction and power to interfere when it finds that the order of discharge/ dismissal was
not justified. The Court directed reinstatement with back wages but withheld two increments.
In Ved Prakash Gupta v. Mis Delton Cable India Ltd185, the workman, besides other charges,
was also guilty of abusing in filthy manner /language, namely 'You may go to Vijay Kumar
or Ram Kumar'. On these facts, the Supreme Court held that the charges levelled against
him were not serious and it was not known how these charges would result in total loss of
confidence of the management. The Court accordingly directed reinstatement.
In B C Chaturvedi v. Union of India 186, the three-judge bench of the Supreme Court
held that under Section 11-A, the High Court's interference is permissible only when the
punishment/penalty is shockingly disproportionate.
In UP State Road Transport Corporation v. Subhash Chandra Sharma 187, the charge
against the respondent was that in a drunken state, he along with the conductor went to
the assistant cashier in the cash room of the appellant and demanded money from him.
When the assistant cashier refused, the respondent abused him and threatened to assault
him. On these facts, the Supreme Court observed that, 'It was certainly a serious charge of
misconduct against the respondent. In such circumstances, the labour court was not justified
in interfering with the order of removal of the respondent from service when the charge
against him stood proved. Rather we find that the discretion exercised by the labour court
in the circumstances of the present case was capricious and arbitrary and certainly not

184 2003 LLR 895.

185 1982 Lab IC 1790(SC).
186 1984 Lab IC 658.
187 1995 (6) sec 749.
614 • Industrial Relations and Labour Laws

justified. It could not be said that the punishment awarded to the respondent was in any way
"shockingly disproportionate" to the nature of charges proved against him. In our opinion,
the High Court failed to exercise its jurisdiction under Article 226 of the Constitution and
did not correct the erroneous order of the labour court which, if allowed to stand, would
certainly result in miscarriage of justice.'
In Kailash Nath Gupta v. Inquiry Officer (R K Raj), Allahabad Bank188, the Supreme Court
went a step further when it said that the power of interference of tribunal with the quantum
of punishment awarded by the management is extremely limited.
In Mahindra & Mahindra Ltdv. NB Naravada 189, the respondent workman used abusive
and filthy language against his supervisor. Thereupon, the management, after holding a
domestic inquiry, terminated his service. The labour court came to the conclusion that under
Section 11-A, the punishment was harsh and improper and deserved to be set aside. It
therefore, directed reinstatement with continuity of service but with 2/3rd of the back wages.
On a writ petition, a single judge of the High Court dismissed the petition. On appeal, the
division bench of the High Court also dismissed the petition. Thereupon, the management
filed an appeal before the Supreme Court. The Supreme Court reversed the judgements of
the lower courts and ruled:
1. The discretion vested in the labour court under Section 11-A is not unlimited.
2. The discretion which can be exercised under Section 11-A is available on existence
of certain factors, namely: (i) punishment being disproportionate to the gravity
of misconduct so as to disturb the conscience of the court, (ii) the existence of
any mitigating circumstances which require reduction of the sentence, or (iii) the
past conduct of the workman which may persuade the labour court to reduce the
punishment.
3. In the absence of any such factor, the labour court cannot by way of sympathy alone
exercise power under Section 11-A and reduce the punishment.
4. Punishment of dismissal for using abusive language cannot be held to be
disproportionate.
5. The language used by the workman is such that it cannot be tolerated by any civilized
society. Use of such abusive language against a superior officer, that too not once but
twice, in the presence of subordinates cannot be said to be indiscipline calling for lesser
punishment.
The Court accordingly set aside the order of lower courts and upheld the dismissal order
of the disciplinary authority.
In L K Verma v. HMT Ltd190, the Supreme Court ruled:
1. As regards the quantum of punishment, suffice it to say that verbal abuse has been
held to be sufficient for inflicting a punishment of dismissal.
2. Once the appellant accepted that he made utterances which admittedly lacked civility
and he also threatened a superior officer,itwasfor him to show that he later on felt
remorse. If he was under tension, at a later stage, he could have at least tendered
an apology. Furthermore, witnesses were examined and the charges were proved.

1sslbid.
189 (2003) 9 sec 32.
190 2006 LLR 296 (SC).
 Management of Disdpline and Disdplinary Procedure • 6 15

3. An order of suspension may be passed by the employer by way of punishment in

terms of conduct rules in exercise of its inherent power in the sense that he may not
take any work from the delinquent officer who may be paid only the subsistence
allowance specified therein.
In Biecco Lawrie Ltd v. State of West Bengal 191 , the respondent, a mazdoor in the switch gear
works, was charge-sheeted for instigation, insubordination and using of abusive language
against his superiors which was a major misconduct under the standing orders of the
appellant company. The respondent, through a letter, admitted to all the charges and sought
condonation and mercy attributing his acts to his mental illness. However, his plea was
rejected by the company on the ground that he had been charged on an earlier occasion also
on similar misconduct and was given a chance to make amends. On inquiry, the inquiry
officer held that the respondent was guilty of major misconduct. After consideration of
the report of the inquiry officer, the disciplinary authority dismissed him from service.
Thereupon, he raised an industrial dispute which was referred to the tribunal. The tribunal
held that there was violation of principles of natural justice. It heard the matter afresh on
merits. The tribunal on consideration of the inquiry report and evidence on record affirmed
the order of the disciplinary authority. Thereupon, the respondent approached the High
Court which set aside the order of the tribunal by holding that the charge of using abusive
language was not specific and was vague. It accordingly remitted the matter to the tribunal
for reconsideration on the basis of existing evidence only with respect to the charge of
disobedience. The decision was affirmed by the division bench of the High Court. The
management then filed an appeal before the Supreme Court. The Court observed that the
general trend of judicial decisions is to minimize interference when punishment is not
harsh for charges that are levelled against a respondent and in the instant matter, dismissal
is definitely not shocking to the conscience of the Court. It added that the High Court
misused the power vested in it by remanding the matter back to the industrial tribunal for
reconsideration when the charges were found proved. The tribunal also erred by reversing
its own decision.
Dealing with the argument that the work assigned to the respondent was not a part
of his job, the Court observed that even if it is accepted, it does not entitle him to abuse his
position and create an unhealthy abnosphere where the remaining workers might just take
a clue from the unruly behaviour and subsequently use it to the detriment of the company.
Further, the letter by which he accepted all the charges sets up strong proof against the
respondent beyond which nothing remains to be analysed. The Court accordingly, set aside
the order of the High Court and restored the order of dismissal passed against the respondent.
7. Sleeping while on Duty
In Bharat Forge Co. Ltd v. Uttam Manohar Nakate 19'2, the respondent who was working as
helper in the Bharat Forge Co. Ltd, was found sleeping on an iron plate in the first shift at
his work place. The management therefore, initiated disciplinary proceedings against him in
terms of the standing order 24(1) of the model standing orders framed under the Industrial
Employment (Standing Orders) Act, 1946. He was found guilty in the said domestic inquiry.
The management accordingly dismissed him from service. On a dispute being raised, the
labour court held that the punishment of dismissal imposed upon the employee was harsh
and disproportionate and no reasonable employer could impose such punishment for

191 (2009) 10 sec 32.

192 2005 LLR 210 (SC).
616 • Industrial Relations and Labour Laws

the proved misconduct. The tribunal therefore directed the management to reinstate the
respondent employee on his original post with continuity of service with 50 per cent back
wages for the period of his dismissal. Aggrieved and dissatisfied, both parties preferred
separate revision applications before the industrial tribunal. By a common judgement, the
revision application filed by the appellant was allowed and the respondent was dismissed.
The respondent thereupon filed a writ petition before the Bombay High Court and by
reason of the judgement and order, the said writ petition was dismissed. On a letter patent
appeal, the High Court quashed and set aside the order of the single judge as also of the
industrial court and directed the employer to pay a sum of f2,50,000 to the employee within
one month from the date of order. Thereupon, the management filed an appeal before the
Supreme Court. The Court ruled:

It is trite that the labour court or the industrial tribunal, as the case may be, in
terms of the provisions of the Act, must act within the four corners thereof.
The industrial courts would not sit in appeal over the decision of the employer
unless there exists a statutory provision in this behalf. Although its jurisdiction
is wide, but the same must be applied in terms of the provisions of the statute
and no other.

If the punishment is harsh, albeit a lesser punishment may be imposed, but such
an order cannot be passed on an irrational or extraneous factor and certainly
not on compassionate ground.
The Court accordingly set aside the order of the lower court.
8. Gheraoing the Manager and Causing Damage to the Property
In Management ofKrishnakali Tea Estate v. Akhil Bharatiya Chah Mazdoor Sangh 193, the workmen
concerned entered the estate armed with deadly weapons with a view to gherao the manager
and others and in that process, they caused damage to the property of the estate. They
wrongfully confined the manager and others from 8.30 pm on 12 October to 3 am the next
day. On these facts, the Supreme Court held that these charges are grave enough to attract
the punishment of dismissal even without the allegation of extortion. The Court added that
the fact that the management entered into a settlement with some of the workmen who
were also found guilty of the charge, would not in any manner reduce the gravity of the
misconduct with regard to the workmen concerned because these workmen did not agree
with the settlement to which others agreed.
9. Fraud and Corruption
In State Bank of India v. Bela Bagchi194, the bank employee was charge-sheeted for gross
misconduct as he had colluded with one of the branch managers and enabled grant of
fictitious loan to Ramkrishna while the real beneficiary was named Raghav. The employee
was dismissed after an inquiry. The single judge and division bench of the High Court
ordered reinstatement. The Supreme Court ruled that it is for the disciplinary authority
and not for the court to decide as to which punishment should be imposed on a delinquent
who has admitted his misconduct. The Supreme Court has held in a series of cases that
employees have to exercise a higher degree of honesty and integrity. The Court also held

193 JT 2004 (7) sec 333: (2004) s sec 200.

194 JT 2005 (8) sc 96: (2005) 7 sec 435.
 Management of Disdpline and Disdplinary Procedure • 6 1 7

that the bank employee concerned with the deposits of customers of the bank cannot be
permitted to tinker with the deposits in any manner.
In Damoh Panna Sagar Rural Regional Bank v. Munna Lal Jain 195, the manager of a
bank who had indulged in unauthorized withdrawals, subsequently returned the amount
with interest. Yet, the Supreme Court held that this conduct of unauthorized withdrawals
amounted to a serious misconduct.
In General Manager (P), Punjab and Sind Bankv. Daya Singh 196, the respondent who was
working as manager was found on vigilance inspection to have disbursed some 20 loans
to the tune of f16.48 lakh to some persons against FDRs which were in the names of other
persons. The management, after holding a domestic inquiry, dismissed the respondent.
However, the High Court set aside the order of dismissal and directed reinstatement. On
appeal, the Supreme Court held that there was clear documentary evidence on record in
the handwriting of the respondent which established his role in the withdrawal of huge
amounts for fictitious persons. The ledger entries also showed that whereas the FDRs were
in one name, the withdrawals showed the names of altogether different persons and they
were far in excess of the amounts in FDRs. The respondent had no explanation and therefore,
it had to be held that the respondent had misappropriated the amount. Dealing with the
order of the High Court, the Supreme Court observed that in spite of a well-reasoned order
by the inquiry officer, the High Court had interfered therein by calling the same as sketchy.
The High Court has completely overlooked the role of the bank manager. In view of this,
the Court set aside the impugned judgement and order passed by the division bench of
the High Court.
Can the dismissal of a bank employee, guilty of dishonesty and misappropriation be
set aside merely because though convicted by the criminal court, he has been released on
Probation of Offenders Act? This issue was raised in Sushil Kumar Singhal v. The Regional
Manager, Punjab National Bank197• In this case, the appellant who was appointed as a peon
was later confirmed on the said post in the respondent bank. He was handed over fS,000 in
cash for depositing dues for the telephone bill in the post office. However, on his failure to
deposit the same, the bank lodged an FIR under Section 409 of the Indian Penal Code, 1860.
The trialcourt convicted the appellant. Thereupon, the respondent bank issued a show-cause
notice to the appellant proposing dismissal from service and asked the appellant to respond
within 7 days. The respondent bank, on consideration of explanation dismissed him from
service. The appellant then raised an industrial dispute under the Industrial Disputes Act,
1947 which was referred to the tribunal. In the meanwhile, the appeal filed by the appellant
against the order of conviction was decided by the appellate court which maintained the
conviction, but granted him the benefit of probation under the Probation of Offenders Act,
1958 and released the appellant on probation. The tribunal in the award rejected the claim of
the appellant by holding his dismissal from service to be justified and in accordance with law.
Being aggrieved, the appellant challenged the said award of tribunal by filing a writ petition
before the High Court which was also dismissed. Thereupon, a special leave to appeal was
filed before the Supreme Court. The Court was invited to decide the question whether the
benefit granted to the appellant under the provisions of the Probation of Offenders Act,

195 (2005)10 sec 84.

196 2010 LLR 1029.
197 2010 LLJ 1025.
618 • Industrial Relations and Labour Laws

1958 makes him entitled to reinstatement in service. While dealing with the issue, the Court
referred to Section lO(l)(b)(i) of the Act, which reads as under:
No banking company shall employ or continue the employment of any person
who is, or at any time has been, adjudicated insolvent, or had suspended payment
or has compounded with his creditors, or who is, or has been, convicted by a
criminal court of an offence involving moral turpitude.
Interpreting the aforesaid provision, the Court pointed out that the management is under
an obligation to discontinue the services of an employee who is or has been convicted by
a criminal court for an offence involving moral turpitude. The Court also referred to the
dictionary meaning and a number of decided cases of the Supreme Court and held that moral
turpitude means anything contrary to honesty, modesty or good morals. It means vileness
and depravity. The Court added that the conviction of a person in a crime involving moral
turpitude impeaches his credibility and he has been found to have indulged in shameful,
wicked and base activities. The Court also observed that the embezzlement of f5,000 by
the appellant for which he had been convicted was an offence involving moral turpitude.
The statutory provisions of the Act, 1949, provide that the management shall not permit
any person convicted for an offence involving moral turpitude to continue in employment.
The Court also referred to the decision inManish Goel v. Rohini Goel 198, wherein it held
that no court is competent to issue a direction contrary to law nor can it direct an authority
to act in contravention of the statutory provisions. Indeed, the courts are meant to enforce
the rule of law and not to pass orders or directions which are contrary to what has been
injucted by law. In view of this, the Court held that once a criminal court grants a delinquent
employee the benefit of Probation of Offenders Act, 1958, its order does not have any bearing
so far as the service of such employee is concerned. The word,' disqualification' on Section
12 of the Probation of Offenders Act provides that such a person shall not stand disqualified
for the purpose of other Acts like Representation of People Act, 1950, etc. The Court added
that conviction in a criminal case is one part of the case and release on probation is another.
Therefore, grant of benefit of the provision of the Act only enables the delinquent not to
undergo the sentence on showing his good conduct during the period of probation. In case,
after being released, the delinquent commits another offence, benefit of the Probation of
Offenders Act, 1958 gets terminated and the delinquent can be made liable to undergo the
sentence. Therefore, in case of an employee who stands convicted for an offence involving
moral turpitude, it is his misconduct that leads to his dismissal. The Court accordingly
dismissed the appeal.
InPSEBv.LeelaSingh199,therespondentwasappointedasalinemaninPunjabElectricity
Board on the basis of the purported experience certificate produced by him. However, in
a vigilance inquiry, the charge against the respondent was that he had committed fraud in
obtaining the appoinbnent by production of a forged experience certificate. On the direction
of the appellant board, his services were terminated without holding a domestic inquiry.
A question arose whether in these circumstances, the appellant board could terminate the
services of the respondent, the Supreme Court held that the said charge was required to be
proved in a duly constituted deparbnental proceeding. The services could not have been
directed to be terminated relying on and/ or on the basis of the decision of the board. The

198 AIR 2010 SC 1099; JT 2010 (3) SC 189.

199 2007 LLR 590 (SC).
 Management of Disdpline and Disdplinary Procedure • 6 19

Court, therefore, directed the appellant board to initiate departmental proceedings against
the respondent.
In Municipal Committee, Bahadurgarh v. Krishnan Bihari200, the Supreme Court held that
in cases involving corruption, there cannot be any other punishment except dismissal. It
felt that any sympathy shown in such cases is totally uncalled for and opposed to public
interest. It also held that the amount misappropriated may be small or large but it is the act
of misappropriation that is relevant.
In Prabhulingappa H M Munichendragowda v. Divisional Controller, KSRTC, Kolar 201 , it
was held that the discretion which can be exercised under Section llA is available only on
the existence of certain factors like punishment being disproportionate to the gravity of
misconduct so as to disturb the conscience of the court. However, such discretion cannot
be exercised by the labour court under Section llA where appointment was obtained on
the basis of false certificate by playing a fraud.
10. Theft
In Depot Manager, Andhra Pradesh State Road Transport Corporation v. Raghuda Siva Sankar
Prasad202, the respondent was charged for committing a theft of fuel injection pump.
He was also involved in stealing an alternator bearing while working in the night shift.
The management, after holding a domestic inquiry, removed the respondent from the
corporation. Earlier, a criminal case was also initiated against him. The criminal court
acquitted the respondent of the charges that were levelled against him. Aggrieved by the
order of his removal, the respondent raised an industrial dispute. The labour court held
that the charges of respondent being involved in a case of theft of the property belonging
to the corporation were justified under the factual circumstances of the case. Aggrieved by
the award of the labour court, the respondent preferred a writ petition before the Andhra
Pradesh High Court. The single judge of the High Court held that the charges of theft were
correctly proved against the respondent. It however, came to the conclusion that punishment
of removal was not in consonance with the gravity of the charges proved against him. It
therefore, set aside the order of removal and directed reinstatement of the respondent with
continuity of service but without back wages.
On appeal, the Supreme Court observed that when the delinquent employee admitted
his guilt before the inquiry officer that he had handed over the alternator from the pan shop
to the police authorities and further deposed that he had handed over the stolen property and
requested the labour court to excuse him since it was his first offence. The tribunal rightly
set aside the request by taking into consideration the inquiry report and other evidence.
The Court also held that it is also not open to the tribunals and courts to substitute their
subjective opinion in place of the one arrived at by the domestic inquiry. In the instant case,
the opinion arrived at by the corporation was rightly accepted by the tribunal but not by the
court. The Court therefore, held that the order of reinstatement passed by the High Court is
contrary to the law on the basis of a catena of decisions in this Court. In such cases, there is
no place for generosity or sympathy on the part of the judicial forums for interfering with
the quantum of punishment of removal which cannot be justified.

200 AIR 1996 SC 1249.

201 2012 Lab. IC 221.
202 2007 LLR 113.
620 • Industrial Relations and Labour Laws

In Workmen v. Balmadies Estates 203, it was alleged that two employees had stolen large
quantities of chemicals from the storeroom during the specified period. The management,
after holding an inquiry, dismissed the concerned workmen from service. Thereupon, they
raised an industrial dispute which was referred to the labour court. The labour court held that
there was no direct evidence to show that they had committed theft. It accordingly directed
reinstatement. On a writ petition, the single judge held that appreciation of evidence by
the labour court was perverse and its interference with the order of termination could not
be supported in law. The writ appeal was also dismissed. Against this order, the workmen
filed special leave petition before the Supreme Court. The Supreme Court observed that it
is well settled that in view of wide powers of the labour court under Section 11A, it can, in
an appropriate case, reconsider the evidence which has been considered by the domestic
tribunal and on such reconsideration, arrive at a conclusion different from the one arrived at
by the domestic tribunal. The Court however, made it clear that the assessment of evidence
in a domestic inquiry was not required to be made by applying the same yardstick as a civil
court could do when a lis is brought before it. Further, the Evidence Act, 1872 is not applicable
to the proceedings so far as domestic inquiries are concerned, though principles of fairness
can apply. It also observed that it is established that in a domestic inquiry, guilt may not be
established beyond reasonable doubt and the proof of misconduct could be sufficient. In
a domestic inquiry, all materials which are logically probative including hearsay evidence
can be acted upon, provided it has reasonable nexus and credibility. Even confessional
and circumstantial evidence, despite lack of any direct evidence, was sufficient to hold the
delinquent guilty of misconduct and to justify the order of termination that had been passed.
The Court held that the findings of labour court that the confessional statement could not
be relied upon in the absence of any other direct evidence which was pervasive and could
be termed to be based on misconduct of law. In accordingly upheld the order of the High
Court and set aside the order of the labour court.
11. Negligence
In Subhash v. Divisional Controller, Maharashtra SRTC204, the appellant was employed as a
driver in 1980 with the respondent corporation. He was made permanent in 1985. However,
while driving the bus on the fateful day, it ramped on the railing of a bridge due to his rash
and negligent driving resulting in damage to the bus. The management, after holding an
inquiry, held that charges were proved against the appellant and accordingly, dismissed
him from service. The appellant challenged the order of dismissal before the appellate
authority. The first appellate authority set aside the order and directed that he be appointed
afresh without any monetary benefit for past service. Thereupon, he joined duty reserving
his right to challenge the order of denying him reinstatement with continuity of service
and back wages. He then filed a complaint under Section 28 read with items 5 and 9 of the
Schedule IV of the Maharashtra Recognition of Trade Union and Prevention Act, 1971 before
the industrial tribunal, Aurangabad, which was dismissed. A writ petition filed against the
order was also dismissed. Thereupon, he filed a special leave to appeal before the Supreme
Court. The Supreme Court observed that there was negligence on the part of the appellant
in driving the bus on that fateful day and as a result of which, the bus ramped on the railing
of a bridge resulting in damage to the bus. This act no doubt was a misconduct. But taking
into account the fact that during his service tenure of 21 years, he had been punished twice

203 (2oos) 1 sec ns.

204 (2009) 9 sec 344.
 Management of Disdpline and Disdplinary Procedure • 6 21

and considering his past record and the fact that no passenger was injured in the accident,
the Court set aside the order of dismissal and ordered that fresh appoinbnent be given to
the appellant but without any benefit of past service. The Court, after looking into all the
relevant aspects, thought it fit in the interest of doing complete justice that the order of the
appellate authority be modified by ordering his reinstatement with continuity of service
but without back wages. The Court felt that in the interest of justice and fair play, denial of
back wages for the entire period from the date of dismissal until his rejoining duties would
be an appropriate punishment. The appeal of the appellant was accordingly, allowed in
part to the extent stated above.

D. Powers of High Courts under Article 226

The high courts, in exercise of writ jurisdiction, can wield similar power and discretion as
is exercised by the labour court under Section llA 205 • However, they cannot interfere with
award of labour court and quantum of punishment if the labour court has exercised its
discretion judicially. Decision of the management in matter of punishment could be interfered
with by labour court if it is satisfied that the punishment imposed by the management is
highly disproportionate with the degree of guilt of the workman concerned206•

The question of discrimination is really a question of bona fides of the management's action.
The proper question is not whether the management has or has not discriminated against
any workman, but the question is whether choosing certain workers and proceeding against
them is based on rational and reasonable consideration. Fair and proper domestic inquiry
requires that the management's action in choosing certain strikers and proceeding against
them must not be based on irritational and unreasonable discrimination.
The aforesaid line of thinking was formulated by the Supreme Court in Burn and Co.
Ltd. v. Their Workmen 2 (YJ. In this case, a very large number of workmen had gone on an illegal
strike. The management selected seven workmen out of the large number of workmen
participating in such strike and proceeded against them. The management, after making an
inquiry, dismissed the aforesaid seven workmen on the ground that they had incited other
workmen. The industrial tribunal held that the domestic inquiry was not proper as it was
not proved that the concerned workmen had incited other workmen. Upholding the view
of the industrial tribunal, the Supreme Court observed.

The evidence did not specifically bring home any charge of incitement against
these persons, it cannot be said that mere participation in the strike would
justify their suspension or dismissal, particularly when no clear distinction
could be made between these persons and the very large number of workmen
who had been taken back into service although they had participated in the
strike.

205 Oriental Containers Ltd v. Engineering Workers' Association, 1996 LLR 739.
206 Essorpe Mills (P) Ltd v. Labour Court, 1999 LLR 89.
207 (1959) 1 LLJ 450 at 454.
622 • Industrial Relations and Labour Laws

From the above decision, it is evident that unequal treatment by the employer of workers in
matters of punishment is illegal when there is no sound or reasonable ground whatsoever
for making such discrimination.
The Bata Shoe Co. v. DN Ganguly2°8 strikingly demonstrates the discrimination practised
by the trade unions representing the majority workers rather than the employer. In this
case, the management had not made any discrimination and it was prepared to take back
all workmen, but the union which represented the majority of workmen was itself not
agreeable that 47 workmen concerned should be taken back. The Supreme Court in view
of the above facts held that:

There is no doubt that if the employer makes an unreasonable discrimination

in the matter of taking back employees, there may in certain circumstances be
reason for the industrial tribunal to interfere; but the circumstances of each case
have to be examined before the tribunal can interfere with the order of employer
in a properly held managerial inquiry on the ground of discrimination.
The Court accordingly refused to interfere in management's decision on the ground that
discrimination was not practised by it.
The aforesaid conduct of trade unions is termed as 'unfair labour practice' as it is
detrimental to the interest of industrial workers, it is true that management followed the
advise of the union to dismiss these workers in particular. In our view, the practice followed
by the union to pressurize the employer to dismiss certain strikers is a case of an unfair labour
practice by trade unions. In such a situation, the Court could have provided the relief as it
has already been held by the Supreme Court in Indian Iron and Steel Co' s case that it would
not hesitate in interfering in case of unfair labour practice and victimization.
In Northern Dooars Tea Co. Ltd v. Workmen 209, several workers went on an unjustified
strike. Six strikers were dismissed after holding an inquiry on the charge of causing wilful
damage to the property of the management. The industrial tribunal quashed the findings of
the domestic inquiry inter alia, on the grounds that charges of causing wilful damage to the
property of the management cannot be sustained against any one of these six strikers. Further,
it held that the management was unable to give any reasonable or rational explanation why
these six workmen were chosen out of the large mass of strikers and proceeded against. On
appeal, the Supreme Court upheld the decision. Justice Gajendragadkar (as he then was)
observed:

... no evidence whatever was led before the domestic inquiry to show wilful
damage or loss caused by the six workmen, we do not see how it is possible
to contend that the conclusion of the tribunal about the invalidity of the order
is not right.
It might be mentioned that the only charge that distinguishes the six strikers from all others
is that of wilful damage to the property of the management. Once proof of this failed, the
six workmen become indistinguishable from the rest of the strikers and to select them alone
for dismissal was obviously discriminatory.

208 AIR 1961 SC 1158 at 1163.

209 (1964) 1 LLJ 436 (SC).
 Management of Disdpline and Disdplinary Procedure • 6 2 3

In State of UP v. Raj Pal Singh 210, the respondent, an assistant warder along with
four other assistant warders beat one Shivdan Singh, and they did not listen to the senior
officers who dissuaded them. The management after holding deparbnental proceedings
dismissed the respondent though in respect of four others, passed the order of stoppage of
five increments. The respondent challenged the legality of the order before the Public Service
Tribunal. The tribunal refused to interfere. Thereupon, he approached the High Court.
The High Court held that the charges and the delinquency being same and identical, and
all the employees having been served with a set of charges out of the same incident, there
was no justifiable reason to pass different orders of punishment, and therefore the order of
dismissal cannot be sustained. The High Court accordingly set aside the order of dismissal
and directed stoppage of five increments in case of the respondent as was the order in case
of other assistant warders. The High Court further directed that the delinquent respondent
would be paid only 50 per cent of back wages. It is against this order of the High Court that
the management appealed to the Supreme Court.
The Supreme Court observed that it is open for the disciplinary authority to deal with
the delinquency and once charges are established, to award appropriate punishment. But
when the charges are same and identical in relation to one and the same incident, then to
deal with the delinquents differently in the award punishment would be discriminatory.
The Court also held that the reasoning given by the High Court cannot be faulted with
since the state is not able to indicate any difference in the delinquency of these employees.
The Supreme Court, however modified the order of the High Court regarding payment of
50 per cent back wages by holding that no back wages will be paid to him from the date of
dismissal to the date of reinstatement.

If a workman is found to be wrongfully dismissed, he may be allowed either reinstatement

or any other relief; which is appropriate in the circumstances of a particular case is a matter
of judicial discretion depending upon facts of each case.211
Under the traditional law of master and servant, courts, in case of wrongful dismissal
of workman, directed the employer to pay damage in lieu of reinstatement. This view which
is founded on the laissez faire conception of the State has by and large been abandoned in
modern times. 212 It has now been realized that adherence to the strict principle of master
and servant would expose the workers to arbitrary treabnent on the part of management.213
The Parliament gave its approval to this trend by inserting Section 11-A in IDA. This
section empowers the tribunal to scrutinize the action taken by the employer and to direct
reinstatement of workmen on such terms and conditions, if any, as it thinks fit or give
such other relief to the workman including the award of any lesser punishment in lieu of
discharge or dismissal as the circumstances of the case may require. Quite apart from this,
power is conferred on the labour court, tribunal and national tribunal to direct reinstatement
in cases of wrongful discharge or dismissal or to subject the order of reinstatement to any
terms and conditions which they may think fit on the facts and circumstances of a case.

210 2010 (4) SCALE 485.

211 See Durga Prasad, Reinstatement and Labour Law, 7 J LLL, 36 (1965).
212 See D N Vohra, Dismissal, Discharge and Punishment, Lay-off and Retrenchment, (1967) 316.
213 See Labour Bureau, Industrial Awards in India, (1959) 119.
624 • Industrial Relations and Labour Laws

The adjudicating authorities may also vary the penalty by giving any other relief inclusive
of a lesser punishment in lieu of discharge or dismissal when in their opinion, the penalty
awarded is not commensurate with the fact of misconduct alleged or proved against the
workman.
An analysis of decided cases reveals that in certain situations, the remedy by way of
reinstatement has been refused. It is, therefore, necessary to examine the circumstances in
which the relief by way of reinstatement has been granted and those in which reinstatement
is denied but a worker is allowed payment of compensation in lieu thereof.

A. When to Direct Reinstatement

It has now been settled in a catena of cases that where a workman is wrongfully
dismissed or discharged, the normal rule is that he should be reinstated. 214 Said Justice
Gajendragadkar:
The employee is entitled to security of service and should be protected against wrongful
dismissals, and so the normal rule would be reinstatement in such cases.
He added:
Nevertheless, in unusual or exceptional cases, tribunal may have to consider whether in
the interest of industry itself, it would be desirable or expedient not to direct reinstatement.
As in many other matters arising before the industrial courts for their decisions, this question
also has to be decided after balancing the relevant factors and without adopting any legalistic
or doctrinaire approach. 215
Let us examine the various factors under which the tribunal may order reinstatement
to workers whose services have been wrongfully terminated.
(a) Unfair labour practice and victimization. The Supreme Court has stated that when a
workman is dismissed on account of unfair labour practice or victimization by the
employer, reinstatement should be ordered. The reason is obvious. If the employer
takes disciplinary action against workers on some pretext other than the real reason or
in bad faith with an ulterior motive, the action cannot be the sustained. This is all the
more so in India where majority of workers are neither well organized nor unionized.
In Hind Construction and Engineering Co. Ltd216, certain workmen went on strike
which was not illegal. The management terminated the services of such strikers. The
tribunal, however, set aside the dismissal and directed reinstatement on the ground
that punishment of dismissal for this strike was due to victimization of the workmen
and was quite unjustified both in severity and in relation to strike for one day. Against
this order of the tribunal, the management preferred an appeal before the Supreme
Court. The question to be decided before the Court inter alia, was whether the tribunal
was justified in interfering with the punishment of dismissal after it had come to the
conclusion that the workmen had gone on strike even though it was not illegal. Dealing
with the question, Justice Hidayatullah speaking for the Court observed:

214 Buckingham Carnatic Mills Co. Ltd v. Their Workmen, (1951) 2 LLJ 314; Punjab National Bank v. Its
Workmen, (1959) 2 LIJ 666 (SC); ML Base and Co. Pvt. Ltd v. Its Employees, (1961) 2 LLJ 107 (SC).
215 Punjab National Bank v. Its Workmen, op.cit.
216 (1965) 1 LLJ 462.
 Management of Disdpline and Disdplinary Procedure • 625

... The tribunal can only interfere if the conduct of the employer shows lack of
bona fides or victimization of employee or employees for unfair labour practice.
He held that the order of reinstatement was proper and reasonable.
The aforesaid view was reiterated in Bata Shoe Co. (Pvt.) Ltd v. DN Ganguly217 where
the Supreme Court laid down:

It may be that participation in an illegal strike may not necessarily and in every
case be punished with dismissal; but where an inquiry has been properly held
and the employer has imposed the punishment of dismissal on the employee
who has been guilty of the misconduct of joining the illegal strike, the tribunal
should not interfere unless it finds unfair labour practice or victimization
against the employee.
Bengal Bhatdee Coal Co. v. Ram Pradesh Singh 218 is another case in point. In this case, certain
workmen physically obstructed the surface tamers working in the colliery from doing their
work during the strike. Some other workers incited other workmen in order to compel them
to join in the act of obstructing the loyal and willing workers so that they may not be able
to work. Thereupon, the management dismissed workers who were active workers and
officer-bearers of trade unions. On these facts, the tribunal held that concerned workmen
were dismissed on the ground of victimization. The Supreme Court reversed the order of
the industrial tribunal and observed:

The fact that the relations between the employer and the union were happy
and the workmen concerned were office-bearers or active workers of the
union would itself be no evidence to prove victimization, for if that were so, it
would mean that the office-bearers and active workers of a union with which
the employer is not on good terms would have carte blanche to commit any
misconduct and get away with it on the grounds that relations between the
employer and the union were not happy.
The Court accordingly held that the finding of victimization in this case was based merely
on conjectures and surmises.
(b) Arbitrary conduct and effective procedure. Wherever management dismisses strikers, it is
essential to hold a proper domestic inquiry in order to establish the charges levelled
against them. The tribunals accordingly have emphasized the need to enforce the
observance of standing orders and rules of natural justice while considering the relief
to be granted to the dismissed strikers. In Punjab National Bankv. Their Workmen, Justice
Gajendragadkar observed.

It is well-established that even where an employer is justified in terminating

the services of his employees, he is bound to give them a charge-sheet.
He added:

The requirement is universally treated as consistent with natrual justice and

fair play and since the bank has not complied with it, the impungend orders

217 AIR 1961 SC 1158 at 1164.

218 1963 1 LLJ 234 (SC).
626 • Industrial Relations and Labour Laws

of dismissal are wholly invalid for this additional reason; and the result again
would be that the said orders are inoperative and void and the employees are
entitled to reinstatement as a matter of course.
(c) Harshness of the order. Wherever dismissal of order of workers has been considered
to be too severe and out of proportion in relation to the fault, the tribunal and courts
have the power to award lesser punishment. However, prior to 1971, the tribunal had
no power to interfere with the punishment except in extraordinary situations, namely,
when there was want of good faith, victimization, unfair labour practice, etc., on the
part of the employer. This position had been completely changed in 1971 when Section
11 A was inserted in the IDA. For the first time, power has been conferred upon a
tribunal to interfere with the punishment imposed by an employer. This Section applies
at the time when the tribunal considers the punishment to be imposed too harsh. This
power is, however, subject to certain restrictions.
(d) Whether mere participation in an illegal strike bars claim of reinstatement. The Supreme
Court in Burn, and Co. v. Their Workmen 219 answered the question in negative. Speaking
for the Court, Justice Imam observed:

It cannot be said that mere participation in the strike would justify their
suspension or dismissal. ..
The aforesaid view was re-affirmed in later decisions. 220
(e) Reinstatement cannot be refused because a long time has elapsed. There is nothing in the
IDA showing that the claim for reinstatement, if otherwise justified, can be defeated
simply on the ground of delay. The IDA does not prescribe any time for making
the reference of granting of the relief. The question of delay may weigh with the
government before making the reference, but once a reference is made, the tribunal
may order reinstatement or compensation or both.221 This question whether delay
defeats reinstatement came up for consideration before the Supreme Court in Swadeshi
Industries Ltd v. Workmen 222 • We have already referred to the facts of this case wherein
strikers were wrongfully dismissed. In this case, it was argued on behalf of management
that while the order terminating the services of strikers was made on 24 May 1951, the
order of reinstatement was made in April 1955. Observed Justice Das Gupta:

When however, as in this case, the order of termination is itself bad,

reinstatement cannot ordinarily be refused because long time has elapsed.
Agreeing with the conclusion it may be added that in this case, reinstatement order was
made by the tribunal against the dismissal of strikers 4 years after the reference and 9 years
after the dismissal order. While we agree that the delay cannot defeat reinstatement but
we would like to assert that in cases where tribunal awards back wages to strikers besides
reinstatement, it may well take into account the delay and its impact on the industry.

219 Burn and Co. v. Their Workmen, (1959) 1 LLJ 450,454 (SC}.
220 See Punjab National Bank v. Their Workmen, (1959) 2 LLJ 666 (SC}; Indian General Navigation and Rly.
Co Ltd. v. Their Workmen, (1960} 1 LLJ 13 (SC}; IMH Press v. Addl. LT, (1960} 1 LLJ 499 (SC}.
221 See Tika Ram and Sons Ltd. Oil Mill v. Its Workmen,. (1956) 1 LLJ 327.
222 Swadeshi Industries Ltd. v. Workmen, (1960} 2 LLJ 78 (SC}.
 Management of Disdpline and Disdplinary Procedure • 6 2 7

On the contrary, in Shalimar Works Ltd v. Its Workmen 223, reinstatement was refused, inter
alia, for the delay in making the reference to avoid dislocation of the industry. Approving
the findings of the labour appellate tribunal, Justice Wanchoo rationalized:

The tribunal would be justified in refusing the relief of reinstatement to avoid

dislocation of the industry and that is the correct order to make ... the defect
in the order of discharge due to permission not having been obtained under
Section 33 can, under the circumstances of this case, be ignored on the ground
that the workmen who did not rejoin in July, 1948 were not interested in
reinstatement: firstly on account of the circumstances in which that order came
to be made after an illegal and unjustified sit down strike; secondly, because the
workmen in their turn did not avail themselves of the remedy under Section
33-A which was open to them, and thirdly, because the reference was made
after an unreasonable length of time and in a vague manner.
(f) Whether mere civil trespass bars the claim to reinstatement of strikers. This question came
up for consideration before the Supreme Court for the first time in Punjab National
Bank Ltd v. Their Workmen. 224 Confirming the findings of the labour appellate tribunal
Justice Gajendragadkar observed:

... the (labour) appellate tribunal was obviously right in holding that even if
civil trespass was involved in the conduct of (strikers), that by itself cannot
justify the rejection of their claim for reinstatement.
He added that even in America, the simple act of trespassing upon the employer's property
was no bar to reinstatement.
(g) Loss of confidence: Once the employer has lost confidence in the employee and the bona
fide loss of confidence is affirmed, the order of punishment must be considered to be
immune from challenge for the reason that discharging the office of trust and confidence
requires absolute integrity and in a case of loss of confidence, reinstatement cannot be
directed. 225
In Kanhaiyalal Agrawal v. Gwalior Sugar Co. Ltd226, the Supreme Court laid down the test
for loss of confidence to find out as to whether there was bona fide loss of confidence in the
employee, observing that,
(i) the workman is holding a position of trust and confidence;
(ii) by abusing such position, he commits an act which results in forfeiting the same; and
(iii) to continue him in service/ establishment would be embarrassing and inconvenient to
the employer or would be detrimental to the discipline or security of the establishment.

223 (1959) 2 LLJ 26 (SC).

224 Punjab National Bank v. Its Workmen, AIR 1960 SC 160.
225 Air India Corporation v. VA Rebellow, (1972) 1 SCC 814; AIR 1972 SC 1343;Francis Klein & Co. (P) Ltd

v. Workmen, (1972) 4 sec 569; AIR 1971 SC 2414 and BHEL v. M Chandrasekhar Reddy, (2005) 2 sec
481; 2005 sec (L&S) 282; AIR 2005 SC 2769.
226 (2001) 9 sec 609; 2002 sec (L&s) 257; AIR 2001 sc 3645.
628 • Industrial Relations and Labour Laws

Loss of confidence cannot be subjective, based upon the mind of the management. Objective
facts which would lead to a definite inference of apprehension in the mind of the management
regarding trustworthiness or reliability of the employee must be alleged and proved227•
In SBI v. Bela Bagchi228, this Court repelled the contention that even if by the misconduct
of the employee, the employer does not suffer any financial loss, he can be removed from
service in a case of loss of confidence. While deciding the said case, reliance has been placed
upon its earlier judgement in Disciplinary Authority-cum-Regional Manager v. Nikunja Bihari
Patnaik:22 9•
An employer is not bound to keep an employee in service with whom relations have
reached the point of complete loss of confidence/faith between the two230•
In Indian Airlines v. Prabha D Kanan 231 , while dealing with a similar issue, the Supreme
Court held that:

Loss of confidence cannot be subjective but there must be objective facts which
would lead to a definite inference of apprehension in the mind of the employer
regarding trustworthiness of the employee and which must be alleged and
proved.
In case of theft, the quantum of theft is not important. What is important is the loss of
confidence of employer in employee232 •
In Divisional Controller, Karnataka State Road Transport Corporation v. MG Vittal Rao233,
the Supreme Court said that in a case of misconduct of grave nature like corruption or theft,
no punishment other than dismissal may be appropriate.
(h) Participating in strike and refusal to join duty. Courts are divided on the issue whether
reinstatement can be refused on the ground of persistent and obdurate refusal by
workmen to join duty notwithstanding the fact that the management provides them
opportunities to come back to work. While in Oriental Textile Finishing Mills v. Labour
Courts 234 it was answered in the affirmative, in Gujarat Steel Tubes case it was answered
in the negative.
(i) Participation in violent demonstration during strike. Courts have denied reinstatement
to workers whose attitude was violent and who took a leading part in violent
demonstrations during strike.

227 Sudhir Vishnu Panvalkar v. Bank of India, (1997} 6 SCC 271; 1997 SCC (L&S) 1662; AIR 1997 SC 2249.
228 (2005) 7 sec 435; 2005 sec (L&S) 940; AIR 2005 sc 3272.
229 (1996) 9 sec 69; 1996 sec (L&S) 1194.
230 Binny Ltd v. Workmen, (1972) 3 SCC 806; AIR 1972 SC 1975; Binny Ltd v. Workmen, (1974) 3 SCC 152;

1973 SCC (L&S) 444; AIR 1973 SC 1403; Anil Kumar Chakraborty v. Saraswatipur Tea Co. Ltd, (1982)
2 SCC 328; 1982 SCC (L&S) 249; AIR 1982 SC 1062; Chandu Lal v. Pan American World Ainvays Inc.;
(1985) 2 SCC 727; 1985 SCC (L&S) 535; AIR 1985 SC 1128; Kamal Kishore Lakshman v. Pan American
World Airways Inc., (1987} 1 sec 146; 1987 sec (L&S) 25; AIR 1987 SC 229 and Pearlite Liners (P)
Ltd v. Manorama Sirsi, (2004) 3 sec 172; 2004 sec (L&S) 453; AIR 2004 SC 1378.
231 (2006) 11 sec 67; (2007) 1 sec (L&S) 359; AIR 2007 sc 548.
232 AP SRTC v. Raghuda Siva Sankar Prasad, (2007} 1 SCC 222; (2007} 1 SCC (L&S) 151; AIR 2007 SC 152.
233 (2012) 1 sec 442.
234 Oriental Textile Finishing Mills v. Labour Court, (1971) 2 LLJ 505 (SC).
 Management of Disdpline and Disdplinary Procedure • 6 2 9

(j) Loss ofLien. Lossoflienona permanent post on which the reinstatement may be refused235
are: (i) employee convicted by criminal court for indecent assault on a girl of 11 years
and sentenced to imprisonment.236 (ii) strained feeling 237 (iii) abolition of post.238

B. Relief of back wages

If a workman is found to be wrongfully dismissed, he may be allowed either reinstatement
or any other relief; which is appropriate in the circumstances of a particular case is a matter
of judicial discretion depending upon facts of each case. However, difficulty arises in regard
to awarding relief of back wages where the tribunal orders reinstatement. This has been
best depicted by a three-judge bench of the Supreme Court in Hindustan Tin Works (P) Ltd
v. Employees 239 which is as follows:

In the very nature of things there cannot be a straight-jacket formula for

awarding relief of back wages. All relevant considerations will enter the verdict.
More or less, if would be a motion addressed to the direction of the tribunal.
Full back wages would be the normal rule and the party objecting to it must
establish the circumstances necessitating departure. At that stage, the tribunal
will exercise its discretion keeping in view all the relevant circumstances. But
the discretion must be exercised in a judicial and judicious manner. The reason
for exercising discretion must be cogent and convincing and must appear on
the face of the record. When it is said that something is to be done with the
discretion of the authority, that something is to be done according to the rules
of reason and justice, according to law and not humour. It is not to be arbitrary,
vague and fanciful but legal and regular. 240
A two-judge bench of the Supreme Court in Hindustan Motors Ltd v. Tapan Kumar
Bhattacharya241 was invited to determine as to when back wages should be awarded and
to what extent. In this case, the respondent was employed as a mazdoor in the production
control deparbnent (care press shop) of Hindustan Motors Ltd. On 13 February 1980 at
about 10.40 p.m. while he was on duty in the care press shop, he had assaulted the general
supervisor of the deparbnent, as a result of which he became unconscious and had to be
hospitalized. The management terminated his services w.e.f. 15 February 1980, after a
deparbnental inquiry, for the said misconduct. The industrial tribunal held that the charges
were not proved by any cogent and reliable evidence. It, therefore, held that the respondent
was entitled to reinstatement with full back wages. The single judge of the High Court set
aside this award. In appeal, the division bench of the Calcutta High Court set aside the
judgement of the single judge and directed reinstatement of the workman with back wages.
It further directed that seniority and continuity in service should be maintained and any
interim amount paid by the management to the workman should be deducted from the

235 Sandhu Resettlement Corporation Ltd v. Industrial Tribunal, AIR 1960 SC 529.
236 Punjab National Bank Ltd v. PNB Employees' Federation, AIR 1960 SC 160.
237 See Vishwamitra Press, 1954 2 LLJ 53 (Adi); Elgin Mills Co. Ltd v. Suti Mill Mazdoor Union, 1958 1 LLJ

100 (LAT}; Mangalambika Metal Industries v. Its Workmen, 1958 1 LLJ 419 (SC}.
238 Varadraja Motor Services v. Its Workmen, (1953) 1 LLJ 226.
239 (1979) 2 sec 80.
240 Id. at 86.
241 (2002) 6 sec 41.
630 • Industrial Relations and Labour Laws

amount of back wages. Against this order, an appeal was filed before the Supreme Court.
The question before the apex court was limited to the propriety of award of full back wages.
The Court laid down the following principles:
(i) The order for payment of full back wages to the workman was passed by the industrial
tribunal which has been confirmed by the division bench of the High Court without
any discussion and without stating any reason. If indeed the tribunal and the division
bench had proceeded on the footing that since the order of dismissal passed by the
management was set aside, the order of reinstatement with full back wages was to
follow as a matter of course.
(ii) There was no application of mind to the question of back wages by the labour court.
There was no pleading or evidence whatsoever on the aspect whether the respondent
was employed elsewhere during this long interregnum. Instead of remitting the matter
to the labour court or the High Court for fresh consideration at this distance of time,
we feel that the issue relating to payment of back wages should be settled finally.
(iii) [I]n the context of the facts of this particular case including the vicissitudes of long-
drawn litigation, it will serve the ends of justice if the respondent is paid 50 per cent
of the back wages till the date of reinstatement. The amount already paid as wages
or subsistence allowance during the pendency of the various proceedings shall be
deducted from the back wages now directed to be paid.
(iv) The appellant will calculate the amount of back wages as directed herein and pay the
same to the respondent within 3 months, failing which the amount could carry interest
@ 9 per cent per annum.

In Haryana Urban Development Authority v. Devi Dayal242, the management terminated the
services of a helper. It was alleged by the management that the said helper did not work
continuously during the period and he frequently absented himself from duties for which show
cause notice was issued. However, he was not given either retrenchment compensation or
one month's notice or pay in lieu thereof. The helper had served the management for 340 days
during the preceding year. The tribunal held that the termination was illegal. It accordingly
directed reinstatement with full back wages. The High Court of Punjab and Haryana upheld
the award. On appeal, the Supreme Court held that having regard to the facts of the case,
the award of full back wages covering a period of nearly 5 years is not warranted. Firstly, the
respondent was in service for a short period with frequent spells of absence. Second, there
is a reasonable possibility of the respondent being gainfully employed somewhere else. The
respondent, in all probability would have been working somewhere and earning daily wages,
if notregularly, at least for some days in a month. It, accordingly, held thatthe award of back
wages to the extent of 50 per cent would be proper and justified, on the peculiar facts of this case.
The Supreme Court in Ram Ashrey Singh v. Ram Bux Singh 243 case has held that the
payment of back wages is not automatic entitlement to the workman since it is discretionary
and has to be dealt with in accordance with facts and circumstances of each case.
Again, inMP State Electricity Board v. farina Bez.244, the Supreme Court held that when
termination of a workman is set aside, the award of back wages is not a natural consequence.

242 2002 Lab. IC 1090.

243 Ram Ashrey Singh v. Ram Bux Singh, (2003) 2 LLJ 176.
244 (2003) 3 LLJ 244; 2003 LLR 848.
 Management of Disdpline and Disdplinary Procedure • 6 31

In SM Nilakjar v. Telecom Distt. Manager2 45, the Supreme Court did not allow back
wages, in view of the delay in raising the dispute and initiating proceedings.
In Hissar Central Cooperative Bank v. Kalu Ram246, the management terminated the
services of an employee who was secretary to the Hissar Cooperative Bank Society for
allegedly causing embezzlement of money of the society after holding inquiry. The labour
court held that there was no proper inquiry and no proof to the effect that the respondent
had caused embezzlement. But there is interpolation at the instance of the workman.
The labour court accordingly ordered reinstatement with full back wages. Aggrieved by
this order, the employer field a writ petition in the High Court of Punjab and Haryana.
However, the division bench issued notice only on the question of payment of back wages
to the workmen. Thereupon, the employer filed an appeal before the Supreme Court. A
question arose whether the workman is entitled to full back wages. The Court answered
the question in negative and observed that while ordering back wages, consideration of
gainful employment is not the sole criterion. The Court may consider various factors while
considering the question of payment of full back wages namely: the nature of the charge;
the extent of his involvement; and whether his conduct has caused loss to the employer,
etc. Quite apart from this, long delay may also be a ground for denial of full back wages.
The Court also took a serious note of misappropriation of public money, howsoever slight
evidence was adduced to this effect. In view of this, the Supreme Court directed back wages
only to the extent of 25 per cent.
UP State Brassware Corpn Ltd v. Uday Narain Pandey247 brought a change in the approach
of the Supreme Court. This is evident from the following observations of the Supreme Court.
Although direction to pay full back wages on a declaration that the order of termination
was invalid used to be the usual result but now, with the passage of time, a pragmatic view
of the matter is being taken by the Court realizing that an industry may not be compelled
to pay to the workman for the period during which he apparently contributed little or
nothing at all to it and/ or for a period that was spent unproductively as a result whereof
the employer would be compelled to go back to a situation which prevailed many years
ago, namely, when the workman was retrenched.
The Court added :

No precise formula can be laid down as to under what circumstances, payment

of entire back wages should be allowed. Indisputably, it depends upon the facts
and circwnstances of each case. It would however, not be correct to contend that
it is automatic. It should not be granted mechanically only because on technical
ground or otherwise an order of termination is found to be in contravention
of the provisions of Section 6-N of the UP Industrial Disputes Act.
The Court further observed :

The changes brought about by the subsequent decisions of this Court, probably
having regard to the changes in the policy decisions of the government in
the wake of prevailing market economy, globalization, privatization and
outsourcing, is evident.

245 (2003) 4 sec 27.

246 (2003) 9 sec 221.
247 (2006) 1 sec 479.
632 • Industrial Relations and Labour Laws

From the above observations, it becomes apparent that payment of full back wages upon
an order of termination being declared illegal cannot be granted mechanically. It does not
automatically follow that reinstatement must be accompanied by payment of full back
wages even for the period when the workman remained out of service and contributed
little or nothing to the industry.
Again, in the case of Haryana State Electricity Development Corporation Ltd v. Mamni248
the Supreme Court reiterated the above principle.
Recently, this Court again examined the issues with regard to payment of full back
wages in the case of PVK Distillery Ltd v. Mahendra Ram 249 and held as follows:

Although direction to pay full back wages on a declaration that the order of
termination was invalid used to be the usual result but now, with the passage
of time, a pragmatic view of the matter is being taken by the Court realizing
that an industry may not be compelled to pay to the workman for the period
during which he apparently contributed little or nothing at all to it and/or
for a period that was spent unproductively as a result whereof the employer
would be compelled to go back to a situation which prevailed many years ago,
namely when the workman was retrenched.
Applying the aforesaid ratio of law, the Supreme Court in M/s Reetu Marbles v. Prabhakant
Shukla250 held:

Where the labour court exercising its discretionary jurisdiction concluded that
it was not a fit case for the grant of back wages, the High Court was unjustified
in awarding full back wages. The labour court having found the termination to
be illegal was unjustified in not granting any back wages at all. Keeping in view
the facts and circumstances of this case, the Court directed that the respondent
shall be paid 50 per cent of the back wages from the date of termination of
service till reinstatement.

C. Compensation to Wrongfully Dismissed Workmen

Before the introduction of Section 11-A, in Hindustan Steel v. A K Roy251 , while dealing
with the powers of industrial tribunal either to order reinstatement or compensation in
lieu or reinstatement in a case where it finds that the order of discharge or dismissal of
a workman was not justified or legal, expressed the view that the tribunal has discretion
to award compensation instead of reinstatement if exceptional situation arises so as to
make reinstatemet inexpendient or improper. The tribunal should, however, exercise such
discretion judicially and in accordance with well recognized principle in that regard and
examine carefully the circumstances of each case and decide whether the case is one of the
exceptions to the general rule. In Management of ITC Ltd v. Labour Court252, the labour court
found that the order of discharge was mala fide and unreasonable because workman was
guilty of the charge of fault only and not of misconduct.

248 (2006) 9 sec 434.

249 (2009) 5 sec 705.
250 (2010) 2 sec 70.
251 (1970) 1 LLJ 228.
252 (1978), 2 LLJ 354.
 Management of Disdpline and Disdplinary Procedure • 6 3 3

The labour court, therefore, ordered reinstatement of the workman. This order was
affirmed by the High Court. On appeal, the Supreme Court expressed the view that every
case has to be judged on its special facts. It found that in this case, the service card of the
employee showed that he had committed several faults in the past and was sometimes
warned, sometimes suspended and sometimes reprimanded for all those omissions and
commissions and ultimately observed:

We think on the facts and the circumstances of this case that it is not a fit case
where the High Court ought to have sustained the order of reinstatement as
passed by the labour court. We, accordingly, direct that in lieu of reinstatement,
respondent No. 3 will be entitled to get a compensation of f30,000 which will,
roughly speaking, include almost all sums of money payable to the workman
such as basic pay, dearness allowance, etc., for a period of about 5 years.
From the aforesaid decision, it is evident that though ordinarily reinstatement is to
follow when the tribunal sets aside the order of penalty or discharge of dismissal made by the
management, but where it is alleged by the management that reinstatement is not expedient
or proper in certain circumstances, the labour court has to examine the circumstances of each
case to see whether or not reinstatement of the discharged or dismissed employee is expedient
or proper and refuse to order reinstatement where such a course in the circumstances of the
case is not either desirable or expedient.

D. Current Judicial Approach

In recent years, there has been a notable shift in the approach of the Supreme Court in
granting relief in cases of wrongful dismissals. In a number of cases, the Supreme Court
has held that an award of compensation in lieu of reinstatement and back wages would be
proper and would not be said to be unjustified.
In Ashok Kumar Sharma v. Oberoi Flight Services 253, the Supreme Court approved the
practice of awarding compensation in lieu of reinstatement even is case of wrongful dismissal
but observed that it should not be grossly inadequate. The Court ruled that while fixing
compensation, all relevant facts and circumstances including the nature of employment
and status of employee, whether confirmed employee or not, should be taken into account.
The legal position has been stated in Chairman-cum-MD, Coal India v. Anant Saha 254
which is as follows:

Even after punishment imposed upon the employee is quashed by the court or
tribunal, the payment of back wages still remains discretionary. Power to grant
back wages is to be exercised by the court/tribunal keeping in view the facts
in their entirety as no straightjacket formula can be evolved, nor a universal
application can be laid for such cases. Even if the delinquent is reinstated, it
would not automatically make him entitled for back wages as entitlement
to get back wages is independent of reinstatement. The factual scenario and
principles of justice, equity and good conscience have to be kept in view by the

253 (2010) 1 sec 142.

254 2011 Lab. IC 2092 (SC).
634 • Industrial Relations and Labour Laws

appropriate authority/ court or tribunal. In such matters, the approach of the

court or the tribunal should not be rigid or mechanical but flexible and realistic.

E. Recommendations of the (Second) National Commission on Labour

The (Second) National Commission on Labour has recommendent that when a worker
has been dismissed or removed from service after a proper and fair inquiry on charges of
violence, sabotage, theft and/or assault, and if the labour court comes to the conclusion
that the grave charges have been proved, then the court will not have the power to order
reinstatement of the delinquent worker.
Management's
Prerogative During
the Pendency of
Proceedings and
Notice of Change 22
SECTION-I

Prior to 1947, there was no provision corresponding to Section 33 in any legislative enachnent.
This section, as it was first enacted in the Industrial Disputes Act 1947, read:

No employer shall, during the pendency of any conciliation proceedings or

proceedings before a tribunal, in respect of any industrial dispute, alter, to the
prejudices of the workmen concerned, such conditions of service applicable to
them immediately before the commencement of such proceedings, nor, save
with the express permission in writing of the conciliation officer, board or
tribunal as the case may be, shall during the pendency of such proceedings,
discharge, dismiss or otherwise punish such workmen, except for misconduct
not connected with the dispute.
The restriction on alteration of conditions of service being absolute, these provisions
adversely affected even legitimate management's action. Moreover, they hardly served
their intended purpose, viz., protection of labour against victimization and prevention of
further exacerbation of already strained relations between parties. There was a marked
tendency on the part of employers to take resort to the extreme punishment of dismissal
wherever the misconduct was not connected with the pending dispute. To overcome the
shortcomings, the 1950-Amendment Act made several changes in the original section. The
amended section ran:
During the pendency of any conciliation proceedings or proceedings before a tribunal
in respect of any industrial dispute, no employer shall:
(a) alter, to the prejudice of the workmen concerned in such dispute, the conditions of service
applicable to them immediately before the commencement of such proceedings; or
(b) discharge or punish, whether by dismissal or otherwise, any workman concerned in
such dispute save with the express permission in writing of the conciliation officer,
board or tribunal, as the case may be.
636 • Industrial Relations and Labour Laws

However, the widening of the ambit of Section 33 had the natural effect of increasing the
number of applications made to obtain the necessary permission and consequent delay in their
disposal by the concerned authorities. Thus, notwithstanding the qualified nature of the ban
introduced by the 1950-Amendment, Section 33 severaly curtailed management's prerogative,
and thereby prevented employers from taking timely action and led to stultification of
business. The 1956-Amendment seeks to provide greater freedom to management and,
at the same time protect to a great extent, concerned workmen and union leaders against
victimization and high-handed action of the employer. The present section runs:
(1) During the pendency of any conciliation proceedings before a conciliation officer or a
board or of any proceeding before an arbitrator or a labour court or tribunal or national
tribunal in respect of an industrial dispute, no employer shall-
(a) in regard to any matter connected with the dispute, alter, to the prejudice of the
workmen concerned in such dispute, the conditions of service applicable to them
immediately before the commencement of such proceeding, or
(b) for any misconduct connected with the dispute, discharge or punish, whether by
dismissal or otherwise, any workmen concerned in such dispute, save with the
express permission in writing of the authority before which the proceeding is pending.
(2) During the pendency of any such proceeding in respect of an industrial dispute, the
employer may, in accordance with standing orders applicable to a workman concerned
in such dispute, or, where there are no such standing orders, in accordance with the
terms of the contract, whether express or implied, between him and the workman-
(a) alter, in regard to any matter not connected with the dispute, the conditions of
service applicable to that workman immediately before the commencement of such
proceeding; or,
(b) for any misconduct not connected with the dispute, discharge or punish that
workman, whether by dismissal or otherwise:
Provided that no such workman shall be discharged or dismissed, unless he has been
paid wages for one month and an application has been made by the employer to the authority
before which the proceeding is pending for approval of the action taken by the employer.
(3) Notwithstanding anything contained in sub-section (2), no employer shall, during the
pendency of any such proceeding in respect of an industrial dispute, take any action
against any protected workman concerned in such dispute-
(a) by altering to the prejudice of such protected workman, the conditions of service
applicable to him immediately before the commencement of such proceedings; or
(b) by discharging or punishing, whether by dismissal or otherwise, such protected
workman, save with the express permission in writing of the authority before
which the proceeding is pending.
Explanation-For the purposes of this sub-section, a 'protected workman' in relation
to an establishment, means a workman who, being a member of the executive or other
office bearer of a registered union connected with the establishment, is recognized as such
in accordance with rules made in this behalf.
(4) In every establishment, the number of workmen to be recognized as protected
workmen for the purposes of sub-section (3) shall be one per cent of the total number
of workmen employed therein subject to a minimum number of five protected
workmen and a maximum number of 100 protected workmen and for the aforesaid
Management's Prerogative During the Pendency of Proceedings and Notice of Change • 6 3 7

purpose, the appropriate government may make rules providing for the distribution
of such protected workmen among various trade unions, if any, connected with the
establishment and the manner in which the workmen may be chosen and recognized
as protected workmen.
(5) Where an employer makes an application to a conciliation officer, board, an arbitrator,
a labour court, tribunal or national tribunal under the proviso to sub-section (2) for
approval of the action taken by him, the authority concerned shall, without delay,
hear such application and pass, within a period of 3 months from the date of receipt
of such application, such order in relation thereto as it deems fit.
Provided that where any such authority considers it necessary or expedient so to do,
it may, for reasons to be recorded in writing, extend such period by such further period as
it may think fit.
Provided further that no proceedings before any such authority shall lapse merely on
the ground that any period specified in this sub-section has expired without such proceedings
being completed.

The object of Section 33 is to (i) protect the workman against victimization by the employer
and (ii) ensure expeditious termination of proceedings of industrial disputes in a peaceful
abnosphere, undisturbed by any subsequent cause leading to further exacerbation of already
strained relations between the employer and the workman1 •

A. Pendency of Proceedings
One of the fundamental conditions of Section 33 of the Industrial Disputes Act, 1947 is that
the proceeding must be pending before one of the authorities specified in the section, namely,
before the conciliation officer, board of conciliation or voluntary arbitrator under Section
lOA or labour court, industrial tribunal or national tribunal. It does not, however, include
pendency of proceedings before the high courts2 • The pendency of relevant proceedings is
thus the condition precedent for the application of Section 33 3•

B. Workmen Concerned in the Disputes

The question about construction of the words 'workman concerned in such dispute'
which occur in Sections 33(1) and 33(2) has been the subject matter of judicial decisions
and somewhat inconsistent views have been taken by different high courts on this point.
While some high courts have narrow interpretations4 to the aforesaid expression, several

1 See Punjab National Bank v. ALPNB Employee's Federation, AIR 1960 SC 1; Automobiles Products of
India v. Rukmaji Bala, AIR 1955 SC 258; Punjab Beverages (P) Ltd v. Suresh Chand, (1978) 2 SCC 144,
151.
2 Rajasthan State Road Transport Corporation v. Abdul Hussain, 2010 LLR 490.
3 Tata Iron & Steel Co. Ltd v. Modak (SN), (1965) 2 LLJ 128 (SC).
4 New Jehangir Vakil Mills Ltd, Bhavnagar v. NL Vyas, (1958) 2 LLJ 573.
6 3 8 • Industrial Relations and Labour Laws

others adopted liberal interpretations5• The controversy has been set at rest by the Supreme
Court in New India Motors Pvt Ltd v. Morris (K T) 6 and Digwadih Colliery v. Ramji Singh 7• In
the former case, the Supreme Court observed that even as a matter of construction, there
was no justification for assuming that the workman concerned in such dispute should be
workman directly or immediately concerned in the said dispute. In the Court's view, there
was no justification for adding the further qualification of direct or immediate concern
which necessarily narrows the construction. In dealing with the question as to which
workman can be said to be concerned in an industrial dispute, the Court pointed out that
the essential condition for raising of an industrial dispute itself, and if an industrial dispute
can be raised only by a group of workmen acting on their own or through their union, then
it would be difficult to resist the conclusion that all those who sponsored the dispute are
concerned with it. It further added that this construction is harmonious with the definition
prescribed by Section 2-A and with the provisions contained in Section 18 of the Act. It held
that 'workmen concerned in such dispute cannot be limited only to the workman who are
directly concerned with the dispute' but includes all workmen on whose behalf the dispute
has been raised as well as those who would be bound by the award. In the latter case, the
Supreme Court said: 'It is necessary to enquire what was the subject matter of the industrial
dispute concerned'. It pointed out that the petitioner filing an application under Section
33-A should have satisfied the tribunal by providing the nature of the dispute during the
pendency of the act which gave rise to the application under Section 33-A before asking
the tribunal to make a finding in his favour under Section 33(2) and in the absence of such
evidence, the tribunal was not justified in holding that Section 33(2) had been contravened.
The aforesaid view was reaffirmed by the Supreme Court in Tata Iron and Steel Co. v.
Singh (D R). 8

C. Action must be bona tide

Another requirement for permission or approval under Section 33 is that the action of the
management must be bona fide. It has been settled in a catena of cases that if the discharge
or dismissal of a workman is a colourable exercise of the power to discharge or dismiss a
workman in accordance with the standing orders or is a result of victimization or unfair labour
practice, the industrial tribunal will intervene by refusing to grant' permission' or 'approval'. 9

This question came up for consideration in Atherton West & Co. Ltd v. Jute Mill Mazdoor
Union 10 and Lakshmi Devi Sugar Mills v. Pt. Ram Sarup.11 In the former case, the Supreme

5 Eastern Plywood Manufacturing Co. Ltd v. Eastern Plywood Manufacturing Workers' Union, (1953) 1
LLJ 628; Newton Studies Ltd v. Ethirajulu, (1950) 1 LLJ 628; Andhra Scientific Co. Ltd v. Seshgiri Rao,
(1959) 2 LLJ 551.
6 New India Motors Pvt Ltd v. Morris (KT), (1960) 1 LLJ 551.
7 Digwadih Colliery v. Ramji Singh, (1964) 2 LLJ 143.
8 Tata Iron and Steel Co. v. Singh, (1965) 2 LIJ 122 (SC).
9 See, Chartered Bank, Bombay v. Chartered Bank Employees Union, (1960) 3 SCR 441; This principle was
adopted by the Supreme Court in Gujarat Steel Tubes Ltd v. GS T Mazdoor Sabha, (1980) 1 LLJ 137 (SC).
10 Atherton West & Co. Ltd v. Suti Mill Mazdoor Union, AIR 1953 SC 241.
11 Lakshmi Devi Sugar Mills v. Pt. Ram Sarup, AIR 1957 SC 82.
Management's Prerogative During the Pendency of Proceedings and Notice of Change • 639

Court ruled that in discharging its limited jurisdiction, the tribunal had only to institute an
inquiry and come to the conclusion as to 'whether there was a prima facie case made out for
the discharge or dismissal of the workman and the employer, his agent or manager was
not actuated by any improper motives or did not resort to any unfair labour practice or
victimization in the matter of the proposed discharge or dismissal of the workman.' In the
latter case, Justice Bhagwati observed:

A prima facie case, at least in the disciplinary situation would be made out if, on
the materials before it, the tribunal comes to the conclusion that a fair inquiry
was held by the management in the circumstances of the case and it had bona
fide come to the conclusion that the workman was guilty of misconduct with
which he had been charged ...
The combined effect of the aforesaid decision has been summarized in Punjab National
Bank Ltd v. Its Workmen. 12
Where an application is made by the employer for the requisite permission under
Section 33, the jurisdiction of the tribunal in dealing with such an application is limited.
It has to consider whether a prima facie case has been made out by the employer for the
dismissal of the employee in question. If the employer has held a proper inquiry into the
alleged misconduct of the employee, and if it does not appear that the proposed dismissal
of the employee amounts to victimization, or an unfair labour practice, the tribunal has to
limit its inquiry only to the question as to whether a prima facie case has been made out or
not. In these proceedings, it is not open to tribunal to consider whether the order proposed
to be passed by the employer is proper or adequate or whether it errs on the side of excessive
severity; nor can the tribunal grant permission, subject to certain conditions, which it may
deem to be fair. It has merely to consider the prima facie aspect of the matter and either grant
the permission or refuse it accordingly by holding that a prima facie case is or is not made
out by the employer.13
Again, in Punjab Beverages (P) Ltd v. Suresh Chander,14 Justice Bhagwati explained the
scope of inquiry under Section 33:

... the only scope of inquiry before the tribunal exercising jurisdiction under
Section 33 is to decide whether the ban imposed on the employer by this
section should be lifted or maintained by granting or refusing the permission
or approval asked for by the employer. If the permission or approval is
refused by the tribunal, the employer would be precluded from discharging
or punishing the workman by way of dismissal and the action of discharge
or dismissal already taken would be void. But the reverse is not true for even
if the permission or approval is granted, that would not validate the action
of discharge or punishment by way of dismissal taken by the employer. The
permission or approval would merely remove the ban so as to enable the

12 Punjab National Bank Ltd v. Its Workmen, AIR (1960} SC 160.

13 Punjab National Bank Ltd v. Its Workmen, op. cit., p 170. See also Cominco Binani Zinc Ltd v. KN Mohnan,
(1993} Lab. IC 1298. Here, the Kerala High Court held that the inquiry contemplated by the authority
under Section 33 (2) (b) is of a very limited nature. It can disregard the findings entered by the
inquiry officer only if they are perverse.
14 Punjab Beverages (P) Ltd v. Suresh Chander, (1978) 2 SCC 144.
640 • Industrial Relations and Labour Laws

employer to make an order of discharge or dismissal and thus avoid incurring

the penalty under Section 31 (1), but the validity of the order of discharge or
dismissal would still be liable to be tested in a reference at the instance of the
workmen under Section 10.
Concept of primafacie case: In Martin Burn Ltd v. Banerjee (R N),15 Justice Bhagwati
delineated the concept of prima facie case:

A prima facie case does not mean a case proved to the hilt but a case which can
be said to be established if the evidence which is led in support of the same
was believed. While determining whether a prima facie case has been made, the
relevant consideration is whether on the evidence led, it was possible to arrive at
the conclusion in question and not whether that was the only conclusion which
could be arrived at on that evidence. It may be that the tribunal considering this
question may itself have arrived at a different conclusion. It has, however, not
to substitute its own judgement for the judgement in question. It has only got to
consider whether the view taken is a possible view on the evidence on record.
The aforesaid view was reiterated in later decisions. 16

An analysis of sub-sections (1) (a) and (2) (a) of Section 33 shows that they apply where:
Sub-section (1) Sub-section (2)
(z) there is pending dispute; (z) there is pending dispute;
(ii) service conditions are connected with (ii) service conditions are not connected
the dispute; with the dispute;
(iii) service conditions sought to be (iii) any service condition, whether
altered must be prejudicial to the prejudicial or not, is sought to be
workmen concerned. alerted.
(iv) service conditions sought to (iv) service conditions sought to
be altered affect the workman be altered affect the workman
concerned in the dispute. concerned in the dispute.
It will be observed that if any of the aforesaid four elements under sub-section (1) are
missing, that sub-section would not apply. However, sub-section (2) comes into operation not
when any of the elements of sub-section (1) are missing but, only when all the four elements
of that sub-section are concurrently present. Thus, for instance, if the dispute is not pending,
sub-section (1) would not apply. Again, if the service conditions sought to be altered do not
affect the workmen concerned in the dispute, sub-section (1) would not apply. If the matter
is unconnected with the dispute, the employer can change service conditions even if such
service conditions are not prejudicial to the workman concerned, only in accordance with

15 Martin Burn Ltd v. Banerjee (RN), (1958) 1 LLJ 247.

16 L K Textile Mills v. Its Workman, AIR (1961) SC 860; Swatantra Bharat Mills v. Ratan Lal, AIR (1961)
SC 1156; Central Bank of India v. PC Jain, AIR (1969) SC 183; Lalia Ram v. DCM Chemical Works, AIR
(1978) SC 1004 and Cominco Binani Zinc Ltd v. KN Mohnan, (1993) Lab. IC 1298.
Management's Prerogative During the Pendency of Proceedings and Notice of Change • 641

the standing orders. But, where the matter is connected with the dispute, the employer may
alter the service conditions of the workmen concerned, so long as they are not prejudicial
to them, without any reference to the standing orders.
The Supreme Court in Reserve Bank ofIndia v. C T Dighe17 reiterated its earlier view that
promotion of personnel relates to their condition of service and not the chance of promotion
only. Explaining this view, the Court observed:

It is difficult to see how alteration of the conditions of eligibility governing

the employees of a particular cadre can amount to changing the conditions
of service of employees of another cadre, assuming that the said conditions
are conditions of service. The change introduced in respect of stenographers
and personal assistants may have an impact on the promotional prospects
of employees from another cadre who are already in the panel or even those
who were expecting to be included in the panel, but it is not possible to agree
that this would amount to changing their conditions of service. It is difficult
to think of the conditions of service of an employee as including an implied
right to prevent the employer from altering the conditions of other employees.

A. Lockout
Tribunals and courts impliedly concede that lockout affects the 'condition of service.'
However, they assert that the conditions of service would be affected if they lose their
right to receive their pay during the period of lockout in all circumstances, but the question
whether they would be entitled to get wages during that period cannot be postulated with
certainty for that would depend upon a variety of conditions.

B. Lay-off
Lay-off affects the earning of the concerned workman and would prima facie appear to attract
the provisions of Section 33. However, the tribunals and courts have laid down that lay-off
in accordance with (i) established practice, (ii) provisions of standing orders, (iii) legislative
prescription, does not come within clause (a) of sub-section (1)(2)(3) of Section 33.

C. Suspension
In Laxmi Devi Sugar Mills Ltd v. Ram Sarup,18 the Supreme Court observed that suspension
does not amount to punishment; it is only an interim measure and will last till the application
for permission to punish the workman is made and the tribunal passes order thereon. If the
tribunal grants the permission, the concerned workman will not get wages for the suspension
period, but if the permission is refused, he shall be paid for the whole period.
In Sasamusa Sugar Works (P) Ltd v. Shobrati Khan,19 the Supreme Court observed that if
the employer suspends a workman, he must pay wages for the suspension period. However,
in Hotel Imperial v. Hotel Workers Union 20, the Supreme Court observed:

17 (1981) 2 LLJ 223 (SC).

16 Lakshmi Devi Sugar Mills v. Ram Sarup, (1957) 2 LLJ 17 (SC).
19 (1957) 2LLJ 17 (SC).
20 Hotel Imperial v. Hotel Workers Union, (1959) 2 LLJ 544 (SC).
642 • Industrial Relations and Labour Laws

The undisputed common law right of the master to dismiss his servant for
proper cause has been subjected by Section 33 to a ban; and that in fairness must
mean that pending the removal of the said statutory ban, the master can after
holding proper inquiry, temporarily terminate the relationship of master and
servant by suspending his employee pending proceedings under Section 33.

D. Transfer
In K Devender Reddy v. Singareni Collieries Company Ltd,21 the Andhra Pradesh High Court held
that if any employer transfers the workman during pendency of conciliation proceedings to
an equivalent post, that will not amount to alteration of his conditions of service. Transfer
is a condition of service.

Section 33 (2) (b) permits an employer to discharge or punish a workman by way of dismissal
or otherwise for any act of misconduct not connected with the dispute pending before the
authority, in accordance with the standing orders, or with the terms of contract whether
express or implied. But the proviso to this clause requires the employer in cases of discharge
or punishment by way of dismissal or otherwise to pay to the workman concerned wages
for one month and to make an application to the authority before which the proceeding is
pending for 'approval' of the action taken'. 22
A three judge bench of the Supreme Court in Tata Iron and Steel Co. Ltd v. SN Modak23,
had the occasion to spell out the nature of the order of discharge or dismissal. The employer
ruled that such order is incomplete and inchoate until the approval is obtained. The
employer could not effectively terminate the relationship of the employer and the employee,
as the question of the validity of the order would have to be gone into, and if approval is
not accorded by the tribunal, he would be bound to treat the workmen concerned as his
employees and pay them all the wages for the period even though he subsequently could
proceed to terminate the employees' services. The aforesaid view was reiterated by the
Supreme Court in S. Ganpathy v. Air India. 24 The Court held that the relationship of employer
and employee is not effectively terminated by the passing of the order of discharge or
dismissal until approval thereto in terms of Section 33 (2) (b) is accorded by the tribunal.
The provision of Section 33 (2) (b) has given rise to the following two issues:
(i) Whether the action of the company in removing the names of applicants from its rolls
on the presumption that they had abandoned it, constituted alteration in the conditions
of service of the workmen?

21 (1999) LLR 242

22 MS Manickam v. Cheran Transport Corporation, (1981) 1 LLJ 396 (Madras). If there is no ample evidence
to connect the misconduct with the occurrence or incident against an employee, it is always open
to the authority under Section 33(2)(b) to say that the finding of the inquiry officer are perverse.
See M/s Brakes India Ltd v. Asstt. Labour Commissioner, (1994) Lab. IC 552.
23 AIR 1966 SC 380 at 384.
24 1993 Lab. IC 1966.
Management's Prerogative During the Pendency of Proceedings and Notice of Change • 643

(iz) Whether in the absence of any pleading or request by the employer, it is the duty of the
labour court or tribunal to call suo motu the employer to adduce additional evidence
to justify the termination of service of a workman? We will deal with these questions
seriatim.
The first issue was raised in GT Lad v. Chemicals and Fibres India Ltd. 25 In this case, the
appellant along with certain other workmen went on an indefinite and peaceful strike to
demand reinstatement of three dismissed leaders. These workers did not resume duties in
spite of notice from the company to do so by a specified date failing which their absence
would be treated as voluntary abandonment of service and their names would be struck
off from muster-rolls. Thereafter, the company sent separate communications to the
appellant and others informing them that by not reporting for duty, they had confirmed
its presumption that they were no longer interested in continuing their service in the
company. It therefore struck off their names from its rolls and sent a cheque to each for the
amount due to them. There was nothing in the standing orders of the company to indicate
that it could terminate the services of workmen on the ground of abandonment of service
because of their going on strike in enforcement of their demands. The Supreme Court held
that in the absence of any provision in the certified standing orders by virtue of which the
company could have terminated the services of the appellants, the impugned action on
its part amounted to an alteration in the conditions of service of the appellants during the
pendency of the industrial dispute before the labour court, which adversely affected them,
could not be countenanced.
In Shankar Chakravarty v. Britannia Biscuit Co. 26, the Supreme Court was invited to decide
the second issue. In this case, the management after holding an inquiry which was found to
be defective and in violation of natural justice, terminated the service of the workman and
gave him one month's wages in lieu of notice. Since an industrial dispute between workmen
and the management was pending before the industrial tribunal, the management filed an
application under Section 33 (2) (b) seeking approval of its action by the authority concerned.
The tribunal held that the inquiry was conducted in violation of the principles of natural justice.
Accordingly, the application was rejected. The company thereupon filed a writ petition under
Articles 226 and 227 of the Constitution, in the Calcutta High Court, but it was dismissed. The
company then preferred letters patent appeal before a division bench of the Calcutta High
Court. It held that after the industrial tribunal has adjudicated upon the preliminary issue as
to whether the inquiry was in accordance with the principles of natural justice and having held
against the company, it was incwnbent upon him to give to the employer an opportunity to
lead evidence to prove the charges alleged against the workmen. It further observed that as
the issue about the validity of the inquiry was not decided as a preliminary issue and since
thereafter no opportunity was given to the employer, it would be necessary to remand the
matter to the industrial tribunal for giving an opportunity to the employer to adduce further
evidence, if so advised, and then to finally dispose of the application under Section 33 (2) (b ).
Thereupon, an appeal was filed in the Supreme Court. The Court held:

Undoubtedly, if such a pleading is raised, an opportunity is sought to be

given but if there is no such pleading either in the original application or in
the statement of claim or written statement or by way of application, during

25 G TLad v. Chemicals and Fibres India Ltd, (1979) 1 LLJ 260.

26 Shankar Chakravarty v. Britannia Biscuit Co., (1979) 2 LLJ 194(SC).
644 • Industrial Relations and Labour Laws

the pendency of the proceedings, there is no duty cast by law or by the rules
of justice, reason and fair play that a quasi-judicial tribunal like the industrial
tribunal or the labour court should adopt an advisory role by informing the
employer of its rights, namely the right to adduce additional evidence to
substantiate the charges when it failed to make good the domestic inquiry and
then to give an opportunity to it to adduce additional evidence.
In view of this, the Court said that apart from being unfair to the workmen, it would
be against the principles or rules governing the procedure to be adopted by quasi-judicial
tribunals, against the adversary system and the principles governing the decision of lis
between the parties arrayed before such tribunals.

Scope of Section 33 (2) (b)

The jurisdiction of the tribunal while considering an application for grant of approval has
succinctly been stated by the Supreme Court. Thus, in Martin Burn Ltd v. R N Banerjee,27
as stated earlier the Court held that while exercising jurisdiction under Section 33(2)(b)
of the Act, the industrial tribunal is required to see as to whether a prima facie case has
been made out as regards the validity or otherwise of the domestic inquiry held against
the delinquent; keeping in view the fact that if the permission or approval is granted, the
order of discharge or dismissal which may be passed against the delinquent employee
would be liable to be challenged in an appropriate proceeding before the industrial
tribunal in terms of the provision of the Industrial Disputes Act.
In Cholan Roadways Ltd v G. Thirugnanasambadam 28, the Supreme Court also observed
the standard of proof required in a domestic inquiry vis-a-vis a criminal trial is absolutely
different. Whereas in the former 'preponderance of probability' would suffice; in the
latter, 'proof beyond all reasonable doubt' is imperative. The tribunal while exercising
its jurisdiction under Section 33(2)(b) of the Industrial Disputes Act was required to bear
in mind the aforementioned legal principles. Furthermore, in a case of this nature, the
probative value of the evidence showing the extensive damages caused to the entire left
side of the bus; the fact that the bus first hit the branches of a tamarind tree and then
stopped at a distance of 81 feet there from even after colliding with another bus coming
from the opposite direction deserved serious consideration at the hands of the tribunal.
The nature of impact clearly demonstrates that the vehicle was being driven rashly or
negligently.

Application of Res lpsa Loquitur

In Pushpabai Parshottam Udeshi v. Ranjit Ginning and Pressing Co. Pvt. Ltd29, the Supreme
Court observed:

The normal rule is that it is for the plaintiff to prove negligence but as in
some cases, considerable hardship is caused to the plaintiff as the true cause
of the accident is not known to him but is solely within the knowledge of the

27 AIR (1958) SC 79: (1958) I LLJ 247.

26 (2005) ILLJ 569.
29 AIR 1977 sc 1735: (1977) 2 sec 745.
Management's Prerogative During the Pendency of Proceedings and Notice of Change • 645

defendant who caused it, the plaintiff can prove the accident but cannot prove
how it happened to establish negligence on the part of the defendant. This
hardship is sought to be avoided by applying the principle of res ipsa loquitur.
The general purport of the words res ipsa loquitur is that the accident 'speaks
for itself' or tells its own story. There are cases in which the accident speaks for
itself so that it is sufficient for the plaintiff to prove the accident and nothing
more. It will then be for the defendant to establish that the accident happened
due to some other cause than his own negligence ...
The above principle was applied in Sarla Dixit (Smt.) v. Balwant Yadav. 30
In Thakur Singh v. State of Punjab 31, the Supreme Court observed:

It is admitted that the petitioner himself was driving the vehicle at the relevant
time. It is also admitted that the bus was driven over a bridge and then it fell
into a canal. In such a situation, the doctrine of res ipsa loquitur comes into play
and the burden shifts on to the man who was in control of the automobile to
establish that the accident did not happen on account of any negligence on his
part. He did not succeed in showing that the accident happened due to causes
other than negligence on his part.
In Cholan Roadways Ltd v. G Thirugnanasambandam 32, the Supreme Court ruled that
res ipsa loquitur is a well-known principle which is applicable in the instant case. Once the
said doctrine is found to be applicable, the burden of proof would shift on the delinquent.
As noticed hereinabove, the inquiry officer has categorically rejected the defence of the
respondent that the bus was being driven at a slow speed. The Court added that the burden
of proof was, therefore, on the respondent to prove that the vehicle was not being driven
by him rashly or negligently. Further, in a case involving an accident, it is not essential to
examine the passengers of the bus.

Effect of failure to Make Application, Withdrawal of Application or

Refusal To Grant Application
Prior to the decision, conflicting views were expressed even by the Supreme Court. While
two benches of three judges in Strawboard Manufacturing Co. v. Govind33 and Tata Iron and
Steel Co. Ltd v. SN Modak34 discussed earlier, have held that if the approval is not granted
under Section 33(2)(b), the order of dismissal becomes ineffective from the date such order
was passed and, consequently the employee would become entitled to wages from the date
of dismissal. This view was reiterated by a bench of two judges in S Ganapathi v. Air India. 35
Here, the Court has held that the order of dismissal passed without the approval under
Section 33(2)(b) remains in inchoate condition.

30 AIR 1996 sc 1274; (1996) 3 sec 179.

31 (2003) 9 sec 208.
32 (2005) 1 LLJ 569.
33 AIR 1962 SC 1500.
34 AIR 1966 SC 380.
35 AIR 1993 SC 2430.
646 • Industrial Relations and Labour Laws

On the contrary, a bench of three judges in Punjab Beverages Pvt. Ltd, Chandigarh v.
Suresh Chand, 36 has held that non-approval of the order of dismissal or failure to make
application under Section 33(2)(b) would not render the order of dismissal inoperative;
failure to apply for approval under Section33(2)(b) would only render the employer liable
to punishment under Section 31 of the Act and the remedy open to the employee is either
by way of a complaint under Section 33-A or by way of a reference under Section lO(l))(d)
of Industrial Disputes Act.
The constitution bench in Jaipur Zila Sahkari Bhoomi Vikas Bank Ltd v. Ram Gopal Sharma 37,
decided an extremely important issue relating to interpretation of Section 33(2) (b) of the
Industrial Disputes Act, namely: (i) whether the order of dismissal becomes ineffective
from the date it was passed or from the date of non-approval of the order of dismissal if
the approval was not granted under Section 33(2)(b); and (ii) whether failure to make an
application under Section 33(2)(b) would render the order of dismissal inoperative? (iii)
What is the effect of refusal to grant application? The Court after taking note of its earlier
judgements deprecated the tendency of the employer to take advantage of the loopholes in the
proviso to Section 33(2)(b). It observed that an employer who does not make an application
under Section 33(2)(b) or withdraws the one made, cannot be rewarded by relieving him of
the statutory obligation created on him to make such an application. To do so would put
such employer in a happier or more comfortable position than an employer who obeys the
command of law and makes an application inviting scrutiny of the authority in the matter
of granting approval of the action taken by him. The Court not only laid emphasis on the
need to adhere and obey the law in a system governed by rule of law but deprecated the
tendency of the employer who by design (i) avoids to make an application after dismissing
or discharging an employee or file it and (ii) withdraws the application before any order
is passed on it, on its merits, 'to take a position that such order is not inoperative or void
till it is set aside under Section 33-A notwithstanding the contravention of Section 33(2)(b)
proviso, driving the employee to have recourse to one or more proceedings by making a
complaint under Section 33-A or to raise another industrial dispute or to make a complaint
under Section 31(1).' The Court remarked that such an approach (i) destroys the protection
specifically and expressly given to an employee under proviso to Section 33(2)(b) and (iz)
may lead to victimization, unfair labour practice or harassment. The Court ruled:

... if the authority refuses to grant approval, obviously it follows that the
employee continues to be in service as if the order of discharge or dismissal
had never been passed. The order of dismissal or discharge passed invoking
Section 33(2)(b) dismissing or discharging an employee brings an end to the
relationship of the employer and employee from the date of his dismissal
or discharge but that order remains incomplete and inchoate as it is subject
to approval of the authority under the said provision. In other words, this
relationship comes to an end de jure only when the authority grants approval.
If approval is not given, nothing more is required to be done by the employee,
as it will have to be deemed that the order of discharge or dismissal had never
been passed. Consequences of it are that the employee is deemed to have
continued in service entitling him to all the benefits available. 'This being the
position, there is no need of a separate or specific order for his reinstatement...

36 AIR 1978 SC 995.

37 (2002) ILLJ 834 (SC.); (2002) 2 sec 244.
Management's Prerogative During the Pendency of Proceedings and Notice of Change • 64 7

From the above, it is evident that if approval is not given by the labour court under
Section 33(2)(b) for an order of dismissal or discharge effected by a management on its
employee, it would be deemed that the order of discharge or dismissal had never been
passed and consequently the employee is deemed to have continued in service entitling
him to all the benefits available. 38 Thus, not making an application under Section 33(2)(b)
seeking approval or withdrawing the application once made before any order is passed
thereon, contravention of proviso to Section 33(2)(b).
The aforesaid view was reiterated by a two judge bench of the Supreme Court in
Indian Telephone Industries Ltd v. Prabhakar H Manjare 39 • In this case, the employer filed an
application before the tribunal seeking approval of the order of dismissal of the workmen
during the pendency of an industrial dispute before the tribunal. The tribunal refused to
grant permission because the order of dismissal was invalid for non-compliance of Section
33(2)(b). Subsequently, the management passed another order of dismissal of workmen
and then filed another application before the tribunal without paying full wages to the said
workmen. The tribunal refused to grant the permission. The employer then filed a writ
petition. The single judge of the High Court upheld the order of the tribunal; the respondents
then filed writ appeals challenging the order of the tribunal as affirmed by the single judge.
The division bench of the High Court by the impugned order allowed the appeals and set
aside the order of the single judge.
Aggrieved by the aforesaid decision, the petitioners filed a special leave petition before
the Supreme Court. The Court held that it was not open to the employer to make a second
application seeking approval of its second order of dismissal, particularly when full wages
were not paid to them. The net effect of the decision shall be that the order of discharge
or dismissal had never been passed and consequently, the employee would be deemed to
have continued in service entitling him to all the benefits available.
A perusal of the aforesaid judgements reveals that the Supreme Court has not only
overruled the decision of the three-judge bench in Punjab Beverages case but has also failed
to take note of its earlier decisions in Hindustan General Electric Corporation Ltd v. Bishwanath
Prasad40 and Rodrick LA v. Karan Chand Thaper & Brothers. 41 In the former case, the three-judge
bench of the Supreme Court while dealing, inter alia, with Section 33 observed that' ... these
sections do not lend themselves to the construction that as soon as the labour court, tribunal,
etc., find that there has been a violation of Section 33, it should award reinstatement.' The
Court added that 'it must go through the proceedings which have to be taken under Section
10 and it would be the duty of the labour court, etc., to examine the merits of the case in the
light of the principles formulated in Indian Iron and Steel Company v. Their Workmen. 42 In the
latter case, the Supreme Court held that if an application is made by an employee under
Section 33-A and it is shown that the impugned dismissal of the employee has contravened
Section 33, it is open to the employer to justify the dismissal on merit by adducing satisfactory
evidence before the tribunal.'

38 The aforesaid view was followed in State Express Transport Corporation Ltd v. Arasu Vuralvua
Pokkuvarthu Oozhlyar Sangam, 2011 LLR 278 (HC Madras)
39 (2002} 3 LLJ 1134.
40 (1971) 2 LLJ 340.
41 (1963} 1 LLJ 248.
42 2004 LLR 953.
648 • Industrial Relations and Labour Laws

Quite apart from the above, one may wish to refer to the provision of section 2-A of the
Industrial Disputes Act which confers a right on the individual workman to raise dispute
connected with discharge, dismissal, retrenchment or otherwise termination of service.
The Supreme Court in Ram Avtar Sharma v. State of Haryana 43 has virtually compelled the
appropriate government to make a reference in all cases covered under section 2A. This
remedy would, however, be available where approval to terminate the services of employee
is granted by the tribunal on an application made by the employer under Section 33(2)(b)
of the Act.
In Delhi Transport Corporation v. Sardar Singh44, the Supreme Court held that (i) merely
because the absence of a workman was treated as leave without pay for the purpose of
maintaining correct record by the management, it does not absolve a workman from the
misconduct of his absence, (iz) when an employee habitually absents himself from duty even
without sanctioned leave for very long period, it prima facie shows lack of interest in work.
The Supreme Court in Indian Telephone Industries Ltd v. Prabhakar H Manjare45, has held
that the conditions contained in the proviso to Section 33(2)(b) are mandatory in nature and
their non-compliance would render the order of discharge or dismissal void or inoperative.
The Court further held that if the tribunal refuses to grant approval sought for under Section
33(2)(b), the effect of it shall be that order of discharge or dismissal had never been passed
and consequently, the employee would be deemed to have continued in service entitling
him to all the benefits available.

When and Where the Tribunal can Interfere with Punishment

It has now been settled through Supreme Court decisions that the question of punishment
is essentially a management's decision and once the misconduct is proved either in inquiry
conducted by the management or by adducing evidence before the tribunal for the first
time, the quantum of punishments cannot be interfered with except where it is shockingly
disproportionate as to suggest unfair labour practice and victimization. Thus, in Workmen
of Firestone Tyre and Rubber Co. v. Management46, the Supreme Court ruled:

Once the misconduct is proved either in the inquiry conducted by an employer

or by the evidence placed before a tribunal for the first time, punishment
imposed cannot be interfered with by the tribunal except in cases where the
punishment is so harsh as to suggest victimization.
Earlier, in Hind Construction and Engineering Co. Ltd v. Their Workmen 47, the Supreme
Court observed:

In respect of punishment... for misconduct under the standing orders, if any,

is a matter for the management to decide and if there is any justification for
the punishment imposed, the tribunal should not interfere. The tribunal is
not required to consider the propriety or adequacy of the punishment or

43 1985 Lab. IC 1001.

44 2004 LLR 953.
45 2003 LLR 68.
46 Workmen of Firestone Tyre and Rubber Co. v. Management (1973) 3 SCR 587.
47 Hind Construction and Engineering Co. Ltd v. Their Workmen, (1965) 1 LLJ 462 at 465.
Management's Prerogative During the Pendency of Proceedings and Notice of Change • 649

whether it is excessive or too severe. But where the punishment is shockingly

disproportionate, regard being had to the particular conduct and past record
or is such as no reasonable employer would ever impose in like circumstances,
the tribunal may treat the imposition of such punishment as itself showing
victimization or unfair labour practice.
The aforesaid view was re-affirmed in Eastern Electric Trading Co. v. Baldev Lal.48
In ITC Ltd v. Government ofKarnatalat'J, two questions arose before the Court (z) whether
the appropriate government was competent to make a reference under Section 10 (1) when
the proceeding was pending before the tribunal? and (iz) whether the reference made by
the government would be vitiated due to the pendency of the proceedings under Section
33 (2) (b)? The division bench of the Karnataka High Court answered it in negative. The
Court ruled that the pendency of proceedings under Section 33 (2) (b ), did not in any way
affect the powers of government to make a reference under Section 10 (1 ), and the reference
under Section 10 did not stand vitiated on the ground that the government, in deciding to
make reference did not take into account the pendency under Section 33 (2) (b).Further,
the grant of approval under Section 33 (2) (b) did not conclude the dispute and the parties
would be free to seek reference under Section 10; the proceedings under Section 33 (2)(b)
would conclude immediately on a reference being made under Section 10 and the power
of the authorities in proceedings under Section 10 would be void and more so, after Section
11-A was introduced. In order to avoid future disputes, the Court recommended that it
would be better that similar provisions were made for automatic termination of proceedings
under Section 33 (2) (b) on a reference of the same dispute being made under Section 10.

B. Proviso to Section 33 (2) (b)

The proviso to Section 33 (2)(b) contemplates three things, namely:
(a) discharge or dismissal;
(b) payment of wages for one month; and
(c) making of an application for approval of the action taken.
The aforesaid acts must be simultaneous and the employer's conduct should show that
they form part of the same transaction, so that when he takes action under Section 33 (2)
by dismissing or discharging an employee, he should immediately pay him wages for one
month and also make an application to the tribunal at the same time. 50 Thus, in Straw Board
Manufacturing Co. Ltd v. Govind51 , the Supreme Court explains the concept of' simultaneous
and part of the same transaction' in the following words:

When, however, we say that the employer must take action simultaneously
or immediately, we do not mean that literally, for when things are to be done,
they cannot be done simultaneously but can only be done one after the other.
What we mean is that the employer's conducts should show that three things

48 Eastern Electric Trading Co. v. Baldev Lal, (1975) 2 LIJ 367 (SC).
49 (1985) 2 LLJ 430.
50 See Kalyani (PH.) v. AIR France, (1903) 1 LLJ 679 (SC); Tata Iron & Steel Co. Ltd v. Modak, SN, (1965)
2 LLJ 28 (SC); Filmistan (Pvt.) v. Balakrishna Bhiwa (1967) 2 LLJ 637 (Bombay); See also Lord Krishna
Textile Mills v. Its Workmen, (1961) 1 LLJ 211 (SC).
51 Straw Board Manufacturing Co. Ltd v. Govind, (1962) 1 LLJ 423 (SC).
650 • Industrial Relations and Labour Laws

contemplated under the proviso, namely, (i) dismissal or discharge, (iz) payment
of wages; and (iii) making of the applications are parts of the same transaction. If
that is done, there will be no occasion whether the application was made as part
of the same transaction, or at the same time when the action was taken, would
be a question of fact and will depend upon the circumstances of each case.
Again in Filmistan Pvt. Ltd v. Balakrishna Bhiwa 52, the Supreme Court held that 'the
question whether the application for approval under Section 33 (2) (b) proviso was made
as part of the transaction or at the same time, when the action was taken, is a question of
fact, and will depend upon the circumstances of each case.'
Whether stay of the reference proceedings by the High Court amounts to non-
pendency of proceedings
In BPL Ltd v. R. Sudhakar53, the question arose whether a dispute is said to be pending
before the industrial tribunal for the purposes of the proviso to Section 33(2)(b) during
the period when the operation of the order of reference of dispute remain stayed. The
Supreme Court answered the question in the negative and observed that (z) the tribunal gets
jurisdiction only on reference made by the government. When the operation of the very order
of reference was stayed, the question of the dispute pending before the tribunal does not
arise inasmuch as the reference order itself stood suspended so long as the stay order was
operative. Therefore, it could not be said that dispute was pending before the tribunal when
the workmen were dismissed from service and the stay order was operative. (ii) In case any
tribunal proceeds to pass an order inspite of stay of the operation of the order of reference
by the High Court, it may amount to contempt of the order of the High Court. (iii) In case
of some grave misconduct, the management cannot afford to sit idle or simply wait to take
action, particularly when stay of the operation of the order of reference is obtained at the
instance of union on behalf of the workmen. The Court held that as in the present case, on the
date of dismissal of the workman from service, the interim order staying the operation of the
order of reference was operative. The question of dispute being pending on that day did not
arise which is essential in order to make an application under proviso to Section 33(2)(b) of
the Act. Therefore, the appellant did not violate the provisions of Section 33(2)(b) of the Act.
Payment of One Month's Wages. It has been held in a catena of cases54 thatthe payment
of one month's wages to the discharged or dismissed workman is a mandatory provision
which should be complied with at the time of taking the action or within a reasonable time.
Thereafter, management is not allowed to make any deduction or adjusbnent against the
alleged past dues55 • The management may, however, make compulsory deduction to fulfil
a statutory obligation under the tax law. 56 It is not necessary that the wages for one month
should have been actually paid, because in many cases the employer could only tender the

52 Filmistan (Pvt.) Ltd v. Balakrishna Bhiwa, AIR 1972 SC 171.

53 (2004) 7 sec 223.
54 Straw Board Manufacturing Co. Ltd V. Govind, op. cit.; Delhi Transport Undertaking v. IT Delhi, (1965) 1
LLJ 428; Tata Iron & Steel Co. Ltd v. Modak SN, op. cit.; Calicut Wynd Motor Service (P) Ltd v. Industrial
Tribunal, (1982) Lab. IC 517; See also V K Verma v. Hindustan Machine Tools Ltd, (1999) LLR 370
(P &H).
55 Delhi Transport Undertaking v. Industrial Tribunal, (1965) 1 LLJ 420 (SC).
56 S Ganpathy v. Air India, 1993 Lab. (C (1966), (SC).
Management's Prerogative During the Pendency of Proceedings and Notice of Change • 65 1

amount before the dismissal but could not force the employee to receive the payment before
the dismissal becomes effective. 57
Application for approval of action taken. In Lord Krishna Textiles Mills v. Its Workmen 58,
the Court made an obiter:

Though an express permission in writing is not required in cases falling under

the proviso to Section 33 (2) (b), it is desirable that there should not be any
time lag between the action taken by the employer and order passed by the
appropriate authority in an inquiry under the said proviso.
In the State Bank of Bikaner v. Balai Chander Sen 59 Justice Wanchoo, while approving Straw
Board Manufacturing Co. Ltd60 observed:

.... But there is nothing in Section 33 (2)(b) which requires that an application
for approval can only be made after the action has been taken. We see nothing
in principle against the employer making an application under Section 33 (2)
(b) for 'approval' of the proposed action before the actual action is taken.....
Again in CS T Corporation v. Mohd. Noor Alam 61, it has been held that it is the conduct
of the employer that has to be considered and the dismissal or discharge, payment of wages
and making of the application for 'approval' form part of the same transaction.

Effect of Withdrawal of Application

In R S Nagar Central Electronics Ltd62, an application was filed before the industrial tribunal
seeking approval of the action of terminating services of the workman. During pendency of
such application, another application was filed seeking withdrawal of that application on
certain grounds. The tribunal rejected the application. Thereupon, the employer moved a
writ petition before the High Court. The High Court allowed the writ petition and directed
the withdrawal of such application. Aggrieved by this order, the workman filed a special
leave petition before the Supreme Court. The Court ruled that when an application for
approval is filed by the employer and later he wants to withdraw such application, no right
or liability flows from it and the same is done at the risk of the employer. The Court added
that the workman has no risk in the same.

Crucial Date for Seeking Permission

In Indian Oxygen Ltd v. T Natrajan 63, the employer initiated domestic inquiry against a
workman who was declared as' protected workman' at that time. He applied for permission
to the authority before which proceedings were pending. But before the disposal of the
application, the workman ceased to be a protected workman. The employer, therefore,

57 Syndicate Bank Ltd v. KRV Bhat, (1967) 2 LLJ 745 (SC); Muzaffarpur Electric. Supply Co. Ltd
v. SK Dutta, (1970) 21 Fae LR 321 (Patna).
58 Lord Krishna Textiles Mills v. Its Workmen, (1962) 1 LLJ 420 (SC).
59 State Bank of Bikaner v. Balai Chander Sen, AIR 1964 SC 732
60 (1962) 1 LLJ 423 (SC).
61 CST Corporation v. Mohd Noor Alam, AIR 1973 SC 1404.
62 (2003) s sec 1n.
63 1999 LLR 213.
652 • Industrial Relations and Labour Laws

withdrew the application for approval of dismissal under Section 33(2)(b) and dismissed
the workman. The Madras High Court held that the dismissal was not illegal because the
crucial date for seeking permission to dismiss is the date of dismissal and not the date of
initial action for disciplinary proceedings.

Section 33 of the Industrial Disputes (Amendment and Miscellaneous Provisions) Act of

1956, inter alia, protects to a greater extent concerned union officials64 of the registered
trade union against victimization and high-handed action of management. Sub-section (3)
of Section 33 of the Act makes it incumbent on the employer to take express permission in
writing whenever he wants to alter the conditions of service of any 'protected workmen'
concerned. He is also required to take prior permission for discharging or punishing the
workman by dismissal or otherwise. However, in Udumbanchola Estate Workers Union v.
Indian Cardamom Research Institute6 5, the Kerala High Court held that even if the workman
is a protected workman, merely because the employer failed to file an application under
Section 33(3) while imposing punishment of dismissal, it will not per se make the dismissal
void. The appropriate remedy is under Section 33-A of the Act.

Protected Workman
The explanation of sub-section (3) of Section 33 defines a 'protected workman', to mean 'a
workman who, being an officer of a registered trade union connected with the establishment
is recognized as such in accordance with the rules made in this behalf.'
Sub-section (4) of Section 33, lays down that for the purpose of sub-section (3) there shall
be one per cent protected workmen of total nwnber of workmen employed in the establishment,
subject to the condition that there shall be at least 5 and not more than 100 protected workmen
in every establishment. However, declaration of such workmen as protected workmen must be
made within a reasonable time so that the application may not become infructuous.66 Be that
as it may, the idea behind the insertion of such provision was obvious. 'The legislature in this
case appears to be anxious in the interest of healthy growth and development of trade union
movement to ensure for them complete protection against every kind of order of discharge
or punishment because of the employee's special position as an officer of a registered trade
union recognized as such in accordance with the rules made in that behalf.'67
Sub-section (3) of Section 33 does not afford any protection to the member of the
executive or other office-bearers of such trade union which is not registered under the
Trade Unions Act, 1926. Next, the requirement of a 'protected workman' being an officer
of a registered trade union excludes within its coverage such active and leading members
of trade unions who are not the officers of a trade union. Further, the requirement of a

64 Shri V V Giri observed in the Parliament:

The top executives who are generally victimized by the employers for trade union action are
protected whether the matters referred to are connected with the existing dispute or matters are
unconnected with the dispute. See Lok Sabha Debates, Part II Vol. Vl, (1956) 503.
65 1998 LLR 259.
66 Container Corporation of India v. Container Corporation Employes Union, (1998} LLR 301.
67 Air India Corporation Bombay v. VA Rehellow, (1972} 1 LLJ 501, 507-5098.
Management's Prerogative During the Pendency of Proceedings and Notice of Change • 65 3

protected workmen' being member of a union ignores the interest of those who are not the
members of any union but nevertheless at one time or the other, were involved in trade
union activities and were victimized for such activities. Moreover, sub-section (3) of Section
33 safeguards the interest of only protected workmen 'concerned' in the dispute. Further,
the scope of the 'limiting clause for any misconduct' is wider than that provided under
sub-section (1) or sub-section 2.

Declaration of Protected Workman

In Rama Kant Chaudhary v. S K Sarwatia, 68 the Delhi High Court has ruled that declaration of
workman as protected under Section 33(2)(b) is a positive act of the employer and unless the
employer so declares, a workman cannot claim that he is a protected workman under the
Act. But the choice is left to the union, to choose its office bearers who are to be 'protected
workmen'. It is a mandatory obligation cast on the employer under Section 33(4) of the Act.
The only option available to employer is to have recognized the workman nominated by
union as 'protected workman'. Merely that the union official is facing disciplinary action
would not render him ineligible of being recognized as a protect workman. 69

Section 33-A confers on industrial employees the right to seek the protection of industrial
tribunals in cases where their rights are violated contrary to the provisions of Section 33. It
confers dual protection to an employee aggrieved by the contravention of Section 33 namely,
(i) by imposing penalty under Section 31 (1); and (ii) by conferring the right to make an
application under Section 33 A. The section runs as follows:

Where an employer contravenes the provisions of Section 33 during the

pendency of proceedings before a conciliation officer, board, an arbitrator, a
labour court, tribunal or national tribunal, any employee aggrieved by such
contravention, may make a complaint in writing, in the prescribed manner-
(a) to such conciliation officer or board, and the conciliation officer or board shall take
such complaint into account in mediating in, and promoting the settlement of, such
industrial dispute; and
(b) to such arbitrator, labour court, tribunal or national tribunal and on receipt of such
complaint, the arbitrator, labour court, tribunal or national tribunal, as the case may
be, shall adjudicate upon the complaint as if it were a dispute referred to or pending
before it, in accordance with the provisions of this Act and shall submit his or its
award to the appropriate government and the provisions of this Act shall apply
accordingly.
This section was inserted in the Act in 1950. Prior to this, the only remedy available
to the employee against the breach of Section 33 was to raise an industrial dispute on
that behalf and to move the appropriate government for its reference to the tribunal for
adjudication under Section 10 of the Act. The trade unions complained that the remedy of

66 (2003) LLR 129 (Del.).

69 2010 LLR 544 (Kerala HC).
654 • Industrial Relations and Labour Laws

asking for a reference under Section 10 involved delay and left the redress of the grievance
of the employees entirely to the discretion of the appropriate government; because even in
cases of contravention of Section 33, the appropriate government was not bound to refer
the dispute under Section 10. That is why Section 33-A was enacted for making a special
provision for adjudication as to whether Section 33 has been contravened.
The conditions precedent for a complaint under this Section are (z) the complainant
must be a workman, and (iz) he must have been aggrieved because of contravention of
Section 33 by an employer during the pendency of adjudication proceedings.

A. Who Can Apply

Section 33-A grants relief only to an aggrieved employee. Reading Sections 33 and 33-A
together, it will appear that only those persons are competent to initiate proceedings under
Section 33-A who are both 'employees' a well as 'workmen'. The fact that the complainant
satisfies only one out of the two capacities of 'employee' and 'workman' is not sufficient.
Thus, the head of the personnel deparbnent in Bata Shoe Co. 70 who was an 'employee' but
was not a 'workman' was held to be not entitled to claim relief under Section 33-A. Again,
the tribunal has no jurisdiction to grant relief to the medical doctor in Bengal United Tea
Co. Ltd71 The decision in Kirloskar Oil Engines 72 is yet another illustration. Complainants
who are 'workmen' but not' employees' cannot lodge a complaint under Section 33-A, e.g.,
dependent entrepreneurs (assuming that they are 'workmen').
Section 33-A of the Industrial Disputes Act confers on industrial employees the right
to seek protection from the industrial tribunal where their rights are violated contrary to
the provisions of Section 33. It confers dual protection to an employee aggrieved by the
contravention of Section 33, namely, (z) by imposing penalty under Section 31(1); and (ii)
by conferring the right to make an application under Section 33-A. Rule 60 of the Industrial
Disputes (Karnataka) Rules, 1957 permits not only the workman but also any other person
who is acquainted with the facts to verify the facts averred in the complaint. Section 36 of the
Industrial Disputes Act also provides that workman may be represented by any member of
the executive or office-bearer of a registered trade union in any proceedings under the Act. 73
Mis B DK Process Control Pvt. Ltd v. Bhartiya Mazdoor Sangh 74, the question arose whether
a trade union can file a complaint under Section 33-A of the Industrial Disputes Act. The
Karnataka High Court answered the question in the affirmative and observed that in the
instant case, as the union has been authorized by the workmen in writing and the names
of the aggrieved workmen were also mentioned in the complaint, the application filed by
the union is to be treated as an application filed by the aggrieved workmen and, therefore,
the application filed by the union under Section 33-A of the Act is maintainable in law.

70 Bata Shoe Co. v. Its Workmen, (1956) 1 LLJ 278.

71 Bengal United Tea Co. Ltd, (1962) 2 LLJ 376 (SC).
72 Kirloskar Oil v. H L Bibawe, (1963) 1 LLJ 126.
73 (2002) s sec 400.
74 (2002) Lab IC NOC 24.
Management's Prerogative During the Pendency of Proceedings and Notice of Change • 65 5

B. Time-Limit of Reference Under Section 33-A

Section 33-A does not prescribe any time-limit for reference of the dispute to an industrial
tribunal. But courts75 have stressed that 'even so it is only reasonable that disputes should
be referred as soon as possible after they have arisen and after conciliation proceedings
have failed, particularly so when the disputes relate to discharge of workmen wholesale.'

C. Scope of Inquiry
Section 33-A requires that on receipt of the complaint of the aggrieved employee, the labour
court, tribunal or national tribunal shall adjudicate upon the complaint as if it were a dispute
referred to or pending before it in accordance with the provisions of this Act. The aforesaid
words indicate that the jurisdiction of the labour court, industrial tribunal or national
tribunal under Section 33-A is the same as the jurisdiction of these authorities relating to
adjudication of an industrial dispute on a reference being made to them under Section 10.76
The order passed in an application under Section 33-A is an award similar to one made
in a reference under Section 10 of the Act. Further, it has to be submitted to the appropriate
government and the same has to be published under Section 17 of the Act. 77
The first case where the question came up for consideration of the Supreme Court was
Automobile Products of India Ltd v. Rukmaji Bala. 78 Justice Das while construing Section 23 of
the Industrial Disputes (Appellate Tribunal) Act, 1950 which corresponds to Section 33-A
observed that the scheme of the Section indicates that the authority to whom complaint is
made is to decide both the issues, viz., (z) the effect of contravention, and (ii) the merits of the
Act or order of the employer. His lordship added that the provisions of the Section reveal:
'that the jurisdiction of the authority is not only to decide whether there has been a failure
on the part of the employer to obtain the permission of the authority before taking action
but also to go into the merits of the complaint and grant appropriate relief.'
The aforesaid view was reiterated in Equitable Coal Co. v. Algu Singh. 79 where the Court
observed:

In an inquiry held under Section 23, two questions were to be considered. Is the
fact of contravention by the employer of the provisions of Section 22 proved?
If yes, is the order passed by the employer against the employee justified on
the merits? If both these questions are answered in favour of the employee, the
appellate tribunal would no doubt be entitled to pass an appropriate order in
favour of the employee. If the first point is answered in favour of the employee,
but on the second point the ending is that on the merits, the order passed by
the employer against the employee is justified, then the breach of Section 22
proved against the employer may ordinarily be regarded as a technical breach
and it may not, unless there are compelling facts in favour of the employee,
justify any substantial order of compensation in favour of the employee.

75 See Shalimar Works Ltd v. Their Workmen, AIR (1959) SC 1217.

76 See Dalmia International Ltd v. Thomas, (1975) 2 LLJ 526 2 LLJ 526 (Kerala).
77 Bhavnagar Municipality v. A Karimbai, AIR (1977) SC 1229.
78 Automobile Products of India Ltd v. Rukmaji Bala. AIR (1955) SC 258 at 264.
79 Equitable Coal Co. v. Algu Singh, AIR (1958) SC 761.
656 • Industrial Relations and Labour Laws

In Punjab National Bank v. Its Workman 80, Justice Gajendragadkar pointed out that:

There can be no doubt that in an inquiry under Section 33-A, the employee
would not succeed in obtaining an order of reinstatement merely by proving
contravention of Section33 by the employer. After such contravention is proved,
it would still be open to the employer to justify the impugned dismissal on the
merits. That is a part of disputes which the tribunal has to consider because the
complaint made by the employer is treated as an industrial dispute and all the
relevant aspects of the said dispute are to be considered under Section 33-A.
Again in Punjab Beverages Pvt. Ltd v. Suresh Chand81 , Justice Bhagwati summarized the
effect of the aforesaid decisions in the following words:

.... If the contravention of Section 33 is established, the next question would

be whether the order of discharge or dismissal passed by the employer is
justified on merits. The tribunal would have to go into this question and decide
whether, on merits, the order of discharge or dismissal passed by the employer
is justified and if it is, the tribunal would sustain the order, treating the breach
of Section 33 as a mere technical breach. Since, in such a case, the original order
of discharge or dismissal would stand justified, it would not be open to tribunal
unless there are compelling circumstances, to make any substantial order of
compensation in favour of the workman.... The tribunal would have to consider
all the aspects of the case and ultimately what order would meet the ends of
justice would necessarily have to be determined in the light of the circumstances
of the case. But this much is clear that mere contravention of Section 33 by the
employer will not entitle the workman to an order of reinstatement, because
inquiry under Section 33-A is not confined only to the determination of the
question as to whether the employer has contravened Section 33, but even if
such contravention is proved, the tribunal has to go further and deal also with
the merits of the order of discharge or dismissal.

D. Power of Labour Court to Grant Interim Relief Under Section 33-A

Is the tribunal empowered to grant anticipatory relief in the nature of injunction to prevent a
bank from proceeding to make appoinbnent to the cadre of junior officer by promotion and
by direct recruibnent in the complaint filed under Section 33-A of the Industrial Disputes
Act, 1947? This issue came up for examination before the Kerala High Court in Dhanlakshmi
Bank Ltd v. Parameshwara Menon. 82 The Court held that Section 33-A did not contemplate
the grant of such anticipatory relief for prevention of any apprehended contravention of
Section 33 and observed:

If and when it is established before the tribunal that there has been, in fact
a contravention of Section 33 by the employer, the tribunal will, in such
event, pass appropriate orders granting effective relief to the workmen so

so Punjab National Bank v. Its Workmen, AIR 1960 SC 160.

61 Punjab beverages Pvt. Ltd v. Suresh Chand, AIR 1978 SC 995.
82 Dhanlakshmi Bank Ltd v. Parameshwara Menon, (1980) 2 LLJ 45.
Management's Prerogative During the Pendency of Proceedings and Notice of Change • 65 7

as to obliterate the consequences that may have resulted from the act of the
management performed in contravention of Section 33. It is only to this extent
that the jurisdiction of Section 33-A stretches. 83
The Court accordingly held that the grant of interim relief in the nature of injunction
was not within the competence of the tribunal since no such power has been conferred upon
it by any of the provisions of the Industrial Disputes Act.
The Gujarat High Court in Krishna Keshov Laboratories v. Ashwmbhai G Raval84, held
that the tribunal can pass an order for payment of subsistence allowance by way of interim
relief to the workmen.

SECTION- II

Section 9-A of the Industrial Disputes Act, 1947 requires:

No employer, who proposes to effect any change in the conditions of service applicable
to any workman in respect of any matter specified in the Fourth Schedule, shall effect such
change:
(a) without giving to the workmen likely to be affected by such change a notice in the
prescribed manner of the nature of the change proposed to be effected; or
(b) within 21 days of giving such notice.
An analysis of the aforesaid provisions reveals that Section 9-A comes into operation
the moment the employer proposes to change any condition of service applicable to any
workman, and once this is done, 21 days' notice has to be given to the workmen.

Scope and Purpose

The purpose of enacting Section 9-A is to afford an opportunity to the workmen to consider
the effect of the proposed change and, if necessary to present their point of view on the
proposal. Such consultation further serves to stimulate a feeling of common/joint interest in
the management and the workmen in industrial progress and thereby increases productivity.
This approach on the part of the industrial employer would reflect his harmonious and
sympathetic cooperation in improving the status and dignity of the industrial employee in
accordance with the egalitarian and progressive trend of our industrial jurisprudence, which
strives to treat the capital and labour as co-sharers and to break away from the tradition
of labour's subservience to capital.85 Section 9-A contemplates three stages: the first stage
is the proposal by the employer to effect a change, the next stage is when he gives a notice
and the last stage is when he effects a change in the conditions of service on the expiry of
21 days from the date of the notice. The conditions of service do not stand changed, either
when the proposal is made or the notice is given but only when the change is actually

63 Id. at 47.
64 (1999) LLR 210.
65 M/ s Tata Iron and Steel Co. Ltd v. The Workmen (1972) 2 LLJ 259.
658 • Industrial Relations and Labour Laws

effected. That actual change takes place when the new conditions of service are actually
introduced.86 If there is no such change, Section 9-A does not come into operation. 87 Section
9-A comes into operation at the moment the employer proposes to change the conditions of
services applicable to any workmen, and once this is done, 21 days' notice has to be given to
the workmen. 88

Cancellation of the System of Direct Payment by Introducing

Payment by Contractor
Where the employers refused to pay wages unless the employees agree to work in accordance
with it as recognition scheme contrary to Section 9-A of the Industrial Disputes Act, it was
continued refusal to pay wages and would be a permanent alteration in the conditions of
service and not a solitary instance for which applications could have been made under Section
33-A. 89 The Supreme Court emphasized the need of complying with the provisions of Section
9-A before introducing any change in the conditions of service. Thus in Workmen of FCI of
India 90, the management cancelled the system of direct payment of wages and interposed the
contractor without complying with the provisions of Section 9-A. On these facts, the Court
held that it amounted to alteration both in wages and mode of payment to the disadvantage
of the workmen. A notice was, therefore, required to be given before introducing this change.
Omission to do so amounted to an illegal change inviting penalty under Section 31 (2).

Withdrawal of Customary Concession or Privilege

The Supreme Court in General Manager (Operations), State Bank of India v. State Bank of
India Staff Union 91 held that Clause 8 of the conditions of service prescribed in the Fourth
Schedule, namely, 'withdrawal of any customary concession or privilege or change in usage
under Section 9-A does not cover participation in an election to a municipal council or local
body'. Therefore, the circular laying down a condition that the employees contesting an
election would give an undertaking that he was not and he would not become a member
of a political party and that he was not being nominated by a political party and that he
would not be required to be present in the council/body during office hours and would
not receive remuneration and would not plead his membership of such body as a bar to
his transfer would not bring any change in the conditions of service of a workman under
Section 9-A of the industrial Disputes Act, 1947.

Voluntary Retirement Scheme

The Bombay High Court in KEC International Ltd v. Kamani Employees Union 92 held that
Income Tax approved Voluntary Retirement Scheme (VRS) results in reduction of posts and
hence attracts Section 9-A read with Item 11 of the IVth Schedule of the Industrial Disputes
Act, 1947. On the facts of the case, the Court distinguished those workmen who accepted
VRS but had encashed the compensation from those workmen who accepted VRS but had

86 North Brook Jute Co. Ltd v. Workmen, AIR 1960 SC 879.

87 Workmen of Sur Iron & Steel Co. v. Sur Iron & Steel Co., (1971) 1 LLJ 570 (SC).
88 Indian Oil Corporation Ltd v. Workmen, (1976) 1 SCC 63.
89 Hindustan Lever Ltd v. Ram Mohan Ray, (1973) 4 sec 141.
90 (1985) 2 LLJ 4.
91 (1998) LLR 402.
92 (1998) CLR 3.
Management's Prerogative During the Pendency of Proceedings and Notice of Change • 65 9

not encashed the compensation cheque. In the latter category, the complaint of violation of
Section 9-A is maintainable.

Change in Age of Retirement

In Punjab State Co-operative Supply and Marketing Federation Ltd v. Presiding Officer, Industrial
Tribunal, Punjab, 93 the issue regarding the age of retirement of class IV employees working in
Madded plants/ units was considered in the meeting of the board of directors. The board, inter
alia, resolved that the age of retirement as mutually agreed between the management and class
IV employees of Madded plants and units in terms of Rule 39 of the Model Standing Order
be 58 years. Accordingly, copies of the notice were sent to the manager/ general manager,
Madded Punjab Fertilizers, Ludhiana with a direction to them to serve the same upon the
employees union. A copy of the notice was also displayed on the main entrance gate and one
copy was endorsed to the Secretary, Punjab Madded Employees Union (Regd.) and Punjab
Fertilizers, Industrial Focal Point, Ludhiana. The workmen who were adversely affected by
the resolution raised an industrial dispute which was referred by the state government to
the tribunal. They claimed that their conditions of service had been changed prejudicially
affecting them without giving notice under Section 9-A of the Industrial Disputes Act, and
therefore, the resolution passed by the board of directors is liable to be invalidated. They
also pleaded that the board of directors of the Federation did not have the jurisdiction to
amend/ modify the 1967-Rules so as to deprive them of the benefits admissible under those
Rules. According to the workmen, the registrar alone was competent to amend or modify
the 1967-Rules and in any case, this could not be done by the management of the Federation
without prior approval of the registrar. The employer (petitioners) contested the claim of
the workmen by asserting that change in the conditions of service of the workmen had
been effected after giving notice to them through their union. Aggrieved by this award, the
management filed a writ petition before the Punjab and Haryana High Court. The Court,
while dismissing the petition, laid down the following principles:

Section 9-A which is couched in mandatory form, lays down that 'no employer
who proposes to affect any change in the conditions of service applicable to
any workman in respect of any matter specified in the Fourth Schedule, shall
affect such change without giving to the workman likely to be affected by such
change, a notice in the prescribed manner of the nature of the change proposed
to be effected'. This necessarily means that individual workman, who is likely
to be affected by the proposed change in the conditions of service, must be
given notice of the proposed change. The object underlying the requirement
of issuing notice to the workman is to enable him to make representation
against the proposed change and also take a decision whether or not to
continue in the employment of the particular employer. Therefore, sending of
notice to the union of the workman cannot be treated as sufficient compliance
with the mandatory requirement of Section 9-A. As a logical corollary to the
aforementioned conclusion, it must be held that implementation or resolution
passed by the board of directors of the Federation was vitiated due to non-
compliance with Section 9-A of the Act and the tribunal did not commit any
illegality in granting a declaration to that effect.

93 (2003) LLR 463.

660 • Industrial Relations and Labour Laws

Notice of Change-Mere Display of Notice not Sufficient

In Management of Salem District Co-operative Milk Producers' Union Ltd v. Industrial Tribunal 94,
the Madras High Court held that mere display of the notice on the notice board will not
be sufficient. The notice must be in terms of the provisions of the Industrial Dispute Act
and the Tamil Nadu Industrial Disputes Rules which, inter alia, stipulate that it must be
exhibited in Tamil.

Withdrawal of Construction Allowance Without Notice of Change

In Hindustan Steel Works Construction Ltd v. Hindustan Steel Works Construction Ltd Employees
Union 95, the Supreme Court held that a writ petition should not be entertained by the High
Court under Article 226 of the Constitution particularly in a matter like alleging change in
conditions of service by the workmen viz., withdraw I of construction allowance by a public
sector undertaking when appropriate remedy and forum are provided under the Industrial
Disputes Act and as such, the learned single judge as well as the division bench erred in
accepting the writ and appeal respectively as filed by the workers through their union.
The Supreme Court, therefore, directed the employees' union to approach the appropriate
government after framing the terms to be referred for adjudication.

When Notice of Change not Necessary

In Harmohinder Singh v. Kharga Canteen, Ambala Cantt. 96, the Supreme Court held that it is
not necessary to give any notice to the workman under Section 9-A of the ID Act before
introducing Para 3-A in the Standing Orders. Besides, the respondent's averment that the
amended standing orders were duly intimated to all its employees who had also signed
the same has not been controverted by the appellant.
Recovery of Payments towards Inadmissible Allowances and Incentives
In Jossie v. Flag Officer Commanding-in-Chief7, the Kerala High Court held that recovery of
payment made towards inadmissible allowance made by mistake is not violation of Section
9A of Industrial Disputes Act, 1947.

Transfer of Employees
In Associated Cement Co. Ltdv. Cement Staf!Union 98, the Bombay High Court held that transfer
of an employee being an incident of service, there is no question of the order of transfer not
being in violation of Section 9A of the Industrial Disputes Act, 1947.

Reduction in Pay of Workmen

In Sikh Educational Society v. Presiding Officer, Industrial-cum-Labour Court, UT, Chandigarh,99
the Punjab and Haryana High Court held that there was violation of Section 9A

94 2010 LLR 435.

95 2005 LLR 1025.
96 2001 LLR 849 (SC}.
97 2011 LLR 1168.
96 2010 LLR 162.
99 2011 LLR 159.
Management's Prerogative During the Pendency of Proceedings and Notice of Change • 661

because notice of change was not given to the workmen before reducing their pay by
withdrawing the benefit of merging 50 per cent of dearness allowances in their basic pay.

Recommendations of the (Second) National Commission on Labour

The (Second) National Commission on Labour has recommended that there should be no
statutory obligation for the employer to give prior notice in regard to item 11 of the Fourth
Schedule for the purpose of increase in the workforce, as is the position now under Section
9A. Notice of change, issued by an employer as per provisions of Section 9A, should not
operate as a stay under Section 33 through such a decision of the management will be
justifiable under Section 33-A.
 PART IV

STANDING ORDERS
Contextual Frame-
work of the Industrial
Employment (Standing
Orders) Act, 1946 23
The modern law of industrial employment requires that the terms of employment, conditions
of service and rules of discipline should not only be written and known to the employees1
concerned but they should also be reasonable, fair and uniform. Before the passing of the
Industrial Employment (Standing Orders) Act, 1946, conditions of service of industrial
employees were invariably ill-defined and were hardly ever known with even a slight degree
of precision to the employees. 2 Further, in many industrial establishments, the conditions of
service of employees were not uniform and were not even reduced to writing. 3 No doubt, in
some large scale industrial establishments, there were standing orders and rules to govern
the day-to-day relations between the employers and workers but such standing orders or
rules were one-sided and were very elastic to suit the convenience of employers. Further,
neither workers' union nor the government was consulted before these rules or standing
orders were framed and more often than not, they gave an upper hand to employers in
respect of all disputable points. 4 This state of affairs resulted in discriminatory treahnent
between employers and employees, though all of them were appointed in the same premises
and for the same and similar work. 5 Indeed, it was not only detrimental to the interest
of workers but even against the interest of industry because 'it resulted in unnecessary

1 An industrial worker has the right to know the terms and conditions under which he is employed
and the rules of discipline which he is expected to follow. Broadly speaking, in Indian industries
the rules of service are not definitely set out and, like all other laws; where they exist, they have
been very elastic to suit the convenience of employers. No doubt, several large scale industrial
establishments have adopted standing orders and rules to govern day-to-day relations between the
employers and workers, but such standing orders or rules are merely one-sided. Neither workers'
organizations nor government are generally consulted before these orders are drawn up and more
often than not, they have given the employers the upper hand in respect of all disputable points.
[See Government oflndia, Labour Investigation Committee Report (Main Report), 1946, 109.]
2 See UP State Electricity Board v. Hari Shankar Jain, (1978) 4 SCC 16.
3 S S Rly Co. v. Workers Union, AlR (1969) SC 513 at 518.
4 Ibid.
5 Agra Electric Supply Co. v. Aladin, (1969) 2 LLJ 540,544 (SC); See also UP Electric Supply Co. Ltd v.
Their Workers, (1972) 2 SCC 54.
666 • Industrial Relations and Labour Laws

industrial conflicts'. Further, it was not in conformity with social justice, inasmuch as there
being no statutory protection available to the workmen. Indeed, the contract of service was
often so unnatural in character that it would be described as mere manifestation of subdued
wish of the workmen to sustain their living at any cost. An agreement of this nature was
an agreement between two unequals, namely, those who invested their labour and toil,
flesh and blood and those who brought in capital. 6 Moreover/ this was incompatible with
the principles of collective bargaining and rendered their effectiveness difficult, if not
impossible. The Statement of Objects and Reasons states that, 'experience has shown that
standing orders defining the conditions of recruitment, discharge, disciplinary action,
holidays, leave, etc., go a long way towards minimizing friction between the management
and workers in industrial undertakings'. In order to overcome this difficulty and achieve
harmony and peace, the Industrial Employment (Standing Orders) Act, 1946 was enacted
requiring the management to define with sufficient precision and clarity the conditions of
employment under which the workmen were working in their establishments. Thus, the
preamble makes it expedient to define the conditions of employment under them and to
make the said conditions known to the workmen employed by them.
Each industrial undertaking in the private sector enjoys the power to offer conditions
of service to its employees as deemed just and proper by it. This has resulted in different
industrial undertakings operating in the same industry often offering different conditions
of service to the employees and this has resulted in unnecessary irritation and bitterness
amongst the employees serving in the same industry. The Act was enacted to curb the
powers of the employer to offer such conditions of service as would result in exploitation
and bring about uniformity in conditions of service amongst employees working in
different industrial establishments in the same industry. The Act imposes an obligation
on the employer to explain and state the terms and conditions of service before a person
accepts the employment. 8 The Act seeks to define the terms and conditions of employment
of all categories of employees who discharge the same or similar work in an industrial
establishment9 and to make those terms and conditions widely known to all workmen before
they could be asked to express their willingness to accept the employment. 10 The Act also
aimed at achieving a transition from mere contract between unequals to the conferment
of 'status' on workmen through conditions statutorily imposed upon the employers by
requiring every industrial establishment to frame' standing orders' in respect of the matters
enumerated in the Schedule appended to the Act. This would result in employees securing
clear and unambiguous conditions of their employment so as to avoid any confusion in
the minds of the employer and employees of their rights and obligations concerning the
terms and conditions of employment and thereby avoid unnecessary industrial disputes.
Industrial Employment (Standing Orders), 1946 is an Act specially designed to define
the terms of employment of workmen in industrial establishments, to give the workmen
collective voice in defining the terms of employment and to subject the terms of employment
to the scrutiny of quasi-judicial authorities by the application of the test of fairness and

6 Uptron India Ltd v. Shammi Bhan, (1998) LLR 385.

7 Ibid.
8 Salem Erode Electricity Distribution Co. (Pvt.) Ltd v. Employees Union, (1966) 1 LLJ 443 (SC). See also
Bharat Petroleum Corporation Ltd v. Maharashtra General Kamgar Union, (1999) LLR 180: (1999) Lab.
IC430 (SC).
9 Rohtak and Hissar Electric Supply Co. v. State of UP, AIR (1966) SC 1471.
10 Uptron India Ltd v. Workers Union; AIR (1969) SC 513 at 26.
 Contextual Frame-work of the Industrial Employment (Standing Orders)Act, 1946 • 667

reasonableness. 11 It is an Act giving recognition and form to hard-won and precious rights
of workmen. 12
The Act, in its original form was, 'designed only for the purpose of ensuring that
conditions of service, which the employer laid down, became known to the workmen. 113
However, the liberty of the employer in prescribing the conditions of service was only
limited to the extent that the standing orders had to be in conformity with the provisions of
the Act and as far as practicable, in conformity with Model Standing Orders. The certifying
officer or the appellant authority were debarred from adjudicating upon the fairness or the
reasonableness of the provisions of the standing orders. 14 To meet this deficiency, in 1956,
Parliament widened the scope of the Act. It now casts a duty upon the certifying officer 'to
adjudicate upon the fairness or reasonableness of the draft standing orders. 115

Constitutional Validity of Automatic Termination of Service

under Standing Orders
In D K Yadav v. JM A Industries Ltd. 16, the Supreme Court held that the principles of natural
justice are mandates of Articles 14 and 21. In view of this, the Court ruled that the principles of
natural justice must be read wherever the standing orders provide for automatic termination
of service for absence without leave.
In Sudhir Chandra Sarkar v. TISCO 17 too, it was held that certified standing orders would
be subject to the test of arbitrariness under Article 14 of the Constitution.
In Hindustan Paper Corpn. v. Purnendu Chkrobarty18, an employee absented from duty
without prior sanction for about 6 months by sending applications for leave on medical
ground but not supporting them with medical certificates. On these facts, the Supreme Court
held that it would be deemed that the employee had lost the lien on the job when he had
failed to avail the opportunity by replying in half-hearted way and not reporting for duty.
In Punjab and Sind Bank v. Sakattar Singh 19 , it has been held that the termination of a
bank employee absenting for 190 days without holding an inquiry will not be violative of
principles of natural justice.
In Syndicate Bank v. The General Secretary, Syndicate Bank Staff Association. 20 , the
termination of a bank employee without holding of inquiry who absented for 582 days in
a span of 628 days was held to be justified when the management had complied with the
bipartite settlement.

11 S S Rly. Co. v. Workers Union; AIR (1969) SC 513.

12 Ibid.
13 Section 4.
14 See, supra note.
15 Ibid.
16 (1993) 3 sec 259_
17 (1984) 2 LLJ 223 (SC); AIR 1984 SC 1064.
IS 1997 2 LLN 1007 (SC).
19 2001 LLR 155 (SC).
20 2000 LLR 689.
Scope and Coverage
of the Industrial
Employment
(Standing Orders)
Act, 1946 24
A. Industrial Establishments Covered
The Act applies to every industrial establishment wherein 100 or more workmen are
employed, or were employed on any day of the preceding 12 months. 1 Several states have
extended the application of the Act to establishments employing 50 or more persons. The
(Second) National Commission on Labour has recommended that establishments employing
20 or more workers should have standing orders or regulations. There is no need to delimit the
issues on which standing orders can or need be framed. As long as the two parties agree, all
manner of things including multi-skilling, production, job enrichment, productivity, and so on
can also be added. These standing orders will be prepared by the employer(s) in consultation
with the recognized unions/federations/centres depending upon the coverage, and where
there is any disagreement between the parties, the disputed matter will be determined by
the certifying authority having jurisdiction, to which either of the parties may apply. Any
amendment to the standing orders can be asked for by either party and agreed to by both
parties or referred to the certifying authority or the labour court for determination. However,
no demand for amendment can be made until at least a year has elapsed. The appropriate
government may prescribe a separate model standing order for units employing less than
50 workers. We append a draft of model standing orders for such small establishments.
The employer will have to append a copy of model standing orders or the standing orders,
mutually agreed upon with the workers, to the appoinhnent letter of every employee.
The problem connected with the aforesaid provision is whether the fall in the number
of workmen below 100 at any time would make the Act inapplicable. The division bench of
the Bombay High Court in Balakrishna Pillai v. Anant Engineering Works Pvt. Ltd2 answered
it in negative. The Court gave three reasons in support of its conclusion: First, the provision
of Section 1 (3) 'related to initial application of the Act as the condition precedent viz.,

1 Section 1 (3).
2 Balakrishna Pillai v. Anant Engineering Works Pvt. Ltd, (1975) 2 LLJ 391.
670 • Industrial Relations and Labour Laws

the number of workmen.' 3 'There was nothing in the provisions of the Act providing for
cessation or discontinuance of the application of the Act to an establishment on account
of fall in the number of workmen or on any other account.,4 Second, 'the Act is a beneficial
social legislation enacted for the purpose of defining with certainty the terms of contract of
employment and thus guaranteeing the workmen their conditions of service.'5 Finally, 'an
interpretation which promotes the objects and purposes of the Act will have to be preferred
to one which will only defeat the same.'
(i) an industrial establishment6 as defined in clause (ii) of Section 2 of the
Payment of Wages Act, 1936; or
(ii) a factory 7 as defined in clause (m) of Section 2 of the Factories Act, 1948 or

3 Id. at 394.
4 Ibid.
5 Id. at 395.
6 Section 2 (ii) of the Payment of Wages Act defines 'industrial or other establishment' to mean any:
(i) tramway service, or motor transport service engaged in carrying passengers or goods or both
by road for hire or reward;
(ii) air transport service, other than such service belonging to or exclusively employed in the military,
naval or air forces of the Union or civil aviation department of the Government of India;
(iii) dock wharf or jetty;
(iv) inland vessel, mechanically propelled;
(v) mine, quarry or oilfield;
(vi) plantation;
(vii) workshop or other establishment in which articles are produced, adapted or manufactured,
with a view to their use, to transport and sale;
(viii) establishment in which any work relating to construction, development or maintenance of
building, roads, bridges or canals, or relating to operations connected with navigation, irrigation
or supply of water or relating to generation, transmission and distribution of electricity or any
other form of power, is being carried on.
7 Section 2 (m) of the Factories Act defines 'factory' to mean 'any premises' including the precincts
thereof:
(i) whereon 10 or more workers are working or were working on any day of the preceding 12
months, and in any part of which a manufacturing process is being carried on with the aid of
power, or is ordinarily so carried on, or
(ii) whereon 20 or more workers are, working, or were working on any day of the preceding 12
months, and in any part of which a manufacturing process is being carried on without the aid
of power, or is ordinarily so carried on but does not include a mine, subject to the running shed
or hotel, restaurant or eating place.
A delineation of the above statutory definition of 'factory' requires that a factory must have
premises (including the precincts) where 'manufacturing process' is being carried on. The word
premises is defined in Murray's Oxford Dictionary as a 'house or building with its ground or other
appurtenancy.' According to the ordinary use of this expression, when speaking of a concern like a
factory, 'premises' will include all the buildings of a factory, together with the compound in which
they stand. A 'precinct' is defined in the same dictionary as 'the space enclosed by the walls or
other boundaries of a particular place, or building' and more vaguely, the space lying immediately
around a place, without distinct reference to any enclosure.' (1) The expression 'manufacturing
process' has been defined in Section 2 (k) to mean any process for -
(i) making, altering, repairing, ornamenting, finishing, packing, oiling, washing, cleaning, breaking
tip, demolishing, or otherwise treating or adapting any article or substance with a view to its
use, sale, transport delivery, or disposal; or (Contd ... )
 Scope and Coverage of the Industrial Employment (Standing Orders) Act, 1946 • 671

(iiz)a railway as defined in clause (4) of Section 2 of the Railways Act, 1890, or
(iv)the establishment of a person who, for the purpose of fulfilling a contract
with the owner of any industrial establishment, employs workmen.
The scope of the aforesaid definition has been delineated in a number of decided
cases. Conflicting views have, however, been expressed on the issue whether 'industrial
establishment' covers state electricity boards. While the Allahabad and Patna High Courts
included8 the same; the Madras High Court excluded it.9 The Supreme Court10 has, however,
approved the view of Allahabad and Patna High Courts. Further, Employees' State Insurance
Corporation has been excluded by the aforesaid definition, therefore, the provisions of
IESOA do not apply to them.11 Decisions12 also indicate that the standing orders famed in
an industrial establishment by an electrical undertaking do not cease to be operative on
the purchase of the undertaking by the board or enframing the regulation under Section 79
of the Electricity Supply Act, 1948. Courts have also held that the definition of 'industrial
establishment' under IESOA having been incorporated from the definition of that term in
the Payment of Wages Act, 1936, the position of the latter Act at the time of the enacbnent
of 1946-legislation above would be material and any other or subsequent addition or
amendment to the 1936-Act would be of no avail. 13
The appropriate government is empowered to extend the provisions of the Act to an
industrial establishment employing less than 100 workmen by giving 2 months' notice and
issuing notification in the official gazette and specifying the number in the notification. 14

B. Establishments Excluded
The Act is, however, not applicable to:
(i) any industry to which the provisions of Chapter VII of the Bombay Industrial Relation
Act, 1946 apply; or
(iz) any industrial establishmentto which the provisions of the Madhya Pradesh Industrial
Employment (Standing Orders) Act, 1961 apply:

(ii) pumping oil, water or sewage; or,

(iii) generating, transforming or transmitting power; or,
(iv) composing types for printing, printing by letter press, lithography, photogravure or other
similar process or book binding; or,
(v) constructing, reconstructing, repairing, refitting, finishing or breaking up ships or vessels.
The other ingredient of the definition of 'factory' is regarding the workers employed therein. The
definition requires that there must be 10 or more persons working with the aid of 'power' or 20 or
more persons working without the aid of power. The word 'power' is defined in Section 2(g) to
mean 'electrical energy or any other form of energy which is mechanically transmitted and is not
generated by human or animal agency.'
8 Sindri Fertilizer and Chemical Ltd v. Labour Commissioner, AIR 1959 Pat. 36; Hari Shankar Jain v. Executive
Engineer, Rural Electrification Division, Etah, (1977) 2 LLJ 429 (Allahabad).
9 Coimbatore Municipality v. Triruvenkataswami, (1973) 1 LLJ 82 (Madras).
10 See U P State Electricity Board v. Hari Shankar Jain, (1978) 4 SCC 16.
11 C L Kannan v. ESL Corporation, AIR 1968 Mad. 280.
12 See Hari Shankar Jain v. Executive Engineer, Rural Electrification Division (1977) 2 LLJ 429 (Allahabad),
see also UP State Electricity Board v. Hari Shankar Jain, op. cit., supra note 10.
13 Valsad Jilla Sahkor Bank Ltd v. DK Patil, 1991 Lab. IC 655.
14 Proviso to Section 1 (3); see also, Shitla Prasad v. State of UP, (1986) Lab. IC 2025.
672 • Industrial Relations and Labour Laws

Provided that notwithstanding anything contained in the Madhya Pradesh Industrial

Employment (Standing Orders) Act, 1961 ... the provisions of this Act shall apply to
all industrial establishments under the control of the Central Government. 15

C. Exempted Establishments
Section 1 (4) of the IESOA provides:

Nothing in this Act shall apply to an industrial establishment in so far as

the workmen employed therein are persons to whom the Fundamental and
Supplementary Rules, Civil Services (Classification, Control and Appeal)
Rules, Civil Services (Temporary Service) Rules, Revised Leave Rules, Civil
Service Regulations, Civilian in Defence Service (Classification, Control and
Appeal Rules or the Indian Railways Establishment Code of any other rules or
regulation16 that may be notified in this behalf by the appropriate government
in the official gazette, apply.
The opening words of Section 13-B namely 'nothing in the Act shall apply' have
been interpreted by the Supreme Court in UP State Electricity Board v. Hari Shankar Jain 17 to
exclude the applicability of the Act to the extent to which the rule or regulation covers the
field. According to the Court, to give any other construction would lead to injustice and
would once again place workmen at the mercy of the employer to be so benign and would
promote industrial strife. The view is in conformity with the Directive Principles of State
Policy enshrined in Articles 42 and 43 of the Constitution. Further, the expression 'workmen
... to whom ... any other rules or regulations that may be notified in this behalf' occurring
in Section 13-B means 'workmen enjoying of rules or regulation.' The expression cannot
be construed so narrowly as to mean government servants only; nor can it be construed so
broadly to mean workmen employed by whomsoever including private employers, so long
their conditions of service are notified by the government under Section 13-B. The mere
fact that the electricity board had adopted the rules and regulations of the government of
Madras as its transitory rules and regulations did not bring the workmen employed in
industrial establishments under the board within the mischief of Section 13 B of the IESA. 18

D. Government's Power to Exempt

The appropriate government is empowered to exempt conditionally or unconditionally
(z) any industrial establishment, or (ii) class of establishments from all or any of the provisions
of the Act. This should be done by notification in the official gazette. 19 In exercise of this
power, the following industrial establishments in central sphere have been exempted from
the provisions of the Act as on 31 December 1978:
1. All major ports of Bombay, Calcutta, Madras, Cochin, Vishakapatnam and Kandala
including their own railways;

15 Section 1 (4).
16 Section 13 B.
17 (1978) 4 SCC 16; see also Shitla Prasad v. State of UP, 1986 Lab. IC 2025.
18 See Roman Nambissan v. State Electricity Board, (1967) 1 LLJ 252 (Madras).
19 Section 14.
 Scope and Coverage of the Industrial Employment (standing Orders) Act, 1946 • 673

2. Government of India presses (excluding security presses);

3. Training establishments in connection with the re-settlement training schemes in
vocational training centres under the control of the directorate general of employment
and training;
4. Map production and printing offices known as Hathibarkala Litho Office and Photolitho
Office, Dehradun and Photolitho Office at Calcutta;
5. Delhi Road Transport Authority;
6. Mechanical workshop at Hirakund;
7. Industrial establishments of the zonal railways including the Integral Coach Factory,
Perambur and Chittranjan Locomotive Works.
8. The Indian Veterinary Research Institute, lzatnagar /Mukteshwar. 20
9. Industrial establishment owned by the Port Trust Authority administering the port at
Paradip.
An analysis of the aforesaid provisions reveals that the coverage of the Act is inadequate
and needs to be broadened. In this connection, it is relevant to note that Section 72 of the
Industrial Relations Bill, 1978 inter alia, provided:
The provisions of this Chapter shall not apply to any industrial establishments or
undertaking to:
(a) which ordinarily employs less than 50 employees; or
(b) which, during the period of 12 months immediately preceding the commencement of
this Act, ordinarily employed less than 50 employees.
The Bill could have provided relief to workers not covered under the IESOA, but as
stated earlier, the Bill could not find the colour of the Act and so it lapsed.

Section 2 (i) of the Industrial Employment (Standing Orders) Amendment Act, 1982 provides
that the 'workman' has the meaning assigned to it in clause (s) of Section 2 of the Industrial
Disputes Act, 1947.

Section 2 (d) of the IESOA defined 'employer' to mean:

The owner of an industrial establishment to which this Act for the time being applies,
and includes:
(i) in a factory, any person named under clause (f) of sub-section (1) of Section 7 of the
Factories Act, 1948 (Act 63 of 1948), as manager of the factory.
(iz) in any industrial establishment under the control of any deparbnent of any government
in India, the authority appointed by such government in this behalf, or where no
authority is so appointed, the head of the deparbnent;

20 See Government oflndia, Indian Labour Year Book (1979), 310 (1982).
674 • Industrial Relations and Labour Laws

(iii) in any other establishment, any person responsible to the owner for the supervision and
control of the industrial establishment. InHari Shankar Jain v. Executive Engineer, Rural
Electricity Division21 , the Allahabad High Court held that the employer would include
the state electricity board since it was the owner of the industrial establishment by virtue
of its compulsory purchase. It also held that unless there was any other provision to
the contrary, even the state government, if it happened to be the owner of an industrial
establishment,22 would fall within the ambit of the definition of 'employer.'

21 Hari Shankar Jain v. Executive Engineer Rural Electricity Division, (1977) 2 LLJ 429 (Allahabad).
22 Id. at 433.
Concept and Nature
of Standing Orders 25
A. The Definition
Section 2 (g) of the Industrial Employment (Standing Orders) Act, 1946 (hereinafter referred
to as IESOA) defines 'standing orders' to mean:

Rules relating to matters set out in the Schedule

Thus, the items which have to be covered by the standing orders in respect of which the
employer has to make a draft for submission to the certifying officers are matters specified
in the schedule.

B. Content of the Schedule

The matters referred to in the Schedule are:
1. Classification of workmen, e.g., whether permanent, temporary, apprentices,
probationers, or badlis
2. Manner of intimating to workmen periods and hours of work, holidays, pay-days and
wage rates
3. Shift working
4. Attendance and late coming
5. Conditions of procedure in applying for, and the authority which may grant leave
and holidays
6. Requirements to enter premises by certain gates and liability to search
7. Closing and re-opening of sections of the industrial establishment, and temporary
stoppages of work and the rights and liabilities of the employer and workmen arising
therefrom
8. Termination of employment, and the notice thereof to be given by employer and
workmen
676 • Industrial Relations and Labour Laws

9.Suspension or dismissal for misconduct, and acts or omissions which constitute

misconduct
10. Means of redress for workmen against unfair treabnent or wrongful exactions by the
employer or his agents or servants
11. Any other matter which may be prescribed
The enumeration of the aforesaid items is not exhaustive. There seems to be no reason
for including certain items and excluding many other important items. If the object of the
IESOA is to' give the workmen collective voice in defining the terms of employment and to
subject the terms of employment to scrutiny of quasi-judicial and judicial authorities', there
is no reason to exclude many items from terms of employment and conditions of service. It
is significant to note that Section 73 (1) of the Industrial Relation Bill, 1978 provided:
(i) The Central Government shall, by notification, make standing orders to provide for
the following matters, namely:
(a) Classification of employees, that is to say: whether permanent, temporary,
apprentice, probationers or badlis
(b) Conditions of service of employees, including matters relating to the issue of orders
of appoinbnent of employees, procedure to be followed by employees in applying
for, and the authority which may grant leave and holidays
(c) Misconduct of employees, inquiry into such misconduct and punishment therefor
(d) Superannuation of employees
(e) Shift working of employees
The aforesaid provisions could have given great relief to workmen but it lapsed
after the dissolution of the Parliament.
Quite apart from the aforesaid shortcomings, the matters enumerated in the Schedule
have also been the subject-matter of judicial interpretation in a number of decided cases.
Some of the items which invited the attention of the Court may be noted:
Item 5. In Bagalakot Cement Co. v. R K Pathan1, the Supreme Court has interpreted
'condition' in clause 5 of the Schedule 'in a broad and liberal sense'2 so as to include leave
and holidays3• In its view, 'to hold otherwise would defeat the very purpose of clause 5'.4
Item 8. Prior to the Supreme Court decision in U P Electricity Supply Co. v.
T N Chatterjee5, the Madras and Orissa High Courts were divided on the issue whether the
word 'termination' in Item 8 included 'termination of employment on attainment of age
of superannuation'. Thus, in the Hindu v. Secretary, Hindu Office6, the management of the
Hindu had framed certain standing orders, one of the clauses of which provided that every
employee shall ordinarily retire from service after completing the age of 58 years or 30
years of unbroken service, whichever is earlier. A question arose whether such a clause in
standing orders is covered by any of the items of the Schedule of the Act. The Madras High
Court held that termination in Item 8 of the Schedule was wide enough to govern the case

1 Bagalkot Cement Co. v. R K Pathan, AIR 1963 SC 439.

2 Id. at p 443.
3 Ibid.
4 Ibid.
5 UP Electricity Supply Co. v. T N Chatterjee, AIR 1972 SC 1201.
6 The Hindu v. Secretary, Hindu Office, AIR 1961 Madras 107.
 Concept and Nature of Standing Orders • 677

of superannuation. But in Saroj Kumar v. Chairman, Orissa State Electricity Board7, the Court
took the contrary view. It held that 'superannuation' was covered by 'termination' in the
Item. However, the controversy has been set at rest by the Supreme Court in UP Electricity
Supply Co. v. Chatterjee. 8 It related to retirement of certain employees on completion of the
age of 55 years or 30 years of service. A question arose whether termination in Item 8 covered
'superannuation'. The Court held that termination in Item 8 does not cover each and every
form of termination or cessation of employment. In view of this it held that it did not cover
'superannuation' which is automatic and did not require notice or any act on the part of
employer or workmen. The Court agreed that if termination is to be read in a wider sense
as meaning employment coming to an end, there was no necessity to have Item 9 because
dismissal would then be covered by termination. 9
Item 9. The 'misconduct' under Item 9 for which an employee can be dismissed need
not necessarily have been committed in the course of his employment. It is enough if it is
of such a nature as to affect his suitability for a particular employment. 10
Item 11. This item refers to 'any other matter which may be prescribed.' When the
appropriate government adds any item to the Schedule, the relevant question to be asked
would be whether it refers to the conditions of employment or not. If it does, it would be
within the competence of the appropriate government to add such an item.11

The nature of the standing order has assumed increasing importance in industrial law. It has
also attracted the attention of tribunal and courts. An analysis of the decided cases relating
to the nature of standing order reveals that different shades of opinion have emerged on
the subjectnamely,itis: (i) statutory in nature, (ii) a special kind of contract, (iii) an 'award',
and (iv) a form of delegated legislation. Let us turn to examine them.

A. Statutory in Character
Prior to the Supreme Court decision, the High Courts were divided on this issue. Most of
the high courts were tilted on the side of statutory nature of contract.
In Tata Chemicals Ltd v. Kailash C Adhvaryar12, a question directly arose before the
Gujarat High Court whether a contract can override the terms of the standing orders. The
Court after considering the provisions of the Act opined that:

... on a true construction of the various provisions of the Act, the standing
orders when finally certified under the Act are binding on the employer and
the workmen and govern the relations between the employer and the workmen
and it is not open to the employer and the workmen to contract themselves
out of the rights and obligations created by the standing orders. 13

7 Saroj Kumar v. Chairman, Orissa State Electricity Board, AIR 1970 Orissa 126.
8 AIR 1972 SC 1201.
9 Id. at 1208.
10 New Victoria Mills v. Labour Court, AIR 1970 Alld. 210,213.
11 See, Rohtak & Hissar District Electric Supply Co. Ltd v. State of UP, AIR 1966 SC 1471-1477.
12 Tata Chemicals Ltd v. Kailash C Adhvaryar, (1965) 1 LLJ 54 (Gujarat).
13 Id. at 65.
678 • Industrial Relations and Labour Laws

In Behar Journals Ltd v. Ali Hasan 14, the division bench of the Patna High Court also
spoke in similar terms:

... the certified standing orders have statutory force and under the above
standing orders, there is a statutory contract between the employer and the
workmen. It could not, therefore, be possible in law for parties ... to enter
into a contract overriding the statutory contract as embodied in the certified
standing orders and any contract contrary to the above orders must be
ignored. 15
The aforesaid line of view found the approval of the Supreme Court in Bagalkot Cement
Company Ltd v. R K Pathan 16• In this case, even though the question was not directly in issue,
the Court dealt with the nature of standing orders in the following words:

The Act made relevant provision for making standing orders which, after
they are certified, constitute the statutory terms of employment between the
industrial establishments in question and their employees17 •
And while interpreting certain provisions of the standing orders, Justice Gajendragadkar
observed:

The object of the Act ... was to require the employers to make the conditions
of employment precise and definite. The Act ultimately intended to prescribe
these conditions in the form of standing orders so that what used to be governed
by a contract hereto before, would now be governed by the statutory standing
orders ...18
The aforesaid view was reiterated by the Supreme Court in Workmen of Dewan Tea Estate
v. Their Management. 19 In this case, a question arose whether any provision of the Act could
have overridden the provisions of the standing orders. The Court held that the standing
orders could only be overridden by specific provisions of the Act, which may have been
introduced after the standing order was certified. In the course of judgement, the Supreme
Court explained the nature of the standing orders in the following words:

If the standing orders thus become the part of the statutory terms and
conditions of service, they will govern the relations between the parties
unless, of course, it can be shown that any provision of the Act is inconsistent
with the said standing orders. In that case, it may be permissible to urge that
the statutory provision contained in the Act should override the standing
order which had been certified before the said statutory provision was
enacted.20

14 Behar Journals Ltd v. Ali Hasan, AIR 1959 Pat. 431.

15 Id. at 433.
16 Bagalkot Cement Company Ltd v. R K Pathan, (1962} 1 LLJ 203.
17 Bagalkot Cement Company Ltd v. R K Pathan (1962) 1 LLJ 203 (SC).
18 Id. at 208.
19 Workmen of Dewan Tea Estate v. Their Management, AIR 1964 SC 1458.
20 Id. at 2652.
 Concept and Nature of Standing Orders • 679

In Western India Match Co. v. Workmen 21 , the Court spoke in similar terms:

The terms of employment specified in the standing orders would prevail

over the corresponding terms in the contract of service in existence on the
enforcement of the standing orders.22
The Supreme Court in Sudhir Chandra Sarkar v. Tata Iron and Steel Company23 has clearly
stated that the conditions of service laid down in the standing orders is either statutory in
character or has statutory flavour. Similarly, certified standing orders which statutorily prescribe
the conditions of service shall be deemed to be incorporated in the contract of emplo7ment of
each employee with his employer. This line of view was followed in later decisions.2
In UP State Bridge Corporation Ltd v. UP Rajya Setu Nigam S Karmchari Sangh 25, the
Supreme Court held that certified standing orders constitute statutory terms and conditions
of service.
A survey of the aforesaid decisions leads to the conclusion that the standing orders
are statutory in nature and their violation is punishable under the Industrial Employment
(Standing Orders) Act, 1946.
In Rajasthan State Road Transport Corporation v. Krishna Kant2 6, the Supreme Court held:

The certified standing orders framed under and in accordance with the
Industrial Employment (Standing Orders) Act. 1946 are statutorily imposed
conditions of service and are binding both upon the employers and employees,
though they do not amount to statutory provision. Any violation of these
standing orders entitles an employee to appropriate relief either before the
forums created by the Industrial Disputes Act or the civil court where recourse
to civil court is open according to the principles indicated herein.
The aforesaid view was reiterated in RSRTC v. Deen Dayal Sharma 27•

21 Western India Match Co. Workmen, AIR 1973 SC 2650.

22 Id. at 2652.
23 Sudhir Chandra Sarkar v. Tata Iron and Steel Company, (1984) 2 LLJ 223 (SC).
24 The full bench of the Allahabad High Court in Srivastava (S P) v. Banaras Electric Light & Power Co.
Ltd, (1968) 2 LLJ 483, took the view that standing orders would prevail over the terms of contract
of service because:
The intention of the legislature in providing for statutory standing orders and laying down the only
mode in which they could be modified and attaching penal consequences to violations of standing
orders was necessarily to prohibit terms of contract which clash with any of the standing orders.
Any terms of a contract which contravene a standing order would be struck by Section 23 of the
Contract Act also. This provision invalidates an agreement the object of which is, inter alia, 'of such
a nature, that if permitted, it would defeat the provisions of any law.'
In Biswanath Das v. Ramesh Chandra Patnaik (1979) 1 LLJ 129, 132 (Orissa); one of the questions
for consideration before the Court was whether the standing orders framed under the Industrial
Employment (Standing Orders) Act, 1946 have statutory force? The Court answered it in affirmative
and observed:
The employer cannot enter into any agreement with a workman which is inconsistent with the
standing orders. The violation of standing orders by the employer is a criminal offence.
25 (2004) 4 sec 268.
26 (1995) 5 SSC 75.
27 2010 (5) SCALE 1.
680 • Industrial Relations and Labour Laws

B. A Special Kind of Contract

The other view is that standing orders are a special kind of contract. This view was expressed
in Buckingham and Carnatic Co. v. Venkatayaga. 28 Observed Justice Gajendragadkar:

The certified standing orders represent the relevant terms and conditions of
service in a statutory form and they are binding on the parties at least as much,
if not more, as private contract embodying similar terms and conditions of
service.29
However, the high courts were more specific on the holding that the standin~ orders are
in the nature of contract. Thus, Madras High Court in Mettur Industries v. Verma 3 observed:

Reading the Act as a whole, it is clear that the standing orders form riart of the
contract between the management and every one of its employees. 1
Likewise, in Akhil Ranjan Das Gupta v. Assam Tribune3 2, Chief Justice Mehrotra speaking
for the Assam High Court observed:

the purpose of standing orders is to clarify the conditions of service and they
are in the nature of a contract on which openly the employee enters into the
•
service ... 33
Thus, it is evident that 'though the certified standing orders have statutori flavour 34,
the Act is directed to get the rights of an employee under a contract defined'. 5 This was
also recognized by the Supreme Court in Guest Keen Williams Ltd v. Sterling and Others: 36

The standing orders certified under the Act no doubt become part of the terms of
employment by operation of Section 7, but if an industrial dispute arises in respect
of such (standing) orders and it is referred to the tribunal by the appropriate
government, the tribunal has jurisdiction to deal with it on the merits. 37
InM P Vidyut Karmchari Sangh v. M P Electricity Board38, the question was whether the
regulations made under Section 79 (c) of the Electricity (Supply) Act, 1948 would prevail
over the standing orders framed under the Act of 1961. The Supreme Court held that, 'for
excluding the operation of the 1961 Act, it is imperative that an appropriate notification in
terms of Section 2(2) of the 1961 Act is issued'. It has been further observed that the 1961
Act is a special law whereas the regulations framed by the board under Section 79(c) are

28 Buckingham and Carnatic Co. v. Venkatayaga, AIR (1964} SC 1272.

29 Id. at 1275.
30 Mettur Industries v. Verma, (1958) 2 LLJ 326.
31 (1958) 2 LLJ 326 at 330.
32 Akhil Ranjan Das Gupta v. State af Assam, (1965) 2 LLJ 614.
33 Id. at 618.
34 Yogendra Singh, 'Nature of Standing Orders under the Industrial Employment (Standing Orders)
Act, 1946', 9 July (1967) 443,451.
35 C P Transport Services Ltd v. R G Patwardhan. (1957) 1 LLJ 27 (SC}.
36 Guest Keen Williams Ltd v. Sterling and Others, (1959) 2 LLJ 405.
37 Id. at 411.
38 (2004) 9 sec 755: (2004) 2 LLJ 470.
 Concept and Nature of Standing Orders • 6 81

general provisions. The maxim 'generalia special bus non derogant' would, thus be applicable
in this case.
Following the aforesaid decision in Jabalpur Development Authority v. Sharad Shrivastava39,
the Madhya Pradesh High Court held that SSOs will prevail over the Regulations of 1987
as these rules have not been notified under Section 2(2) of the Act of 1961. The publication
of the rules in the gazette is not enough. These are required to be notified under Section
2(2) of the Act involving a conscious decision of the government in the labour deparbnent
that the operation of the SSOs would be excluded and the rules would have predominance.
From the above, it appears that the standing orders may also be of the nature of special
contract law.

C. Standing Orders: If 'Award'

It is sometimes said that the nature of standing orders is like an' award'. This is argued on
the basis of the provisions of Section 4 (b) which says that 'It shall be the function of the
certifying officer ... to adjudicate upon the fairness and reasonableness of the provisions of
any standing orders' and also on the basis of judicial decision40 which rules that the function
of the certifying officer is quasi-judicial. However, standing orders cannot be an 'award'
under Section 2 (b) 41 of the Industrial Disputes Act, 1947.42

D. Standing Orders: If Form of Delegated Legislation

Sometimes, it is also argued that standing orders under IESOA is a delegated legislation.
It is argued on the basis of the provision that standing orders should contain every matter
set out in the Schedule and it should as far as is practicable, conform to the Model Standing
Orders. But, this contention cannot be upheld, particularly when the Act imposes a duty
upon the employers to submit the draft standing orders to the certifying officer and that he
is required to examine the fairness and reasonableness of the standing orders and is also
empowered to amend the same if they are not 'fair or reasonable'. These provisions do
not conform that it is a delegated legislation. However, the Industrial Relations Bill, 1978
appears to have changed the nature of standing orders from statutory or contractual to one
of delegated legislation which is evident from the provisions of Section 73 (1) and Section
73(2) of the Bill namely:

The provisions of standing orders made under sub-section (1) may be modified
by the employer, in relation to any industrial establishment or undertaking,
if an agreement is entered into by him with the negotiating agent in relation
to employees in such industrial establishment or undertaking for such
modification ...
Further, provisions of Section 76 of the Bill which provides that:

39 (2005) 1 LLJ 305.

40 See Indian Air Gases Mazdoor Sangh v. Indian Air Gases Ltd, (1977) 2 LLJ 503, 505. (Allahabad).
41 Section 2 (b) of the Industrial Disputes Act, 1947 defines 'award' to mean: 'an interim or final
determination of any industrial dispute or any question relating thereto by any labour court,
industrial tribunal or national industrial tribunal and includes an arbitration award made under
section lOA'.
42 See supra note 31.
682 • Industrial Relations and Labour Laws

Every standing orders made by the Central Government under sub-section

(1) of Section 73 shall be laid, as soon as, may be after it is made, before each
house of Parliament.
Further confirms that standing orders are in the nature of delegated legislation.
Needless to mention that the Bill lapsed after the dissolution of Lok Sabha.
In RSRTC v. Deen Dayal Sharma43, the Supreme Court held that standing orders are
not in the nature of delegated/subordinate legislation.

43 2010 (5) SCALE 45.

Certification Process-
Its Operation and
Binding Effect 26
The Industrial Employment (Standing Orders) Act (hereinafter referred to as IESOA)
requires every employer of an 'industrial establishment' to submit draft standing orders,
i.e., 'rules relating to matters set out in the Schedule' proposed by him for adoption in
his industrial establishment. 1 Such a draft should be submitted within 6 months of the
commencement of the Act to the certifying officer. Failure to do so is punishable and is
further made a continuing offence.2 The draft standing orders must be accompanied by
particulars of workmen employed in the establishment as also the name of the trade union,
if any, to which they belong. 3 If the industrial establishments are of similar nature, the
group of employers owning those industrial establishments may submit a joint draft of
standing orders. 4

Section 4 requires that standing orders shall be certified under the Act if:
(a) provision is made therein for every matter set out in the Schedule which is applicable
to the industrial establishment;
(b) they are otherwise in conformity with the provision of the Act; and
(c) they are fair and reasonable.
Since the aforesaid conditions formed the nucleus of valid standing orders, it is
necessary to examine them in the light of decided cases.

1 Section 3 (1).
2 See UP State Electricity Board v. Hari Shankar, (1978) 4 SCC 16.
3 Section 3 (3).
4 Section (4).
684 • Industrial Relations and Labour Laws

A. Matters to be Set out in the Schedule

The draft standing orders should contain every matter set out in the schedule of the Act'
with the additional matters prescribed by the government6 as are applicable to the industrial
establishment. And, according to Section 4, the standing orders shall be certifiable if
provisions are made therein for every matter stated in the Schedule to the Act.

B. Matters not Covered by the Schedule

The Schedule, it has been seen earlier, contains Clauses 1 to 10 which deal with several topics
in respect of which standing orders have to make provision and Clause 11 refers to any other
matter which may be prescribed. These items are not exhaustive and do not contain items
on several subjects. The question then arises: whether it is permissible for the employers to
frame standing orders in respect of the matters not provided in the Schedule of the Act?
The Supreme Court in UP Electric Supply Co. Ltd v. TN Chatterjee7 left the question
open when it observed that it was unnecessary to decide the question as to whether in the
absence of any item in the Schedule, any standing orders could be framed in respect of
the matter which may be certified by the certifying officer, as fair and reasonable. On the
other hand, the Supreme Court in Rohtak and Hissar Electric Supply Co. v. UP 8 considered
the question squarely and observed:

Then in regard to the matter which may be covered by the standing orders,
it is not possible to accept the argument that the draft standing orders can
relate to matters outside the Schedule. Take, for instance, the case of some
of the draft standing orders which the appellant wanted to introduce; these
had reference to the liability of the employees for transfer from one branch
to another and from one job to another at the discretion of the management.
These two standing orders were included in the draft of the appellant. These
two provisions do not appear to fall under any of the items in the Schedule;
and so, the certifying authorities were quite justified in not including them in
the certified standing orders.
and later added:

... The employer cannot insist upon adding a condition to the standing orders
which relates to a matter which is not included in the Schedule.

C. Conformity with the Provisions of the Act

In Indian Express Employees Union v. Indian Express (Madurai) Ltd9, the Kerala High Court
held that the framing of the standing orders is to be in conformity with the provisions of
the Act. The same need not be in conformity with the appoinbnent order or any office order
of the establishment.

5 Section 3 (2).
6 MKE Association v. Industrial Tribunal, AIR 1959 Mysore 235, 236.
7 UP Electric Supply Co. Ltd v. T N Chatterjee, (1972) 2 LLJ 9.
8 Rohtak and Hissar Electric Supply Co. v. State of UP, AIR 1966 SC 1471.
9 1998 Lab. IC 529 (Kerala)
 Certif cation Process-Its Operation and Binding Effect • 685

In Rashtriya Chemicals and Fertilizers Ltd v. General Secretary, FCI Workers Union 10, the
division bench of the Bombay High Court held that the word conformity means that is
should not be inconsistent. In other words, merely because the central standing orders
prescribe age of 58 years, it does not mean that automatically anything other than 58 years
is not in conformity.
In Burn Standard and Company v. I T11, the Supreme Court deprecated the practice of
correction of date of birth at the fag end of the career of an employee.

D. Conformity with the Model Standing Orders

Where model standing orders have been prescribed, that draft submitted by the employers
must be in conformity with the model standing orders provided under Section 15 (2) (b) 'as
far as it is practicable.'12 Conformity cannot be equated with identity.13 In other words, it
does not mean that the draft standing orders must be in identical words but it means that
in substance, it must conform to the model prescribed by the appropriate government. 14
The expression 'as far as is practicable' also confirms the view. 15 This expression indicates
that the appropriate authority may permit departure from the model standing order if it is
satisfied that insistence upon such conformity may be impracticable. 16 There is, however,
no provision in the Act for making more beneficial provisions of the model standing orders
applicable in cases where the certified standing orders exist.
In the absence of such a provision under Section 15 (2) (b ), a question arose whether the
standing orders can contain matters not found in the model standing orders. This issue was
raised in SK Seshadari v. HAL 17• In this case, the standing orders of Hindustan Aeronautics
Ltd, inter alia, provided the following acts and omission to be misconduct: Gambling and
money lending or doing any other private business within the company's premises'.
The validity of these provisions was challenged on the ground that the model standing
orders do not provide that the aforesaid acts would constitute misconduct. Upholding the
validity of these provisions, the Karnataka High Court observed:

[T]he mere fact that the model standing orders do not provide for constituting
particular act as misconduct, it does not mean that the standing orders cannot
include such act or acts as constituting misconduct. Sub-Section (2) of Section 3 of
the Act, merely provides that where model standing orders have been prescribed,
the standing orders shall have to be, so far as is practicable, in conformity with
such model standing orders. Model standing orders are framed in exercise of
the rule-making power. The rules cannot restrict the scope and ambit of the
provisions contained in the Act. Thus, the question as to whether the standing
orders are within the ambit of power conferred in that regard by the Act, has

10 1997 LLR 654.

11 1995 (4) SC 23.
12 Section 3 (2); see also, Associated Cement Co. v. PD Vyas, AIR 1960 SC 665.
13 KKE Association v. Industrial Tribunal, AIR 1959 Mysore, 235,236; Md. Yasin v. Industrial Tribunal,
(1975) 1 LLJ 100 (Orissa).
14 Associated Cement v. PD Vyas, AIR (1960) SC 665.
15 Supra note 5.
16 Rohtak and Hissar Electric Supply Co. v. UP, op. cit.
17 SK Seshadri v. HAL, (1983) 2 LLJ 410 at 411.
686 • Industrial Relations and Labour Laws

to be determined with reference to the provisions contained in the Act, more

especially with reference to the Schedule which forms part of the Act. Providing
for certain acts and omissions in the standing orders not already provided in the
model standing orders, does not make such a standing order invalid or beyond
the power of the employer to make such a standing order. Applicability of the
model standing orders depends upon the nature of the industrial establishment.
This view is in conformity with the object and scheme of the Industrial Employment
(Standing Orders) Act.

Model Standing Order

Under the Act, model standing orders are framed and as soon as the Act applies to an
industrial establishment. The employer is under an obligation to submit a draft amendment
to the model standing orders as desired by him but the certifying officer has to certify the
same. These model standing orders provide for minimum decent conditions of service.
The Act took the first step of compelling the employer to give certain minimum conditions
of service. These model standing orders were framed as early as 1948 and there are minor
amendments here or there. They have undoubtedly stood the test of the time. But as the
industrial employees are becoming more and more aware of their rights and concept of social
justice is taking firm root, it is time that these model standing orders are comprehensively
reexamined and revised. In the course of discussions, the committee came across certain
suggestions relating to conditions of service which may now appropriately find their place
in the model standing orders.
The model standing orders do not provide for any method or manner of recruibnent,
promotion, transfer or grievance procedure. Today, the employer enjoys an arbitrary
discretion or an unfettered power of recruiting anyone he likes. This definitely results in
favouritism, nepotism and class of loyal workers. It becomes counter-productive to healthy
trade union activity. 18
Recommendation of the Second National Commission on Labour: The commission has
recommended that the appropriate government may also frame model standing orders,
including the classification of acts of misconduct as major and minor, and providing for
graded punishments depending on the nature and gravity of the misconduct, and publish
them in the official gazette. Where an establishment has no standing orders, or where draft
standing orders are still to be finalized, the model standing orders shall apply.

E. Fairness or Reasonableness of Standing Orders

Prior to 1956, the certifying officer had no power to go into the question of reasonableness or
fairness of the draft standing orders submitted to him by the employers. His only function
was to see that the draft must incorporate all matters contained in the Schedule and that it
was otherwise certifiable under the Act. 19 Such a power was also not conferred upon the
appellate authority. However, this provision did not provide adequate safeguards against
unfair practices in the standing orders and, therefore, caused great hardship to workmen. 20

18 Government of Gujarat, Report of the Labour Laws Review Committee (1974) 63.
19 See SS Light Railway Co. Ltd v. Shadhara Saharanpur Railway Workers Union, (1969) 1 LLJ 734,740 (SC).
20 Ibid.
 Certif cation Process-Its Operation and Binding Effect • 687

In 1956, the Parliament amended the Act and thereby not only considerably widened
the scope of the Act but also gave a clear expression to the change in legislative policy. Section
4, as amended by Act 36 of 1956, imposes a duty upon the certifying officer and appellate
authority to adjudicate upon fairness and reasonableness of the standing orders.21 If they
find that some provisions are unreasonable, they must refuse to certify the same.22 While
adjudicating the fairness or reasonableness of any standing orders, the certifying officer
should consider and weigh the social interest in the claims of the employer and the social
interest in the demand of the workmen. 23
Thus, the Parliament confers the right to individual workman to contest the draft
standing orders submitted by the employer for certification on the ground that they are
either not fair or reasonable. Further, the workers can also apply for their modification and
dispute the finality of the order of the appellate authority.

When the draft standing orders are submitted for certification, the certifying officer shall send
a copy of the draft to the trade union, if any, or in its absence to the workmen concerned, to
file objections, if any, in respect of the draft standing orders, within 15 days of the receipt
of the notice. He is further required to provide hearing opportunity to the trade union or
workmen concerned as the case may be. After hearing the parties he shall decide whether
or not any modification of or addition to the daft submitted by the employer is necessary
to render the draft certifiable under the Act and shall make an order in writing accordingly.
For the purpose he shall inquire (i) whether the said sanding orders are in conformity with
the model standing orders issued by the government; and (iz) whether they are reasonable
and fair. He shall then certify the standing orders with or without modification as the case
may be. He shall send within 7 days authenticated copies of standing orders to employers
and to the trade unions or other representatives of workmen.

The 'certifying officers' under the IESOA mean a labour commission or a regional labour
commissioner, and includes any other officer appointed by the appropriate government, by
notification in the official gazette, to perform all or any of the functions of certifying officer
under the Act. 24 He is 'the statutory representative of the Society.'25
Section 11 (1) empowers certifying officer and appellate authority with all the powers
of a civil court for the purposes of: (z) receiving evidence; (iz) enforcing the attendance of
witnesses; and (iii) compelling the discovery and production of documents. He shall also
be deemed to be the 'civil court' within the meaning of Section 345 and 346 of the Code of
Criminal Procedure, 1973.

21 Ibid.
22 See A G Mazdoor Sangh v. Indian Air Gases Ltd, (1977) 2 LLJ 503 (Allahabad).
23 Western India Match Co. v. Workmen, AIR 1973 SC 2650, 2653.
24 Section 2 (c).
25 See Western India Match Co. v. Workmen, AIR 1973 SC 2650.
688 • Industrial Relations and Labour Laws

The aforesaid power have been conferred upon the certifying officer and appellate
authority so that they may summon any witness and may not find any difficulty in holding
any inquiry when the draft standing orders are submitted for certification to the certifying
officer.26
No oral evidence having the effect of adding to or otherwise varying or contradicting
standing orders finally certified under the IESOA shall be admitted in any court.27 Thus,
Section 12 bars oral evidence in contradiction of written standing orders.28 But there is no
provision prohibiting written agreement. However, in case of conflict between the general
conditions of employment and special terms contained in standing orders-a written
contract, the terms of special contract would prevail.29
Section 11 (2) authorizes certifying officer and appellate authority to correct his own
or his predecessor's (i) clerical mistake; (ii) arithmetical mistake; and (iii) error arising therin
from any accidental slip or omission.

Jurisdiction
The Supreme Court in Bhilai Steel Project v. Steel Works Union,30 held that when standing
orders are under consideration of the certifying officer and in the meanwhile if there is any
amendment to the Industrial Employment (Sanding Orders) Act, though certifying officer
had no jurisdiction at the time when he obtained the application to deal with the matter,
during pendency of the application if the law is repealed and that law is to deal with such
application, he can certainly entertain the same.
Section 4, we have already seen, imposes a duty upon the certifying officer/ appellate
authority to:
(i) see whether the standing order provides for every matter set out in the schedule, which
is applicable to the industrial establishment;
(iz) consider whether the draft standing orders are in conformity with the provisions of
the model standing orders. If the certifying officer finds that some provisions of the
standing orders as proposed by the employer relate to matters which are not included
in the schedule, he may refuse to certify them;31 and
(iii) to adjudicate upon the fairness or reasonableness of the provisions of any standing
orders.
The aforesaid duties are mandatory 32 to be performed by the certifying officer. Further,
certifying officer/appellate authority is required to discharge these duties in a fair and
quasi-judicial33 manner.

26 See Khadi Gram Udyog Sangh v. ]it Ram, (1975) 2 LLJ 413 (Punjab and Haryana).
27 Section 12.
28 J K Cotton Manufactures v. JN Tiwari, AIR 1959 Allahabad 639.
29 Ibid.
30 AIR 1964 SC 1333.
31 See Air Gases Mazdoor Sangh v. Indian Air Gases Ltd, (1977) 2 LLJ 503, 505 (Allahabad).
32 Ibid.
33 Ibid.
 Certif cation Process-Its Operation and Binding Effect • 689

A. The Legislative Scheme

Section 6 of the Industrial Employment (Standing Orders) Act, 1946, inter alia, provides that
any person who is aggrieved by the order of certifying officer may 'within30 days from the
date on which the copies are sent,' file an appeal to the appellate authority.
The scope of the aforesaid section was examined in Badarpur Power Engineers' Association
v. Dy. Chief Labour Commissioner. 34 In this case, the Delhi High Court held that:

The word used in Section 6, on which emphasis has to be laid is 'from'. Section
9 (1) of the General Clause Act clearly provides that when in any Central Act
or Regulation the word used is 'from', then the first day in a series of days
shall be excluded. Section 9 of the General Clauses Act was clearly applicable
to the present case and the effect of the same would be that 7 January, 1991
had to be excluded while computing the period of limitation.

B. Finality of the Decision of Appellate Authority

Section 6 also incorporates a finality clause namely that the decision of the appellate authority
'shall be final.' This provision means that there is no further appeal or revision against that
order. This view finds support from Section 12 which lays down that once the standing
orders are finally certified, no oral evidence can be led in any court which has the effect of
adding to or otherwise varying or contradicting such standing orders. Section 6 read with
Section 12 indicates that the finality given to the certification by the appellate authority
cannot be challenged in a civil court. But the finality given to the appellate authority order
is subject to the modification by him. 35

C. Appellate Authority: Its Nature and Constitution

Appellate authority means an authority appointed by the appropriate government by
notification in the official gazette to exercise in such areas as may be specified in the
notification of the functions of the appellate authority under the Act. But, in relation to
appeal pending before the industrial court or other authority immediately before the
commencement of the Industrial Employment (Standing Orders) Amendment Act, 1963,
that court or authority shall be deemed to be the appellate authority.
A survey of the official statistics36 regarding persons authorized to act as appellate
authority under the Act reveals that only in the state of Assam and Tripura, secretary of
labour deparbnent acts as appellate authority. In remaining states/union territories, such
power is exercises by quasi-judicial tribunals, like industrial tribunal/labour court. But,
in the state of West Bengal, such power is vested in the High Court. Looking to the quasi-
judicial function exercised by the appellate authority in many states, it is desirable if such
functions are performed by the industrial tribunal/labour courts in Assam and Tripura.

34 (1993) Lab. IC 636.

35 See Shahdara (Delhi) Saharanpur Light Rly. Co. Ltd v. Saharanpur Rly. Workers Union, (1969) 1 LLJ 741
(SC).
36 See Table 9.26 of the Indian Labour Year Book of 1979, 292-93 (1982).
690 • Industrial Relations and Labour Laws

D. Powers of the Appellate Authority

An appellate authority can either confirm the standing orders in the form certified by the
certifying officer or amend the said standing orders by making such modification thereof or
addition thereto, as he thinks necessary so as to render standing orders certifiable under the
Act. 37 He has, however, no power to set aside the orders of certifying authority38 • Likewise,
it has no power to remand the case because it has a power whether to confirm or modify
the award as it deems fit. 39

E. Duties of the Appellate Authority

The Act casts a duty upon the appellate authority to send copies of the order made by it to
the certifying officer, employer and trade union or other prescribed representatives of the
workmen within 7 days of the date of the order, 'unless it had confirmed without amendment
the standing orders as certified by the certifying officer, by copies of the standing orders as
certified by it and authenticated in the prescribed manner. 140
The aforesaid provision is akin to a provision requiring the drawing up of the degree
in pursuance of the orders passed by a civil court. The Act requires the appellate authority to
send copies to the authorities mentioned therein after effecting amendments or modification
in terms of its order within 7 days of the order .41 In other words, the obligation to draw up
standing orders in conformity with the orders passed in appeal is placed before the appellate
authority and that obligation has to be discharged within the period of 7 days from the date
of the order under sub-section (1). 42

Section 7 sets out the date on which the standing orders or amendments made thereto would
become operative. It provides that the standing orders shall come into operation on the
expiry of 30 days from the date on which authenticated copies thereof are sent as required by
sub-section (5) of Section 3, or where an appeal is preferred on the expiry of 7 days from the
date on which the copies of the appellate order are sent under sub-section (2) of Section 6. 43

There is no specific provision in the Act dealing with the binding nature and effect of standing
orders. In the absence of any provision, courts have held that a standing order certified under

37 Section 6 (1}; See also, NGEF Ltd v. Industrial Tribunal, AIR 1970 Mysore 149, 150; Bijli Mazdoor Sangh,
v. UP Electricity Board, AIR 1970 Allahabad 589,594; and see Khadi Gram Udyog v. ]it Ram, (1975) 2
LLJ 413 (Punjab and Haryana).
38 Khadi Gram Udyog Sangh op. cit., 415; see also Kerala Agro Machinery Corp. Ltd v. Industrial Tribunal,
(1998} 2 LLJ 7 and Management of Manipal Power Press v. Sadananda Devadiga, (2004) LLR 644.
39 Management of Manipal Power Press v. Sadananda Devadiga and Others, (2004) LLR 644.
40 Section 6 (2).
41 See NGEF Ltd v. Industrial Tribunal, AIR 1970 Mysore 149, 150.
42 Id. at 150-151.
43 Section 7; See also Mohd. Yasin v. Industrial Tribunal, (1975) 1 LLJ 100 (Orissa) See Bharat Petroleum
Corporation Ltd v. Maharashtra General Kamgar Union, (1999} LLR 180 (SC}.
 Certif cation Process-Its Operation and Binding Effect • 691

IESOA is binding upon the employers and employees of the industry concerned. However,
the decided case reveals that even though they are binding, they do not have such force of
laws as to be binding on industrial tribunals adjudicating on industrial dispute. 44
In Guest Keen Williams (Pvt.) Ltd v. P JSterling45 , Justice Gajendragadkar delivering the
judgement of the Supreme Court explained the position:

... the standing orders when they were certified became operative and bound
the employer and all the employees.46
Buckingham and Carnatic Co. v. Venkatian 47 spoke more in terms of the binding nature
of standing orders:

The certified standing orders represent the relevant terms and conditions of
service in a statutory form and they are binding on the parties at least as much,
if not more, as a private contract embodying similar terms and conditions of
service.48
But, in Tata Chemicals v. Kailash C. Adhvaryet49, the Gujarat High Court observed that:

the standing order when finally certified under the Act becomes operative and
binds the employer and the workmen by virtue of the provisions of the Act
and not by virtue of any contract between the employer and the workmen. 50
The Court added:

The rights and obligations created by the standing orders derive their force not
from the contract between the parties but from the provisions of the Act. They
are statutory rights and obligation and not contractual rights and obligations.51
Whether certified standing orders govern the employees appointed before they
become operative? This question has formed the subject-matter of controversy in number
of decided cases.
In Guest Keen Williams Pvt. Ltdv. P JSterling52, the Supreme Court held that the retiring
age fixed by the standing orders did not apply to the workmen appointed before their
coming into operation and for them, a higher age of retirement was fixed as at the time
when they were employed, there was no age of retirement. But, in Salem Erode Electricity
Distribution Co. v. Their Employee Union 53 and Agra Electric Supply Co. v. Alladin54, the Supreme
Court made a departure from its earlier decision in Guest Keen Williams Pvt. Ltd supra. In

44 Co-operative Central Bank Ltd v. Addl. Industrial Tribunal, AIR 1970 SC 245, 253.
45 Guest Keen Williams (Pvt.) Ltd v. P J Sterling, (1959) 2 LLJ 405 (SC}.
46 (1959) 2 LLJ 405 at 411.
47 Buckingham and Carnatic Co. v. Venkatian, AIR 1964 SC 1272.
48 Id. at 1275.
49 Tata Chemicals v. Kailash C. Adhvaryer, (1965) 1 LLJ 54.
50 Id. at 65.
51 Tata Chemicals v. Kailash C. Adhvaryer, op. cit.
52 Guest Keen Williams (Pvt.) Ltd v. P J Sterling, op. cit., 1279.
53 Selam Erode Electricity Distribution Co. v. Their Employees Union, AIR 1966 SC 808.
54 Agra Electric Supply Co. v. Alladin, (1969} 2 LLJ 540 (SC}.
692 • Industrial Relations and Labour Laws

the former case, the first standing orders were certified in 1947. The management wanted
to modify the certified standing orders, on the subject of leave and holidays sometime in
1960 in respect of the new entrants preserving the old rules in respect of old workmen. The
modification was negatived by the certifying officer and appellate authority. On appeal,
the Supreme Court upheld those orders observing that standing orders certified under the
Act must be uniformly applied to all workmen and it was not permissible for an industrial
establishment to have two sets of standing orders to govern the terms and conditions of
its employees. In the latter case, the first standing orders of the company were certified
in 1951. In these standing orders, the age of superannuation of employees was fixed at 55
years. Prior to 1951, there were no rules relating to superannuation. Three workmen who
were appointed long before 1951 were retired from service in 1963 and 1964 on the ground
that they had crossed the age of superannuation of 55 years. The workmen challenged the
order retiring them from service on the ground that they were appointed before the making
of the standing orders and were not governed by the rule of superannuation contained in
them. The Supreme Court negatived the contention and ruled:

[O]nce the standing orders are certified and come into operation, they become
binding on the employer and all the workmen presently employed as also
those employed thereafter in the establishment conducted by that employer.
It cannot possibly be that such standing orders would bind only those who
are employed after they come into force and not those who were employed
previously but are still in employment when they come into force.
Because in its view:

[I]f the standing orders were to bind only those who are subsequently employed,
the result would be that there would be different conditions of employment for
different classes of workmen, one set of conditions for those who are previously
employed and another for those employed subsequently, and where they are
modified, even several sets of conditions of service depending upon whether
a workman was employed before the standing orders are certified or after,
whether he was employed before or after a modification is made to any one
of them and would bind only a few who are recruited after and not the bulk
of them, who though in employment, were recruited previously. Such a result
could never have been intended by the legislature, for that would render the
conditions of service of workmen as indefinite and diversified, as before the
enacbnent of the Act. 55
The aforesaid two decisions in Salem Erode Electricity Distribution Co. and Agra Electric
Supply Co. were re-affirmed in UP Electric Co. v. Workmen wherein it was held 'that it was
not intended by the legislature that different sets of conditions should apply to employees
depending or whether a workman was employed before the standing order was certified
of after, which would defeat the very object of the legislation'56• Here it is relevant to add
that while the Guest Keen Williams Pvt. Ltd was decided before the 1956 amendment, the
remaining three later cases were decided after 1956 amendment which empowered the
certifying officer to go into the reasonableness or fairness of standing orders.

55 Agra Electric Supply Co. v. Alladin, op. cit., 545.

56 UP Electric Co. v. Workmen, (1972) 2 SCC 54 at 61.
 Certif cation Process-Its Operation and Binding Effect • 69 3

In Sudhir Chandra Sarkar v. Steel Company Ltd 57 reliance was placed on an earlier
decision in Agra Electric Supply Company Ltd v. Alladin.
Again, the aforesaid view was reiterated in Bharat Petroleum Corporation Ltd v.
Maharashtra General Kamgar Union. 58 Here, the Supreme Court held that once the standing
orders are certified, they constitute the conditions of service binding upon the management
and the employees serving already and in employment or who may be employed after
certification.

The Act imposes a duty upon the employer to put up the text of certified standing orders
in English language and in the language of the majority of workmen on special boards
maintained for the purpose, at or near the entrance through which the majority of workmen
enter the industrial establishment and in all deparbnents thereof where the workmen are
employed.59 This section has been held to be merely directory but non-compliance with the
direction may result in the employer not succeeding in satisfying the industrial tribunal that
there is proper case for termination of service or other disciplinary action. 60

57 AIR 1984 SC 1164.

58 (1999) LLR 180 (SC).
59 Section 9.
60 See Ismail Papamia v. Labour Appellate Tribunal, AIR 1969 Bombay 584-586.
Modification and
Temporary
Application of Model
Standing Orders 27
A. Law and Policy
The Industrial Employment (Standing Orders) Act, 1946 (hereinafter referred to as IESOA)
has provided a speedy and cheap remedy to workmen to get their conditions of employment
determined in the prescribed manner. Thus, the IESOA provides remedy to both employees
and employers who desire any modification in the certified standing orders. 1 The Act
provides that the standing orders finally certified under the IESOA cannot be modified
except on agreement between the employer and the workmen or a trade union or other
representative body of workmen before the expiry of 6 months from the date on which the
standing orders or the last modifications became operative. From this, it is evident that the
Act does not place any restriction on the right of the employer or workman to apply for
modification except, of course, in respect of the time limit of 6 months2 • But even in respect
of the time there is an exception; modification is permissible even before 6 months if there
is an agreement between the parties.
The policy underlying Section 10 is that modification should not be allowed within
6 months from the date when the standing orders or the last modification thereof came
into operation3 • The object of providing the time limit was that the standing orders or
their modification should be given a fair trial. 4 However, decided cases5 reveal that an
application for modification may be entertained where: (i) a change of circumstances has
occurred, or (ii) where experience of the working of the standing orders last certified result
in inconvenience, hardship, anomaly, etc., or (iii) where some fact was lost sight of at time
of certification, or (iv) where the applicant feels that a modification will be more beneficial
to the parties concerned or in the interest of the establishment.

1 See, Rohtak and Hissar District Supply Co. v. State of UP, AIR 1966 SC 1471, 1476.
2 See SS Rly. Co. v. Workers Union, AIR 1969 SC 513.
3 Ibid.
4 AIR 1969 SC 513 at 521.
5 Ibid.
696 • Industrial Relations and Labour Laws

B. Who May Apply for Modification

Prior to 1956, the right to apply for modification was conferred on the employer alone.
This remedy was hardly satisfactory. In order to remove this hardship, the Act was
amended in 1956. The amended Act, inter alia, permits both the employer and workman
to apply for modification of the standing orders. The use of the word 'workman' in some
cases led to doubt whether a body of workmen could also exercise this right. In order to
clarify this position, the 1982-Amendment not only permits the employer and workmen
but also trade unions or other representatives of the workmen to apply for modification
of standing orders.
Under Section 10 (2), an employer or workmen or trade union or other representative
body of the workmen can apply for modification of the standing orders. This shows that it can
even be workmen. The workmen need not be in sizeable number. Trade union can also be an
applicant. It need only be a trade union registered under the Trade Union Act. The Act does
not say that it shall have recognition or a representative character with substantial majority.
It is obviously so because notice on such application for modification shall necessarily be
given by the workmen or any one of the trade union to other trade unions or such other
representatives of workmen in terms of Section 5 (2) read with sub-section (3) of Section
10. If the applicant is not the sizeable majority and majority of the workmen represented
by other trade unions object to it, necessarily, the certifying officer can ascertain the will of
the workers. Thus if application for modification is made by a minority union, the majority
union can object to such modification. 6

C. To Whom an Application for Modification May be Made

The application for modification must be made to the certifying officer.

D. Procedure for Modification

The application for modification of standing orders must be accompanied by 5 copies of the
modification proposed to be made and where such modifications are proposed to be made by
agreement between the employer and the workmen, a certified copy of that agreement shall
be filed along with the application. Thus, the only way to give effect to the amendment was
by resorting to the procedure of amendment contemplated by Section 10 of the Industrial
Employment (Standing Orders) Act, 1946. Until the existing certified standing orders are
suitably amended, the model standing orders could not be deemed to be applicable to the
concerned establishment.7
The aforesaid provisions of the Act shall apply in respect of an application for
modification as they apply to the certification of first standing orders. 8 But, the said
provision is not applicable to an industrial establishment in respect of which the appropriate
government is the government of the state of Gujarat or Maharashtra. 9

6 Indian Express Employees' Union v. Indian Express (Madurai) Ltd, (1999) 1 LLJ 490 (Kerala).
7 MC Raju v. Executive Director, (1985) 1 LLJ 210.
8 Section 10 (3).
9 Section 10 (4).
 Modi( cation and Temporary Application of Model Standing Orders• 697

E. No Time-limit for Making Application

In Indian Express Employees' Union v. Indian Express, Madurai, Ltd10, the Kerala High Court
held that Section 19(2) does not lay down any time limit for making an application for
modification of standing orders. The said application can be made after expiry of 6 months
from the last modification. There is no bar to file an application for modification even after
a decade.

F. Application of Principles of Resjudicata

It has been held by the Supreme Court decision in SS Rly Co. v. Workers Union 11 that it
is doubtful whether principle analogous to resjudicata can be applied for modification of
standing orders.

G. Powers of Certifying Officer/Appellate Authority

In Falcon Tyres Ltd v. Falcon Tyres Employees' Union Mysore 12, the petitioner-management
filed an application seeking for modification before the certifying officer. The petitioner-
management, wanted inclusion of standing order 19(d) in the matter of medical discharge
which reads as under:

All employees are required to undergo medical examination at the time of

recruibnent and shall be referred to the district medical board by the company
from time to time to determine the medical fitness of the workman to carry
out the job for which he is recruited. If the employee is found medically unfit
by the district medical board he shall be liable to be discharged from the
company's services. If an employee is covered under ESI, his discharge will be
in accordance with Regulation 98 of the ESI (General) Regulation.
The draft clause was certified by the certifying officer. In appeal, the appellate authority
modified the standing order certified by the certifying officer which read as under:

All employees are required to undergo medical examination at the time of

recruibnent and shall be referred to the medical board by the company from
time to time to determine the medical fitness of the workmen to carry out the
job for which he is recruited. If an employee is found medically unfit by the
medical board to carry out the job for which he is recruited, then he shall be
given an alternative suitable job protecting his last drawn salary.
On a writ petition filed against the order of the appellate authority, the Karnataka
High Court held that the modification suggested by the appellate authority would virtually
be an amendment directing the management to create an alternative suitable job in terms
of the amendment. Such a modification cannot be termed as fair or reasonable in terms
of the Industrial Employment (Standing Orders) Act, 1946. It cannot be said that the
management should not have any concern for medically terminated employees but to
compel an employer to create a post stands on a different footing rather than suggesting

10 1998 Lab. IC 529.

11 SS Rly. Co. v. Workers Union, AIR 1969 SC 513.
12 (2006) LLR 129.
698 • Industrial Relations and Labour Laws

to the management to consider a case sympathetically in such cases, in the circumstances.

The Court, therefore set aside the order of appellate authority and upheld the order of
certifying officer.

Section 12 A deals with the temporary application of model standing orders to the industrial
establishments. This provision applies between the period from the date of the application
of the Act to an industrial establishment and to the date on which the certified standing
orders come into operation, under Section 7 of the Act. Since it takes time in the certification
process, Section 12-A provides:

Notwithstanding anything contained in Section 3 to 12, for the period

commencing on the date on which this Act becomes applicable to an industrial
establishment and ending with the date on which the standing orders as
finally certified under this Act came into operation under Section 7 in that
establishment, the prescribed model standing orders shall be deemed to be
adopted in that establishment, and the provisions of Section 9, sub-section (2)
Section 13 and Section 13-A shall apply to such model standing orders as they
apply to the standing orders so certified.
This Section provides thatthe model standing orders will be applicable to an industrial
establishment during the period commencing on the date on which the Act becomes
applicable to that establishment and the date on which the standing orders, as finally certified
under this Act, came into operation13 • To hold that the Act would not apply to industrial
establishments which came into existence after the date of enforcement of the Act, would
exclude practically all industrial establishments which came into existence after the Act was
enforced and which had not framed standing orders and got them certified under the Act.
This would defeat the intent underlying the Act. 14 Be that as it may, these provisions shall
not apply to an industrial establishment in respect of which the appropriate government
is (i) the government of state of Gujarat and (iz) the government of state of Maharashtra. 15
Where there are two categories of workers, namely, daily-rated and monthly-rated but the
certified standing orders are in respect of daily-rated workmen only, then model standing
orders may be made applicable to the monthly-rated workmen. 16 The prescribed model
standing orders have the same legal efficacy to govern the terms and conditions of service
of industrial establishments to which the Act applies during the relevant period as the
certified standing orders. 17

13 Bharat Petroleum Corporation Ltd v. Maharashtra General Kamgar Union, (1999) LLR 180 (SC).
14 Shitla Prasad v. State of UP, 1986 Lab. IC 2025.
15 Section 12-A (2).
16 Indian Iron & Steel Co. v. Ninth Industrial Tribunal, (1977) Lab. IC 607.
17 Pallavan Transport v. Labour Court, (1984) 2 LLJ 132 (Madras).
Interpretation and
Enforcement of
Standing Orders 28
Section 13-A provides that if any question arises as to the application or interpretation of
standing orders certified under the Act, such question can be referred to a labour court, by
any employer or workman or a trade union or other representative body of workmen, and
on such reference, the labour court constituted under the Industrial Disputes Act, 1947 'after
giving the parties an opportunity of being heard'} decide the question and such decision
shall be final and binding on the parties.
The expression 'after giving the parties an opportunity of being heard' has been
differently interpreted. In Chipping and Painting Employers Association v. A T Zambn?, the
Bombay High Court held that hearing the parties would not include leading evidence
before the court for determination of disputed question of fact. On the other hand, in M/s
Deoria Sugar Mills Ltd v. Deputy Labour Commissioner} the Allahabad High Court held that
under Section 13, it is permissible for the workman concerned to produce any evidence
which is relevant and related to workmen concerned and what was its probative value
and whether it was sufficient to rebut the initial presumption in favour of the entry in the
provident fund records.
Section 13-A provides only for reference of a question as to the application or
interpretation of standing orders certified under the IESOA and the labour court is
empowered to give its decision on the question so referred. 4 The jurisdiction of the labour
court is, therefore, confined to decide the question as to the application or interpretation of
the standing orders which is referred to it. 5 The decision of the labour court shall be final
and binding on the parties. 6

1 Tata Chemicals Ltd v. Kailash C Advaryer, AIR 1964 Gujarat 265.

2 Chipping and Painting Employers Associations v. AT Zambre, AIR 1969 Bombay 274.
3 Mis Deoria Sugar Mills Ltd v. Deputy Labour Commissioner, 1977 Lab. IC 102 (Allahabad).
4 Tata Chemicals Ltd v. Kailash C Advaryer, op. cit., 265, 75.
5 Tata Chemicals Ltd v. Kailash C Advaryar, AIR 1964 Guj. 265.
6 Ibid.
700 • Industrial Relations and Labour Laws

In Sri Ganpathi Mills Co. Ltd v. Presiding Officer, Labour Court,7 the second respondent
and two other workers beat a co-worker Velu for union activities and caused him injuries.
Velu withdrew the complaint but the management after initiating disciplinary proceedings
dismissed the second respondent on the charge of riotous and violent behaviour. The labour
court found that there was no riotous and violent behaviour and directed reinstatement.
Aggrieved by this order, the management filed a writ petition in the Madras High Court.
It was contended that the misconduct as projected against the second respondent, was not
an enumerated misconduct under the standing orders and hence, the charges themselves
were not entertainable. In order to deal with the contention, Clause 24 K of the standing
orders is relevant and which is to the following effect: 'drunkenness or riotous or disorderly
behaviour during the working hours on any act subversive of discipline and/ or efficiency'.
The second respondent contended that the dispute was only between two workers and that
it had taken place outside the premises of the mill, and hence could not be a subject-matter
of any disciplinary proceeding. The Court found that this was not a case of assault between
the workers regarding their private affairs. Indeed the assault related to union activities.
As regards the place of occurrence, standing order 24K does not refer to any geographical
or territorial limitations. It is not difficult to perceive a situation where the misconduct of
an employee could take place outside and far away from the premises. The test is whether
the conduct affects or tends to affect the establishment. The Court held that there was no
basis in the finding of the labour court that the charges against the second respondent were
not established.
In Ashok Leyland Ltd, Madras v. Presiding Officer, Second Additional Labour Court, Madras 8,
the management dismissed a workman, who was a checker in the store of the company
for fraudulently acknowledging delivery of challans without actually receiving the articles
amounting to fl,15,500 /- after holding an inquiry. Similar charges were also levelled against
the receipt clerk but he was not found guilty in the inquiry hence no action was taken against
him. The workman raised an industrial dispute. The labour court directed reinstatement of
the employee without back wages but with continuity of service. Aggrieved by the same,
the management filed a writ petition and the employee also filed a petition questioning that
part of the award which held him guilty of the charge levelled against him. It was, inter
alia, contended that the order of dismissal did not disclose any aggravating circumstance
in the conduct of the delinquent so as to justify an order of dismissal and hence, there was
a violation of the standing orders. Rejecting the contention, the Madras High Court held
that Standing Order No. 20 (iii) requires reference to be made to aggravating circumstances
'if any'. If there are no such aggravating circumstances, it is not possible to expect any
reference to be made in the order of dismissal. The very nature of delinquency is serious
enough without any necessity to refer to any aggravating circumstances to justify the order
of dismissal. The Court, accordingly, set aside the order of the labour court and sustained
the order of dismissal passed by management.
In NDMC v. Mohd. Shamim,9 the Delhi High Court held that under Section 13A of
the Industrial Employment (Standing Orders) Act, 1946, only the labour court and not the
industrial tribunal is empowered to entertain an application for interpretation of certified
standing orders.

7 2003 LLR 88.

8 2003 LLR 784.
9 2003 LLR 524.
 Interpretation and Enforcement of Standing Orders • 7 o1

In Madhya Pradesh State Electricity Board v. S K Yadav 10, the Supreme Court considered
the effect of a certified standing order which provided that any employee who desired to
obtain leave of absence' shall apply to the manager or the officer authorized by him. It shall
be the duty of the manager or the officer to pass orders thereon on two days fixed for the
purpose ... ' Here the employee applied for leave but he was not communicated any decision
thereon. In view of this, he contended that in the absence of any order of rejection, it should
be deemed that the leave was sanctioned. The Court rejected the contention and held that
non-compliance would not mean that he had been granted leave and he could be held to
be unauthorizedly absent. Non-compliance therewith would not vitiate the ultimate order
as the said provision must be held to be directory in nature and not mandatory.

A. Powers of the Labour Court Under Section 13-A

Does Section 13-A of the IESOA provide a remedy for the enforcement of rights and liabilities
created by the standing orders certified under the Act? This question arises because it is
the only Section in the Act which confers a right upon the employer and workmen to refer
the question as to the application or interpretation of standing orders certified under the
act to the labour court.
The Gujarat High Court11 has held that 'there are no words in Section 13-A which
empower the labour court to grant redress for violation of the rights and obligations
created under the standing orders.' The Court added that no power to grant relief by way
of enforcement of the rights and obligations created by the standing orders can be implied
merely from the conferment of the power on the labour court to decide any question as to
the application or interpretation of standing orders which might be referred to it by the
employer or workmen. The Court held that the labour court is not competent under Section
13-A to grant a declaration that the dismissal of the workmen concerned was illegal and
that they continued in the employment of employer. Further, the Court ruled that labour
court is empowered to direct the employer to pay to workman concerned his emoluments
from the date of dismissal to the date of reinstatement.
The high courts are, however, divided on the issue whether it is possible for a
discharged or dismissed workman to approach the labour court under Section 13-A to get
an interpretation about certain provisions of the standing orders. While the Rajasthan12
and Bombay13 High Courts answered it in affirmative, the Calcutta14 High Court took a
contrary view.
Labour courts under Section 13-A are, however, empowered to decide whether
evidence is relevant to workman concerned and what is its probative value and whether
it is sufficient to rebut the initial presumption in favour of the entry in the provident fund
record. 15
The Supreme Court deprecated the tendency of some public sector undertakings to
continue archaic standing orders reminiscent of the days of hire and fire in utter violation

10 (2009) 2 sec 50.

11 Ibid.
12 See Mahalaxmi Mills Co. Ltd v. Labour Court, (1965) 1 LLJ 517 (Rajasthan).
13 Chipping and Painting Employers' Association v. AT Zambre, AIR 1969 Bombay 274.
14 SK Mukerjee v. Calcutta Electric supply Co. Ltd, (1969) 1 LLJ 603 (Calcutta).
15 See Deoria sugar Mills Ltd v. Dy. Labour Commissioner, op. cit., 102.
7 o2 • Industrial Relations and Labour Laws

of the principles of natural justice. Thus, in Workmen of Hindustan Steel v. Hindustan Steel
Ltd16, the Supreme Court was invited to determine the scope of Standing Order No. 32 of
the Hindustan Steel Ltd,-a public sector undertaking which enjoins the general manager
to dismiss an employee by merely recording the reasons for dispensing with inquiry if it
is inexpedient or against the interest of security to continue to employ the workman. The
Court held that this provision of standing orders was violative of the principles of natural
justice. In view of this, the Court emphasized the need to recast Standing Order No. 32 in
order to bring it in conformity with the philosophy of the Constitution.
The question whether para 3 of the Standing Order No. 17 implies second opportunity
given to the delinquent, was answered in the negative by the Supreme Court in Associated
Cement Co. Ltd v. TC Srivastava. 17 Speaking for the Court, Justice Tulzapurkar observed:

On a plain reading of the relevant words, no second opportunity of showing

cause against the proposed punishment is contemplated either expressly or
by necessary implication. In other words, it is clear to us that the opportunity
spoken by Para-3 of Standing Order No. 17 is the opportunity to be given to
the delinquent to meet the charge framed against him.
In M/s Glaxo Laboratories (I) Pvt. Ltd v. Presiding Officer, Labour Court, 18 a question
arose 'whether the charges imputing misconduct as found by the appellant company
would be covered by the Clauses 10, 16, 30 of the Standing Order 22'. The Supreme
Court ruled that; the misconduct prescribed in standing orders which would attract a
penalty should have a casual connection with the place of work as well as the time at
which it is committed which would ordinarily be within the establishment and during
duty hours. Even where the standing order is couched in a language which seeks to
extend its operation far beyond the establishment, it would nonetheless be necessary to
establish casual connection between the misconduct and the employment. This casual
connection must be real and substantial, immediate and proximate and not remote. The
Court pointed out that normal approach in law to the construction of a standing order
is that it would apply to the behaviour on the premises where the workmen discharge
their duties and during working hours of their work. It added that the well-established
canon of construction is that penal provisions must receive strict construction. Referring
to clause 10 of Standing Order 22, the Court observed that it must be strictly construed
so as not to comprehend any misconduct committed anywhere irrespective of the time-
place-content where and when it is committed and merely has some remote impact on
the 'peaceful atmosphere in the establishment'. The expression 'committed within the
premises of the establishment or in the vicinity thereof' are the words of limitation and
a broad construction would make those words redundant. Clauses 16 and 30 form an
integral part of the code and the setting and purpose underlying these two clauses must
receive the same construction which Clause 10 received. Therefore, the charges against
the workman would not be comprehended in Clauses 10, 16 and 30 of Standing Order 22
applicable to the appellant company.

16 (1985) 1 LLJ 267.

17 (1984) 2 LLJ 105.
18 (1984) 1 sec 1.
 Interpretation and Enforcement of Standing Orders • 7 o3

The scope of section llC of UP IDA which is almost pari materia to Section 13-A came
to be interpreted and considered by the Supreme Court in the UP State Road Transport
Corporation v. UP Rajya Parivahan Karmchari Union 19• In this case the Court, while setting
aside the decision of the labour court in a case where it had declared a contractual workman
to be treated as regular workman has held thus:

In our opinion, the power of the labour court under Section 11-C of the UP
Industrial Disputes Act or under Section 13A of the Industrial Employment
(Standing Orders) Act, 1946 is much narrower than the power of the labour
court on a reference under Section 10 of the Industrial Disputes Act which
corresponds to Section 4-K of the UP Industrial Disputes Act.
The question about the jurisdiction of labour court under section 13-A of IESOA again
came up for consideration in Triveni Engineering & Indust. v. Jaswant Singh 20•
In this case, respondent No. 1 who claimed to be a workman of the appellant was
transferred during the course of his employment, but he did not join the place of transfer.
Thereupon, the appellant terminated his services.
Being aggrieved by the order of termination of his services, he filed a writ petition
in the Allahabad High Court challenging the transfer order as also the termination order
issued by the appellant herein. He contended, inter alia, that the standing orders contain no
provision for the transfer of a workman from one sugar factory to another, and therefore,
his transfer was against the law. Therefore, his services could not have been terminated for
not joining at a place of transfer.
The appellant on the other hand took a plea that the respondent was not a 'workman'.
The High Court disposed of the writ petition leaving the respondent at liberty to move
a representation before the labour commissioner, Kanpur, UP in term of Clause 'W' of
the standing orders applicable. A representation in terms of the said order was filed by
the respondent. It was contended before the labour commissioner by the appellant that
respondent number 1 was not a workman, and therefore, the labour commissioner had no
jurisdiction to adjudicate the representation under the provisions of UP Industrial Disputes
Act, 1947, particularly in terms of Clause 'W' of the standing orders. The labour commission
disposed of the petition, concluding that the question at hand related to whether respondent
no. 1 was a workman under the UP Industrial Dispute Act, 1947. The labour commission
held that the question whether the respondent number 1 was a workman or not could not
be decided under clause 'W' of the standing orders, but instead should be determined by
the labour court/industrial tribunal.
Aggrieved by the order of the labour commission, respondent number 1 filed a writ
petition challenging the aforesaid conclusions. The learned single judge, however, dismissed
the said writ petition.
Thereupon, the respondent filed a special appeal before the division bench of the
Allahabad High Court. The division bench of the High Court set aside the orders of the
labour commissioner as also of the single judge and remitted the matter back to the labour
commissioner to decide the nature of service of respondent number 1 in accordance with law.

19 2007 (4) SCALE 302.

20 2010 (8) SCALE 113.
704 • Industrial Relations and Labour Laws

Being aggrieved by the said judgement and order, the special leave petition was filed
in the Supreme Court. The Court ruled:

Whether or not a person is a workman is a matter that relates primarily to facts

and circumstances of the case. The same has nothing to do with the application
and interpretation of the standing orders. What needs to be examined and
looked into for deciding the aforesaid issue is the nature of job performed
by the concerned person, duties and responsibilities vested in him and other
such relevant material.
In view of above, the Court held that the division bench of the High Court committed a
mistake in determining the said issue as ancillary to that of the applicability and interpretation
of the standing order. Further, the order of termination also could not have been examined
and scrutinized as such power and jurisdiction is not vested with the labour commissioner.
The Court accordingly set aside the judgment and order passed by the division bench of
Allahabad High Court and upheld and restored the orders of single judge as also of the
labour commissioner.

B. Powers of the High Court

In UP State Bridge Corpn. v. UP Rajya Setu Nigam S Karamchyari Sangh,21 the respondent
workmen did not attend their duties from certain date and presumably they had gone on
strike in pursuance of their demands. Thereafter, the appellant corporation issued an order
under clause L-2.12 of the certified standing orders of the company which provided:

Any workman who remains absent from duty without leave or in excess of the
period of leave originally sanctioned or subsequently extended for more than 10
consecutive days, he shall be deemed to have left the services of the corporation
on his own accord, without notice, thereby terminating his contract of service
with the corporation and his name will accordingly be struck off the rolls. It
stated therein that if the workmen continued to absent themselves form work
continuously for more than 10 days, it shall be presumed that they have left the
services of the corporation without any notice and their services shall come to an
end and their names shall be removed from the muster roll of the corporation.
However, when after repeated public notices the workmen did not resume duties,
the corporation passed an order putting an end to the service of 168 workmen on the
presumption that they had abandoned their services with the corporation on their own.
However, no inquiry had been held before the services of the workmen were terminated.
One such workman whose services were so terminated challenged the order of termination
before the High Court, Lucknow bench. The Court dismissed the petition on the ground that
the workman could raise an industrial dispute, if he so desired. Thereafter, the respondent
union filed a second writ petition in the Allahabad High Court which was allowed.
A single judge of the Allahabad High Court held that (i) the word 'absence' in the standing
orders did not by itself mean abandonment of service, since the employees were on strike,
it was not their intention to abandon service. (ii) resorting to strike was neither misuse of
leave nor overstaying the leave. (iii) standing order had not made a provision as to how
a strike had to be dealt with (iv) the strike resorted to by the workman was not an illegal

21 (2004) 4 sec 268.

 Interpretation and Enforcement of Standing Orders • 7 o5

strike and also participation in strike whether legal or illegal, did not and could not be said
to amount to abandonment of service justified under Clause L-2.12 of the standing orders
(v) at most, participation in illegal strike may amount to misconduct for which a punishment
was provided under the standing orders after an inquiry. The Court accordingly held that
the impugned order of termination was bad for non-compliance with principles of natural
justice and, therefore, could not be sustained. A division bench of the High Court dismissed
the petition. Aggrieved by this, the management filed an appeal in the Supreme Court. The
Supreme Court held that the High Court had erred in exercising extraordinary jurisdiction
under Article 226 of the Constitution by entertaining the writ petition of the respondent
union at all. The Court observed that the dispute being an 'industrial dispute' both within
the meaning of the Industrial Disputes Act as well as the UP Industrial Disputes Act, the
rights and obligations sought to be enforced by the respondent union in the writ petitions
were those created by the Industrial Disputes Act. In further added that in terms of the
decision of the court in Premier Automobile Ltd v. Kamlekar Shantaram Wadke2 2 when the
dispute relates to the enforcement of a right or an obligation created under the said Act,
then the only remedy available is to get it adjudicated under the Act.

The enforcement of law implies that there are penalties, in case it is not complied with.
The enactment of legislative measure is thus always accompanied by provision for specific
penalties in case of violation of the provisions of the Act. Thus, Section 13(1) prescribes a
fine extending to ~5,000 on those employers who fail to submit draft standing orders under
Section 3, or who modify their standing orders otherwise than in accordance with Section
10. If the offence is a continuing one, he shall be liable for further fine extending to ~200
every day after the first during which the offence continues. The Act also imposes a fine
extending to ~100 upon employer who contravenes any provision for the finally certified
standing orders under the Act. If the offence is a continuing one he shall be liable to a
further fine extending to ~25 everyday after the first during which the offence continues.23
But, in order to be prosecuted for the aforesaid offence, the prior sanction of the appropriate
government is essential.24 However, no court inferior to that of a metropolitan magistrate
or judicial magistrate of second class shall try any offence under this Section.25

A. Civil Remedy under the IESOA

The penal provisions, however, do not foreclose the civil remedy. The IESOA does not,
however, invest the labour court with the power to grant relief in enforcement of rights and
liabilities created by the standing order which requires to be given to the workman, such
redress cannot be given by the labour court under section 13a.

22 (1976) 1 sec 496.

23 Section 13 (2).
24 Section 13 (3).
25 Section 13 (4).
706 • Industrial Relations and Labour Laws

B. Remedy for Enforcement of Rights and Liabilities

Created under the Industrial Disputes Act, 1947
The Industrial Disputes Act, 1947, however, provides for relief to workmen affected due
to violation of the provisions of certified standing orders. But, in order to do the same, an
industrial dispute must be raised and the same must be referred by the appropriate government
under Section 10 to the labour court for adjudication. Indeed, Section 7 read with Clause I of
Schedule I empowers the labour court to adjudicate upon industrial disputes relating to 'the
property or legality of an order passed by an employer under the standing orders'.

C. Under the Civil Procedure Code

Can a civil court entertain a suit with respect to dispute between employer and workman
regarding enforcement of standing orders? This issue has been considered by the Supreme
Court in Rajasthan SRTC v. Mohar Singh 26• The Court held that if the infringement of the
standing orders is alleged, the civil court's jurisdiction may be held to be barred but if the
suit is based on the violation of principles of common law or constitutional provisions or
on other grounds, the civil court's jurisdiction may not be held to be barred. If no right is
claimed under a special statute in terms whereof the jurisdication of the civil court is barred,
the civil court will have jurisdiction.
The above view was reiterated by a three-judge bench of the Supreme Court in Rajasthan
State Road Transport Corporation v. Bal Mukund Bairwa27. The Court ruled that if an employee
intends to enforce his constitutional rights or a right under a statutory regulation, the civil
court will have the necessary jurisdiction to try a suit. If, however, he claims his right and
corresponding obligations only in terms of the provisions of the Industrial Employment
(Standing Orders) Act, the civil court will have no jurisdiction. In view of this it would not
be correct to contend that only because the conditions of service of workmen are otherwise
governed by the standing orders certified under the 1946 Act, ipso facto the civil court will
have no jurisdiction.
In RSRTC v. Deen Dayal Sharma 28, the Supreme Court held that it is the nature of right
sought to be enforced which is decisive in determining whether the jurisdiction of civil
court is barred or not.

The effectiveness of law lies in its implementation. Its non-enforcement is the negative aspect
of instrument of social control. The IESOA does not contain any provision for inspection
machinery for the enforcement of the provisions of the standing orders. However, it is
significant to note that the twenty-fourth session of the Standing Labour Committee in its
meeting on 13-14 February 1966 at New Delhi suggested that the IESOA should be amended
to provide for the appoinbnent of inspectors to enforce the provisions of the Act.

26 (200s) s sec 542.

27 (2009) 4 sec 299.
28 (2010) SCALE 1.
Role of Government
Under the I ESOA 29
The appropriate government has an active role to play in respect of application, addition
and exemption of industrial establishment, addition of items in the Schedule and rule-
making power. Before we turn to discuss these powers, it is relevant to note the definition of
'appropriate government.' Section 2 (b) of the IESOA defines' appropriate government' to mean:

in respect of industrial establishments under the control of the Central

Government or a railway administration or in a major port, mine or oil field,
the Central Government, and in all other cases, the state government.
A comparison of the aforesaid definition with that of the definition of the 'appropriate
government' in Section 2 (a) of the Industrial Dispute Act, 1947, reveals that two definitions
are not similar. It is, therefore, necessary to amend the aforesaid definition on the lines
of the definition in IDA. This amendment is necessary for the sake of uniformity in the
enforcement of law .1

The appropriate government is empowered to delegate any power exercisable by it under

the Act or any rules made thereunder} provided notification is issued in the official gazette
specifying the matters in relation to which the powers are delegated and the conditions
governing delegations. Such power may be delegated where appropriate government is
Central Government to such officer or authority subordinate to the state government as may
be specified in the notification. 3 Where the appropriate government is a state government,
by such officer or authority subordinate to it as may be specified in the notification.

1 See Memorandum of 31st Session of the Labour Ministries' Conference, Government oflndia, SIMC,
July (1980).
2 Section 14-A.
3 Section 14-A.
7 o8 • Industrial Relations and Labour Laws

Section 15 (1) of the IESOA empower the appropriate government to make rules for carrying
out the purposes of the Act. In order to exercise the power, the following conditions must
be complied with: (i) notification must be published in the official gazette before makinf
the rules; and (ii) the representatives of both the employers and workmen are consulted.

A. Power to Add Items in the Schedule

Under its rule-making powers, the appropriate government can (z) add additional matter to be
included in the Schedule of the IESOA; (iz) prescribe the procedure to be followed in modifying
standing orders certified under the Act. 5 However, before any rules are framed under this
provision, the appropriate government is required to consult both employers and workmen.6
Decided cases reveal that enumeration of the items in the Schedule of the Act will
not control or limit the width of the power conferred on the appropriate government by
sub-section (1) of Section 15 and so, if it appears that the items added by the appropriate
government have relation to conditions of employment; their addition cannot be challenged
as being invalid in law.7 It is the discretion of the appropriate government to take a
decision in respect of the matter whether or not such addition should be made. 8 Hence,
the reasonableness of such addition cannot be questioned because the power to decide
which addition should be made has been delegated to the appropriate government by the
Parliament. 9 Further, having 'regard to the development of industrial law in this country
during recent years, it cannot be said that gratuity or provident fund is not a term or condition
of employment in industrial establishments'.10 Similarly, itrelates the age of superannuation
or retirement to the conditions of employment in industrial establishments.1

B. Power to Frame Model Standing Orders

The Appropriate Government Act12 can also frame rules setting out model standing orders
for the purposes of the Act. In pursuance of the Rower, the state governments have framed
model standing orders applicable to workmen. 3

C. Power to Prescribe Procedure and Fee

The Act also empowers the appropriate government to (i) prescribe the procedure of
certifying officers and appellate authorities;14 (ii) prescribe the fee which may be charged

4 Section 14A.
5 Section 15 (1).
6 Section 15 (2}(a).
7 Rohtak and Hissar District Electric Supply Co. v. State of UP, AIR (1966} SC 1471, 1478.
8 Ibid.
9 Ibid.
10 Rohtak and Hissar District Electric Supply Co. v. State of UP, AIR (1966} SC 1471, 1478.
11 Ibid.
12 Section 15 (2).
13 See Roman Nambisan v. Madras State Electric Board, (1967) 1 LLJ 252,254 (Madras).
14 Section 2 (c).
 Role of Government Under the IESOA • 7 o9

for copies of standing orders,15 and (iii) provide for any other matter which may be
prescribed. 16

D. Approval of the Legislature

The Act requires that the approval of the legislature is essential whether the rules are framed
by Central or state government. In case the rules are framed by the Central Government, it
should be approved by both houses of the Parliament and where the rules are framed by a
state government, they should be approved by the legislature of the state. The approval must
be sought by laying down the same before the legislature concerned while it is in session
for total period of 30 days which may be comprised in one session or in two successive
sessions, and if, before the expiry of the session immediately following the session or the
two successive sessions, and if, before the expiry of the session immediately following the
session or the successive sessions aforesaid, the legislature makes any modification in the
rule or decides that rule should not be made, such rule shall be effective in modified form
or be of no effect, as the case may be. 17

There is no provision in the IESOA fixing a time-limit for completion of disciplinary

proceeding by the employer. However, Section 75 (1) of Industrial Relation Bill, 1978 for
the first time provided:

Where any employee is suspended by the employer pending investigation

or inquiry into complaints or charges of misconduct against him, such
investigation or inquiry, or where there is an investigation followed by an
inquiry, both the investigation and inquiry shall be completed ordinarily within
a period of 90 days from the date of suspension.
The inclusion of aforesaid provisions in the IESOA, it is submitted, would protect the workers
from undue harassment by the management.

Prior to 1982, there was no provision in IESOA for subsistence allowance in case of suspension
of an employee by the employer. However, the model standing orders provide for graded
system of payment of subsistence allowance. But the incorporation of this provision created
problems in the absence of any provisions in the IESOA. Further, the standing orders in the
state of Andhra Pradesh provided for a subsistence allowance of 50 per cent for 30 days, 75
per cent for 365 days and 100 per cent beyond 45 days. Similar provisions also exist in Gujarat,
Maharashtra, UP, West Bengal and Kerala. But they differ in several respects. In order
to meet this situation, Section 10-A was inserted in the Industrial Employment (Standing
Orders) Amendment Act, 1981. Sub-section (1) of Section lOA provides for payment of
subsistence allowance at the rate of 50 per cent of wages for the first 90 days of suspension,

15 Section 2 (d).
16 Section 2 (c).
17 See Section 15 (3).
7 1o • Industrial Relations and Labour Laws

which would thereafter be increased to 75 per cent of such wages for the remaining period
of suspension provided such workman is not responsible for delay in the completion of the
disciplinary proceeding. 18 Under sub-section 2 of Section lOA if'any dispute arises regarding
the subsistence allowance payable to a workman under sub-section (1), the workman or
the employer concerned may refer the dispute to the labour court constituted under the
Industrial Disputes Act, 1947, within the local limits of whose jurisdiction in the industrial
establishment wherein such workman is employed is situated and the labour courtto which
the dispute is so referred shall, after giving the parties an opportunity of being heard, decide
the dispute and such decision shall be final and binding on the parties.' 19 'Further, Section
10A(3) provides that notwithstanding anything contained in the governing provisions of
this Section, where provisions relating to payment of subsistence allowance under any other
law for the time being in force in any state are more beneficial than the provisions of this
section, the provisions of such other law shall be applicable to the payment of subsistance
allowance in that state. 120

Scope of Section 1 0A(1)

The scope of the Section 10-A of the Industrial Employment (Standing Orders) Act, 1946 was
examined in Bibhu Deb Roy v. JM Savery. 21 The grievance of the plaintiff was that he was
under suspension although there was no provision in the local staff manual of the company
for subsistance allowance permissible under Section 10-A. The Gauhati High Court held
that (z) The payment of subsistence allowance follows from suspension and an employee
cannot be deprived of this right; and (iz) For ends of justice, the principles laid down under
Section 10-A of the Industrial Employment (Standing Orders) Act, 1946 should be followed
in quantifying the payment of the amount of subsistence allowance per month.
In Automative Manufacturing Ltd v. Member, Industrial Court22, the Bombay High Court
while dealing with the scope of section lOA (1) held that the order of the Industrial Court
to pay 100 per cent subsistence allowance could not be sustained in view of Section 10-A
of the Industrial Employment (Standing Orders) Act, 1946. The Court, however, upheld
the direction of the industrial court to pay subsistance allowance on revised rate of salary.
In May & Baker Limited v. Kishore Jain Kishan Dass Icchaporie,2 3 the workman was
charge-sheeted for certain misconduct and was suspended from service. During the period
of suspension, he was paid suspension allowance as per the provisions of certified standing
orders applicable to the establishment. The workman filed an application before the labour
court under Section 13-A, contending that he was entitled to subsistence allowance under the
model standing orders, as amended under the Bombay Industrial Employment (Standing
Orders) Rules, 1959, being more beneficial. The labour court rejected the contention.
However, the single judge of the Bombay High Court, on a writ petition, reversed the order
of the labour court. The division bench of the Bombay High Court, on appeal, held that the
model standing orders, as also the certified standing orders are laws under the provisions of
the Industrial Employment Standing Orders Act, 1946 and not provisions 'under any other

18 Section lOA (1).

19 Section lOA (2).
20 Section lOA (3).
21 1993 Lab. IC 534.
22 (2009) 4 LLJ 153 (Born.).
23 1991 Lab. IC 2066.
 Role of Government Under the IESOA • 7 11

law'. The Court accordingly held that Section 10-A superceded in relation to the payment
of subsistence allowance over the provisions of the model standing orders.

Scope of Sub-section 2 of Section 1OA

In Vijaya Bank v. Shyamal Kumar Lodh24 the Supreme Court determined the scope of
sub-section 2 of section lOA (cited above). In this case the respondent, an employee of
appellant bank, filed an application before the labour court, Dibrugarh constituted by the
state government for an award computing his suspension/ subsistence allowance. The
appellant-bank challenged the jurisdiction of the labour court to adjudicate the dispute on the
ground that the said court has not been specified by the Central Government under Section
33 C(2) of the IDA, and therefore it had no jurisdiction to entertain the application. The labour
court rejected the contention. Thereupon, a writ petition was filed in High Court which held
that the labour court at Dibrugarh had not been specified by the Central Government and
therefore it had no jurisdiction to entertain the petition filed by the employee. It however,
added that as the branch of the bank where the employee was working fell within the limits of
jurisdiction of labour court in question, it shall have jurisdiction to decide the claim whether
labour court at Dibrugarh could have entertained the application under Section 10 of the
Industrial Employment (Standing Orders) Act. An appeal was then filed before the Supreme
Court. The Court observed that from a plain reading of the Section 10 A(2) of the aforesaid
Act, it is evident that the labour court constituted under the Industrial Disputes Act, 1947
within the local limits of whose jurisdiction the establishment is situated, has jurisdiction
to decide any dispute regarding subsistence allowance'. Referring to the case it observed:
in the present case, undisputedly dispute pertains to subsistence allowance and the labour
court where the workman had brought the action has been constituted under Section 7
of the Industrial Disputes Act, 1947 and further, the appellant bank is situated within the
local limits of its jurisdiction. The workman had, though, chosen to file application under
Section 33 C(2) of the Industrial Disputes Act but that shall not denude the jurisdiction of
the labour court, if it otherwise possesses jurisdiction. The Court further observed incorrect
label of the application and mentioning wrong provision neither confers jurisdiction nor
denudes the court of its jurisdiction. Relief sought for, if it falls within the jurisdiction of
the court, cannot be thrown out on the ground of its erroneous label or wrong mentioning
of provision. The Court accordingly held that the labour court, Dibrugarh satisfies all the
requirements to decide the dispute raised by the employee before it.

Effect of Non-payment of Subsistance Allowance

The Supreme Court in Capt. M Paul Anthony v. Baharat Gold Nines Ltd25 held that non-payment
of subsistence allowance is an inhuman act which has an unpropitious effect on the life of
an employee. When the employee is placed under suspension, he is demolished and the
salary is also paid to him at a reduced rate under the nickname of 'subsistence allowance'
so that the employee may sustain himself. The act of non-payment of subsistence allowance
can be linked to slow poisoning of the employee, who if not permitted to sustain himself on
account of non-payment of subsistence allowance, would gradually starve himself to death.

24 2010 (6) SCALE 300.

25 AIR 1999 SC 1416.
7 1 2 • Industrial Relations and Labour Laws

The Allahabad High Court in Municipal Board, Amroha v. UP Public Service Tribunal 26
ruled that non-payment of subsistence allowance during period of suspension would not
ipso facto render the order of removal invalid unless coupled with real prejudice.
The Rajasthan High Court in the case of RSRTC v. Dharamvir Singh,2 7 even liberalized
the prejudice concept and probably felt that non-payment of subsistence allowance, other
thing remaining the same, would only give a cause of action to the workman to claim the
arrears of subsistence allowance not paid to him by initiating separate proceedings. On
other limbs of this concept, if the employer denies the payment of subsistence allowance
in the event of the workman not marking his attendance during period of suspension, it
would not be proper.

Recommendation of the Second National Commission on Labour

The Commission has recommended that any worker who, pending completion of domestic
inquiry, is placed under suspension, should be entitled to 50 per cent of his wage as
subsistence allowance, and 75 per cent of wages for the period beyond 90 days if the period of
suspension exceeds 90 days, for no fault of the worker, however the total period of suspension
shall not, in any case, exceed one year. If as a result of continued absence of the worker at
the domestic inquiry or if the inquiry and disciplinary action cannot be completed in time
for reasons attributable wholly to the worker's default or intransigence, the employer will
be free to conduct the inquiry ex-parte and complete the disciplinary proceedings based
on such ex-parte inquiry and further, there would be no increase in subsistence allowance
beyond 50 per cent for the period exceeding 90 days in such cases.

26 (2001) 2 LLJ 1221.

27 (2003) (2) WLC 64 (Raj.).
 PARTV

WORKERS' PARTICIPATION IN MANAGEMENT

Workers' Participation
•
1n Management 30
Rapid industrial development and attainment of economic self-reliance are the two major
tasks which the country has set out to accomplish among others. 1 The key to achieve these
objectives is increased production. Output cannot be increased unless there is effective
cooperation between labour and management at all levels. The way of ensuring this is to
satisfy their social and psychological needs besides economic ones. Workers' participation
in management is one of the most significant modes of resolving industrial conflicts and
encouraging among workers a sense of belongingness in the establishment where they
work. It affords due recognition to the workers and enables them to contribute their best
in all round prosperity of the country in general and industrial prosperity in particular.
Moreover, in India which has launched a vast programme of industrialization, the need
for workers' participation is all the more important. It is in recognition of these needs that
under the Second, Third, Fifth and Seventh plans, specific measures have been suggested
for workers' participation. The last five decades have witnessed a striking development in
the arena of workers' participation. Although the institution of works committee consisting
of representatives of employers and workmen was provided as early as 1947 which sought
'to promote measures for securing and preserving amity and good relations between the
employer and the workmen and to discuss day-to-day problem of the industry', the scheme
of Joint Management Council, popularly known as workers' participation in management,
was introduced on voluntary basis only after over a decade. However, the scheme of joint
management council for various reasons could not succeed. In order to meet this unhappy
state of affairs and to secure greater measure of cooperation between labour and management
and to increase efficiency in public service, the Government of India on October 30, 1975
introduced a scheme of workers' participation in management at shop floor and plant levels.
In addition to these, there are voluntary schemes of making the workers shareholders and
directors in the board of management. The inclusion of the concept of workers' participation
in management in the Directive Principles of State Policy through the Constitution (Forty-

1 Government of India, Approaches to the Fifth Plan 1974-79, 1. (1973).

7 16 • Industrial Relations and Labour Laws

second) amendment, Act, 1976 gave a momentum to the institution of workers' participation
in management. After the constitutional Amendment, the Central Government expressed
its intention to amend the 1975-scheme and to provide for effective participation of workers
in production processes and accordingly amended the scheme in January 1977.
An analysis of the existing statutory and non-statutory schemes of workers' participation
in management reveals that the parties are dissatisfied and critical of the existing schemes.
It is, therefore, desirable to identify the framework of participation including the various
schemes of participation and the problems connected thereto.
This chapter seeks to examine and evaluate the working of various statutory and non-
statutory schemes of workers' participation in management in operation in Indian industries.

The Constitution (42nd Amendment) Act, 1976 makes a pioneering attempt to provide for
workers' participation in management in industry by suitable legislation in the Directive
Principles of State Policy. Thus, Articles 43-A of the Constitution (42 nd Amendment) Act,
1976 provides:

The State shall take steps, by suitable legislation or in any other way, to
secure the participation of workers in the management of undertakings,
establishments or other organizations engaged in any industry.
The principle underlying the inclusion of workers' participation in the Directive
Principles of State Policy is to give due recognition to the workers and to create among
them a sense of partnership. It being a constitutional imperative, the State is under an
obligation to take suitable measures, legislative or otherwise, to secure effective workers'
participation in management. But mere inclusion of constitutional or statutory provisions
would not serve the purpose. There is a need not only to evolve a suitable and workable
statutory scheme of workers' participation in industry but also a responsible trade union
and equally responsible and considerate management to fulfil the cherished objectives of
constitution-makers.

Workers' participation is a broad concept. It varies from country to country and industry
to industry.
Workers' participation has been differently viewed by sociologists, psychologists,
economists and lawyers. The sociologists view workers' participation as an instrument of
varying potentialities to improve industrial relations and promote industrial peace. The
psychologists consider participation as a mental and emotional involvement of a person in
a group situation which encourages workers to share managerial responsibility. 2 According
to them, workers' participation is a psychological process by which workers become self-
involved in an establishment and see that it works successfully. The economists think that
the real basis of workers' participation is higher productivity of labour and utilization

2 Keith Davas, Human Relations at Work.

 Worker's Participation in Management • 7 1 7

of collective experience of workers in order to advance the qualitative and quantitative

conditions of production. Lawyers, however, view workers' participation as a legal obligation
upon the management to permit and provide for involvement of workers of industrial
establishments through proper representation of workers at all levels of management in
the entire range of managerial action.
Being a dynamic subject, no rigid limits can be laid down for workers' participation for
all industries and for all times. It can be elastic enough to include workers' representation
even at the top level, namely board of directors. It can also be confined to the extremely
limited domain of consultation at the lowest level such as' to promote measures for securing
and preserving amity and good relations between the employer and workmen and to that
end, to comment upon matters of their interest or concern and endeavour to compose any
material difference of opinion in respect of such matters.' 3
Within the broad range mentioned above, the scope of workers' participation varies
from country to country not only in form but also in the degree of participation. Workers'
participation in management has been classified into five stages. These are informative,
consultative, associative, administrative and decisive participations, the extend of
each depending upon the quality of management and the character of the employee.4
KC Alexander5 has, however, suggested different modes of workers' participation viz., (i)
collective bargaining, (ii) joint administration, (iii) joint decision making, (iv) consultation,
and (v) information sharing. Issues over which the interests of workers and management
are conflicting such as wages, bonus, working hours, holidays and leave, etc., are amenable
through collective bargaining. On the other hand, issues over which both parties are equally
concerned, such as the efficient management of provident fund money, canteen, labour
welfare facilities, etc., would form subjects of joint administration, joint decision making
or consultation. The difference between joint administration, joint decision making and
consultation though narrow, is nevertheless significant. Whereas in joint administration
workers and management jointly share responsibility and power of execution, in joint
decision making, even though the two groups participate in deciding the policies, execution
is generally carried-out by the management. In the consultation form, the management
merely invites workers' opinion or suggestions on certain matters of common interest but
retains with itself the authority and responsibility of making decisions and executing them.
According to Kenneth F Walker 6, various forms of workers' participation in management
are ascending participation, descending participation, disjunctive participation and informal
participation. In ascending participation, workers may be given an opportunity to influence
managerial decision at higher levels, through their elected representatives to works
committee, shop or joint council or board of the establishment. In descending participation,
they may be given more powers to plan and make decisions about their own work. They
may participate through collective bargaining. They may also participate informally when,
for example, a manager adopts a participative style of supervision of workers. These and
other forms of participation have played a significant role in transforming the scope and
concept of workers' participation.

3 Section 3 of the Industrial Disputes Act, 1947.

4 VG Mehtas, Labour Participation in Management, 20-21.
5 KC Alexander, 'Workers' Participation in Management'. The Economic Times (1971).
6 Kenneth F Walker, Workers' Participation in Management in Practice: An I national Perspective. See
also, Thakur & Sethi, 'Industrial Democracy: Some Issues and Experience'.
7 18 • Industrial Relations and Labour Laws

Since independence, various schemes have been formulated by the Government of India to
encourage workers' participation in management, which are briefly given below.

A. Works Committee7
The scheme of joint consultation received legislative approval in 1947 when the government
enacted the Industrial Disputes Act, 1947. Though a large number of committees were set
up, the result of works committee were not commensurate with expectations. 'Experience
has shown that a major hinderance in the way of effective functioning of works committees
is the lack of clear-cut demarcation between committees' responsibilities and responsibilities
of trade unions operating in the field.

B. Joint Management Council

In 1958, joint management councils were introduced. The JMCs were entrusted with the
administrative responsibilities for various matters relating to welfare, safety, vocational
training, preparation of schedule of working hours and holidays. There were to be consulted in
matters of change in work operation, general administration and alteration in standing orders,
rationalization, closure, etc., to encourage smooth work operations and enhanced productivity.
The JMCs should consist of equal nwnber of representatives of management and workers.
Representation of workman to the JMCs was based on nominations by recognized trade unions.
JM Cs did not receive much support from unions or management. It was alleged that
JMCs and works committees appeared similar in scope and function and that multiplicity
of bipartite consultative bodies served no purpose and where the membership strength of
unions were disputed, composition of the council became a contentions issue. 8

C. The 1975-Scheme of Workers' Participation in Industries

1. The Need
The introduction by the Government of India of the scheme of workers' participation
in industries at the shop and floor levels on October 30, 1975 opened a new chapter in
the history of employer-employee relations in Indian industries. The other consultative
machinery now existing are works committees and joint management councils. While the
former is statutory and has been set up under the Industrial Disputes Act, 1947, the latter
scheme like the present one is non-statutory. This scheme has been formulated to make the
worker realize that he is a conscious participant in the society's apparatus of production. 9
A feature of the scheme is that there is no legal sanction. Further, it provides that the
shop council should be set up at floor level and joint council at plant level. Moreover, the
scheme has been designed to be a flexible one so as to allow variations to suit local conditions
and for the system to work properly. The scheme also provides for its implementation
through executive action.

7 For details see Chapter 17, Section I.

8 See Government oflndia, Report of the (First) National Commission on Labour (1969), 345.
9 Government oflndia, Indian Labour Journal, 1148 (1976).
 Worker's Participation in Management • 7 19

2. Scope and Coverage

The scheme applies in manufacturing and mining industries (whether in public, private
or cooperative sector, including deparbnentally-run enterprises) employing 500 or more
persons. In practice it is, however, found that though the scheme is confined to onl{o
manufacturing and mining industries, some other industries have also accepted the scheme. 0
In 1977, the government extended the scheme to commercial and service organizations
of the public sector. Some states have extended the application of this scheme even in
establishments employing less than 500 workers. For instance, Punjab has extended the
scheme in establishments employing 200 or more workers.

3. Shop Council
a. Constitution. The scheme requires every industrial unit covered under the scheme to
constitute shop council for each deparbnent or shop, or one council for more than one
deparbnent or shop, depending upon the number of workmen employed therein. This
would also include units run deparbnentally, whether or not joint management council was
functioning in such units. The number of shop councils and deparbnents to be attached to
each council of the undertakings or the establishments shall be determined by the employer
in consultation with the recognized union or the various registered trade unions, or with
workers in accordance with the local conditions.
The council shall consist of equal number of representatives of employers and workers
not generally exceeding 12. The scheme, however, does not provide any minimum limit.
The employer's representatives are to be nominated by the management from amongst the
personnel of the unit concerned. The workers' representative would be taken from amongst
the workers actually engaged in the deparbnent or shop concerned.
b. Method of Working. The Council shall have among its office-bearers a chairman and a
vice-chairman. The chairman of the council is to be nominated by the management. The
vice-chairman is to be elected by the workers' representative on the council. The term of the
representative of the committee is 2 years and it should meet at least once in a month. The
scheme also provides the manner in which the vacancy of a member of the council would
be filled. All the decisions of council shall be taken on the basis of consensus and not by
process of voting; but in case no consensus or agreement is reached, either party is allowed
to refer the same to the joint council for consideration and decision. The concerned parties
are required to implement the decision of the shop council within a period of one month
unless otherwise stated therein. However, if the decisions of the shop council have a bearing
on another's shop or the undertaking or establishment as a whole, they will be referred to
the joint council. But this again raises a question as to what would happen in case the parties
failed to implement the unanimous decision of the council. The scheme is silent on it.
c. Functions of the Shop Council. The main function of the shop council is to increase
production, and overall efficiency of the shop or deparbnent in the following matters:
(i) Assist management in achieving monthly /yearly production targets;
(iz) Improvement of production, productivity and efficiency including elimination of
wastage and optimum utilization of machine, capacity and manpower;

10 The Tribune, January 1, 1976, 1.

720 • Industrial Relations and Labour Laws

(iii) Specifically identify areas of low productivity and take necessary corrective steps at
shop level to eliminate relevant contributing factors;
(iv) To study absenteeism in shops, deparbnents and recommend steps to reduce them;
(v) Safety measures;
(vi) Assist in maintaining general discipline in the shop/ deparbnent;
(vii) Physical conditions of working, such as lighting, ventilation, noise, dust, etc., and
reduction of fatigue;
(viii)Welfare and health measures to be adopted for efficient running of the shop/
deparbnent; and
(ix) Ensure proper flow of adequate two-way communications between the management
and the workers, particularly on matters relating to production figures, production
schedules and progress in achieving the targets.

4. Joint Council
a. Constitution of Ioint Council. Under the scheme, every industrial unit employing 500 or
more workers is required to constitute a joint council for the whole unit. The constitution of
the council is on the pattern of shop council, which we have discussed earlier.
b. Method of Working. The joint council shall have a chairman, a vice-chairman and a
secretary. The chief executive of the unit shall be the chairman of the unit. The vice-chairman
is to be nominated by the workers' representative of the council. The joint council shall also
appoint one of its members as secretary. It is, however, not mentioned in the scheme as to
whether the secretary would be chosen from amongst workers or employers' representatives
or by rotation. The tenure of office of council shall be 2 years, and the council is required
to meet at least once in a quarter.
The scheme envisages that all decisions of the council shall be taken on the basis of
consensus, and not by a process of voting. There seems to be a lacuna in the scheme. It is
not clear as to what would happen in case no consensus or agreement is reached in the
joint council. Under the circumstances, it is suggested that in such a situation, the power to
decide such questions should be left upon the board of management. In such cases, there
should invariably be a workers' representative on the board and he should have a say at
the decision-making level. The scheme also provides that the decision shall be binding
on the parties and shall be implemented within one month unless otherwise stated. This
again raises a question as to what would happen if the parties are unable to implement the
unanimous decision of the council.
c. Functions ofToint Council. The main function of the joint council is to deal with matters
relating to '(i) optimum production, efficiency and fixation of productivity norms of man
and machine for the unit as a whole; (ii) functions of a shop council which have a bearing
on another shop or the unit as a whole; (iii) matters emanating from shop council which
remain unresolved; (iv) matters concerning the unit of the plant as a whole, in respect of
matters relating to work planning and achieving production targets; more specially tasks
assigned to a shop council at the shop/ deparbnent level but relevant to the unit as a whole
will be taken up by the joint council; (v) the development of skills of workmen and adequate
facilities for training; (vi) the preparation of schedule of working hours and holidays; (vii)
giving rewards for valuable and creative suggestions received from workers; (viii) optimum
use of raw materials and quality of finished products; and (ix) general health, welfare and
safety measures for the unit or the plant.'
 Worker's Participation in Management • 7 21

5. Operation and Assessment of the Scheme

The scheme of workers' participation which was introduced by the Government of India is
voluntary and not compulsory. The reason for this seems to be the readiness on the part of
employers of the establishments covered under the scheme to voluntarily implement the scheme
and to accept the idea even without ascertaining the defects or practicability of the scheme. This
is a very healthy trend. Some states have, however, made the scheme compulsory .11 There is yet
another state which has even taken statutory measures to implement the scheme. 12

D. Verma Committee (1977-78)

In pursuance of the recommendation of the tripartite labour conference, Government of India
constituted a Committee on Workers Participation in Management under the chairmanship of
Shri Ravindra Verma, the then Minister of Labour and Parliamentary Affairs. The Committee
recommended that the experience of voluntary schemes of participative management in the
past had not been very happy. It was essential to introduce the scheme through legislation
and it should be flexible. The Committee favoured the adoption of a three-tier system of
participation at corporate level, plant level and shop-floor level. The scheme of participation
would be introduced in undertakings employing 500 or more workers with an enabling
provision to extend it to others employing at least 100 workers. It was recommended that
10 per cent of all new shares should be reserved exclusively as workers' share and should
be offered first to the workers of that company. It was suggested that an organization both
at centre and in the states be constituted to monitor the implementation of the scheme of
workers' participation in management and also to review its working.

E. The 1983-Scheme of Workers' Participation in Management

A new comprehensive scheme of workers' participation in management was notified by
the Government of India on 30 December, 1983. The scheme is applicable to all public
sector undertakings. The state governments and private sector enterprises have also
been asked to implement the scheme. A committee consisting of representatives of the
employing ministries, state governments, central public sector enterprises, central workers'
organizations and representatives of private sector manufacturers' organizations was set
up in August, 1984 to monitor the progress in the implementation of the scheme. According
to 1987-88 (Annual Report of the Ministry of Labour) as per the information available, 100
public sector enterprises have adopted the scheme of December 1983 at shop floor and plant
levels. Another 33 public sector enterprises have implemented their own scheme/variant of
scheme notified by the government. About 64 public sector enterprises have not been able
to implement the scheme. Majority of large enterprises employing large number of persons
and with larger invesbnents, like SAIL, BHEL, IOL, HMT and Cement Corporation of India
have implemented the scheme. No enterprise has implemented the scheme at board level.
However, the scheme has no legislative backing. The workers and management have
equal representatives in the shop/ plant forums.

11 For instance, Orissa has made the scheme compulsory for state owned industrial undertakings. See
The Tribune, January 12, 1976, 4.
12 The Centre has approved the Rajas than Government draft legislation on giving representation in
joint management council employing 500 or more workers in the State. (See Indian Express, January
20, 1976, at p 7).
722 • Industrial Relations and Labour Laws

A. General
The other method of involvement of workers in industries is to make them shareholders in the
company. This may be done by allotting shares to workers and inducing them to buy equity
shares. The management may promote the scheme by allowing workers to make payments
in instalments. The company may also advance loan or even give financial assistance to
such workers to enable them to purchase shares. The idea underlying the scheme is that
workers can take more interest in the company for which they are working. This scheme
was mooted in a background paper at one of the Indian Labour Conferences. According
to the official spokesmen, the scheme would create a sense of partnership among workers
and make them feel that they have certain interests in the concern to which they belong.
It has also been asserted that by becoming shareholders, a sense of attachment will follow
among workers and this will prompt them to work with dedication and sincerity for the
prosperity of the establishment.

B. Working of the Scheme in Indian Industries

As an experimental measure, the scheme of making workers shareholders was introduced
in Sehgal Sanitary Fittings near Jullundur and 40 per cent of shares were allotted to workers.
It has been found that the concern was doing well and was exporting goods and earning
good profits. 13 Similar experiment was also made in Rajasthan Spinning & Weaving Mills
Ltd. Another private sector firm, a heavy machinery manufacturing firm in Rourkela has
introduced a scheme known as Employees' Share Participation Loan Scheme.14 The Tamil
Nadu Government also introduced a scheme of giving up to 24 per cent equity capital
to the workers in the state-owned Cheran Transport Corporation and referred to it as a
progressive step on the socialist path. 15 It proposed to extend the scheme to other transport
corporations.'16 Similarly, the State Trading Corporation, a public sector undertaking,
offered equity shares to its employees in order to create a greater sense of involvement in
the corporation. 17

A. General
One of the effective methods of inducing among the workers a sense of partnership and
belongingness to the establishment is to involve them at the highest level of management
namely, by giving them representation on the board of directors. It is claimed that this
scheme will satisfy the ego of workers and will give them greater opportunity to realize
their responsibility towards the industry in which they are employed.

13 D Sanjivayya, Labour Problems and Industrial Development in India, 51 (1970)

14 The Economic Times, 1975.
15 MR Meher, 'Making Workers Shareholders,' Indian Management, November 1974, 39.
16 Ibid.
17 See The Economic Times, November 14, 1976, 1.
 Worker's Participation in Management• 723

Subsequent to the nationalization of banks, under the Nationalized Banks (Management

and Miscellaneous Provisions) Scheme 1970, the government required all nationalized
banks to appoint employee directors to their boards, one representing workmen and the
other representing officers. The scheme required verification of trade union membership,
identification of the representative union and the appoinbnent of a worker director from a
panel of three names proposed to the government by the representative union. The tenure
of an employee director was to be 3 years.
This was the first major attempt to place representatives of workman on boards
of public sector industries. The verification of membership continues to remain a major
difficulty and process of appoinbnent has been delayed. In retrospect, it is also evident
that while the scheme clearly laid down procedure for appoinbnent, etc., there was no
clear enunciation of objectives of such participation or of the role and functions a workers
director had to fulfill.

B. Working of the Scheme

The Government of India on an experimental basis introduced a scheme for appointing workers'
representatives on the board of management in two public sector undertakings,18 viz., Hindustan
Antibiotics Ltd, Pimpri and Hindustan Organic Chemicals Ltd, Kolaba. The scheme envisages
that the council will do its best to resolve problems at the shop floor level but in case no consensus
or agreement is reached, the same will be referred to the board of management. The workers'
representative is to be nominated by the recognized union in the undertaking who is required 'to
submit a panel of name of three persons from whom one person is to be selected for nomination
as director. For being eligible for nomination a person should have attained the age of 25 years,
should have a minimwn of 5 years' service in the undertaking and should not attain the age of
superannuation during his tenn of appoinbnent as director.'19
The working group of the Administrative Reforms Commission also considered
the feasibility of statutory representation of workers on the board of management of the
companies. The Commission observed:

..... the time had not yet arrived for any such provision in our law. Nor did the
demand for such representation on the board of management of companies
appear to be particularly strong or insistent.
We are inclined to take the view that it is only after further improvements have been
made in workers' right and more systematic and comprehensive use has been made of a wide
range of joint determination within an enterprise in its day-to-day activities that statutory
representation of workers in management of companies whether at the top (board), middle
(executive management) or lower (shop floor) levels can be considered. Before any attempt
is made to provide for statutory representations of the workers at any desired levels in
company management, efforts should be made to improve the education and training of
workers for some of the elementary tasks of management.
We do not consider that it is necessary at present to provide in the Companies Act for
compulsory representation of workers at any level of management. But it is our hope that
it may be possible for the management of companies to increasingly associate the workers'

18 See The Hindustan Times, September 1, 1976.

19 See Government oflndia, Annual Report (Vol. I) 1975-76 of the Ministry of Labour, 148 (1976).
724 • Industrial Relations and Labour Laws

representatives particularly at the shop floor level so that all managements' decisions that affect
the interest of workers can be taken in the full light of discussion with workers' representative.20
c. Conflict/Confusion. The appoinbnent of workers as directors on the board of
management raises several issues: First, selection of workers to the board of directors would
lead to many complications. Various pressure groups inside and outside the union will also
claim representation on the board. Further, political affiliation of the trade union is likely to
complicate the situation. Second, the role of workers' directors will create difficult situations
for the labour leader who will occupy such position. They would be misunderstood and
misrepresented by both the labour and the management. It may also broaden gap between the
workers and workers' director and ultimately workers' director will not have control over the
workers whom he represents on the board. Third, workers will be primarily interested only
in matters relating to or affecting employment, non-employment, terms of employment and
conditions of service of any workman and they will hardly participate in other management
functions of the concern as they will have neither knowledge nor interest in other activities.
Matters relating to invesbnent planning, production, sales, price policies, etc., will be of no
interest to the labour leader. Fourth, it is difficult to say how far the workers' director will
share the responsibility of the industry jointly with other members of the board for matters
adversely affecting the working class. Fifth, nomination of one or two workers' representatives
in the board of management would place them in minority while the decision would be taken
by the majority. Sixth, multiplicity and rivalry among trade unions would lead to difficulties
in selection of trade union. Further, the absence of statutory provisions for recognition of
trade union would also make the selection of workers' representative difficult.

A milestone in the area of workers' participation in winding up proceedings was reached with
the pronouncement of a majority judgement of the Supreme Court in National Textile Workers
Union v. PR Ramakrishnan.21 Here, the Supreme Court, by a majority of 3 as against 2 ruled
that merely because the right to apply for winding up a company is not given to the workers,
it does not mean that they cannot appeal to support or oppose a winding up petition under
Section 439 of the Companies Act. To deny the participation of the workers in the winding
up proceedings would, according to the Court, violate the basic principle of fair procedure.
Further, to hold that the workers, who have contributed to the building of the enterprise,
have no right to be heard in the winding up proceedings would lead to demolition of the
centre of economic power. In view of this, the Court held that: (z) the workers are entitled to
appear at the hearing of the winding up petition whether to support or to oppose it so long
as no winding up order is made by the Court; (iz) the workers have a locus to appear and be
heard in the winding up petition both when the winding up petition is admitted and when an
order for advertisement is made as also after the admission and advertisement of the winding
up of the company: (iii) if a winding up order is made and the workers are aggrieved by it,
they would also be entitled to prefer an appeal and contend in the appeal that no winding up
order should have been made by the company; and (iv) the workers have a right to be heard
even when an application for appoinbnent of a provisional liquidator is made in a winding

20 Government of India, Report of the Working Group on Company Law Administration, Administrative
Reform Commission (1968), 39-40.
21 (1983) 1 sec 228.
 Worker's Participation in Management • 7 25

up petition, because the appoinbnent of a provisional liquidator may adversely affect the
interest of the workers.
Justices Venkataramaiah and AC Sen on the other hand, refused to concede any such
right to the workers or their trade unions since they have not been given any right under the
Companies Act. Venkataramaiah was of the view that once this right is conceded to workers,
there would be no stopping point. He felt that there is no reason why such a right be not
available to others like agents, dealers, consumers and the local community. Moreover, the
workers have at their disposal the Industries (Development and Regulation) Act, 1951 under
which they can ask the Central Government to take over their unit which is facing winding
up. Sen was also not in favour of giving to employees the right to appear and convey their
point of view to the Court particularly where it is of opinion that a proper disposal of the
matter would require consideration of workers' position also.

Navneet R Kamwni v. RR Kaniani22 is an epoch-making judgement on the workers' right to

run sick units. Here the Supreme Court, for the first time, conceded the demands of workers
to own and manage a sick industry. The Supreme Court also reduced the value of ~10 per
share to ~1 per share and directed the transfer of shares to the employees.
The aforesaid line of thinking found expression in the summary of recommendations of
the Inter-Ministerial Group on Industrial Restructuring wherein it is recommended that sick
units which are taken over by workers' cooperatives should be provided special concessions
by the central government, financial institutions, banks and the state governments. Besides
writing-off loans, National Renewal Fund can be utilized to provide equity to units managed
by workers' cooperatives.

On 30 May, 1990 the aforesaid Bill was introduced in Rajya Sabha. Three reasons have been
advanced for the introduction of such a bill, namely (i) It is a step required to be taken under
Article 43 of the Constitution; (iz) The non-statutory schemes for workers' participation
in management failed to provide an effective framework for meaningful participation of
workers in management at all levels; and (iii) The statutory Works Committee has been
proved to be ineffective.23
The Bill abolishes the institution of works committee under Section 3 of the Industrial
Disputes Act, 1947.
The proposed Bill extends to whole of India. 24 It shall come into force on such date as
the Central Government may notify. But the Central Government is required to give not
less than three months' notice of its intention so to do. However, the Central Government
may fix different dates of application of different provisions of the Act and for different
classes of industrial establishments.25

22 AIR 1989 SC 9.
23 See Statements of Objects and Reasons.
24 Section 1(2).
25 Section 1(3).
726 • Industrial Relations and Labour Laws

A. Constitution of Council
The Bill requires every industrial establishment to constitute one or more 'shop floor
council' at the shop floor level26 and an' establishment council' at the establishment level. 27
However, no 'shop floor council' is required to be constituted in an establishment having
only one shop floor.
The shop floor council and establishment council shall consist of equal number of
representatives of employer and workmen. 28 The number of representatives of employer
and workmen is required to be determined by the appropriate government in consultation
with the employer.

B. Mode of Representation
The employer's representatives should be nominated by the employer in the prescribed
manner. 29 The workmen's representatives are either required to be elected from amongst
the workmen of the industrial establishment by secret ballot or nominated by registered
trade unions, in accordance with the scheme. 30
The aforesaid provision suffers from various defects: (z) It has failed to bring a uniform
scheme for the mode of representation of workers in the council; (iz) It will bring rivalry
among trade unions in those establishments that have more than one registered trade union
and no recognized trade union; (iii) It has failed to provide any criteria for the nomination
of representatives in establishments having more than one registered trade union; (iv) It
does not lay down the qualifications of the representatives of workmen.

C. Method of Working
Shop floor council and establishment council shall have a chairperson. The chairperson is
to be chosen by and from amongst the members of the council. 31 The terms of the members
shall be 3 years from the date of the constitution of the council. 32 The use of the expression
'date of the constitution of council' is deceptive. It is submitted that it should be read as
date of nomination/election. However, a person representing the workmen shall cease to
be a member when he ceases to be a workman in that establishment and such vacancy shall
be filled in the prescribed manner. The vacancies of other members or chairperson shall be
filled in accordance with the scheme. Every council in discharge of its functions and conduct
of its business shall follow such procedure as laid down in the scheme. 33 The meeting of the
Council should be held as and when necessary but not less than 4 times in a year. 34

26 See clause 2(h).

27 Section 4(1).
28 Section 4(3).
29 Section 4(5).
30 Section 4(6).
31 Section 4(7).
32 Section 4(8).
33 Section 2(9).
34 Section 2(10).
 Worker's Participation in Management • 7 2 7

D. Reference
Where a matter under consideration before a shop floor council or establishment council is
beyond its jurisdiction, a reference shall be made to the establishment council or the board
of management respectively. However, on failure of agreement on any matter between
representatives of employer and workmen's representatives, such matter shall be referred
to the employer for his decision. 35 This provision places the employer on a superior position
and is likely to be abused.

E. Powers and Functions of Shop Floor Council

A shop floor council shall exercise such powers and function as it deems necessary in
relation to (i) production facilities, (iz) storage facilities in a shop, (iii) material economy,
(iv) operational problems, (v) control, (vi) hazards and safety problems, (vii) quality
improvement, (viii) cleanliness, (ix) monthly targets and production schedules, (x) cost
reduction programmes, (xi) formulation and implementation of work system, (xii) design
group working and (xiii) welfare measures related particularly to the shops. 36

F. Powers and Functions of Establishment Council

The establishment council has been conferred with wide powers and functions. These relate
to operational areas, economic and financial areas, personnel matters, welfare areas and
environmental areas.

G. Board of Management
One of effective methods of inducing among the workers, a sense of partnership and
belonging to the establishment is to involve them at the highest level of management
namely, by giving them representation on the board of management. 37 This is likely to
satisfy the ego of workmen and give them greater opportunity to realize their responsibility
towards the establishment in which they are employed. In order to meet the aspiration of
workers and greater involvement in the management at the highest level, the Bill provides
for the constitution of board of management of every body corporate owing an industrial
establishment or establishments. 38

H. Representation of Workmen and Other Workers

The Bill provides for 25 per cent representation of 'workmen' and 'other workers' employed
in that establishment on the board of management. 39

35 Section 4(1).
36 Section 5(1) read with Schedule 1.
37 'Board of Management' by whatever name called means 'body which is entitled to exercise all or
any of the powers and to do all or any of such acts and things as the body corporate is authorized
by law under which it is incorporated, to exercise and do in relation to the industrial establishments
owned by it' [See Section 2 (b)].
38 Section 6.
39 Section 6(1).
728 • Industrial Relations and Labour Laws

The persons representing 'workmen' and 'workers' shall constitute 13 and 12 per
cent respectively of the total strength of such board of management. 40 However, in case of
fraction of a number, such number shall be rounded off to the nearest whole number and,
for this purpose, where such fraction is one-half or more, it shall be increased by a whole
number and if such fraction is less than one-half, it shall be ignored.
The board of management shall include at least one workman where the total strength of
the board of management is not sufficient to give representation to any workman on the board.41

I. Mode of Representation of Workmen and Other Workmen

The representatives of'other workers' shall be elected by and from amongst the other workers
of the establishment/ establishments by secret ballot. 42 The workmen's representative shall be
elected by and from amongst the workmen of the industrial establishment or establishments
by secret ballot, or nominated by the registered trade unions. 43 From this, it is evident that
the Bill adopts different standards for the representatives of 'other workers' and 'workmen'.
While the 'other workers' are to be elected by secret ballot, the representatives of workmen
are either to be elected by secret ballot or nominated. This provision raises significant
questions. How should the representative be chosen for establishments having more than
one registered trade union? Can an establishment having a recognized trade union nominate
the representative? It is submitted that the essential requirement of successful functioning
of the board of management is the existence of a recognized trade union. It is this union
alone which should nominate the representative of workmen.

J. Term of Workers' Representatives

Under Section 6 (4), the term of the officer or representatives of 'workers' is 3 years from
the date of constitution of the board of management. 44 However, a person representing the
workmen or other workers shall cease to be a representative on the board of management
when he ceases to be a 'workman' or 'other worker' in an industrial establishment owned
by the body corporate. The vacancy, so caused, shall be filled in the prescribed manner. 45
A perusal of the aforesaid provisions reveals that unlike Clauses (1), (2) and (3),
Clause (4) of Section 6 uses the term 'workers' instead of 'workmen' and 'other workers'
and thereby creates confusion. Further, 3 years from the date of constitution of the board
of management raises a question as to whether board would be constituted after every 3
years. It is submitted that this provision should be amended to read as 3 years from the
date of nomination/election.

K. Powers and Functions

The workers' representative is empowered to exercise all the powers and discharge all the
functions of a member of the board of management. He shall also be entitled to vote. 46 Quite

40 Proviso to Section 6(1).

41 Section 6(1).
42 Section 6(2).
43 Section 6(3).
44 Section 6(4).
45 Proviso to Section 6(4).
46 Section 6(5).
 Worker's Participation in Management• 729

apart from these powers and functions, the board of management is required to review
the functioning of the shop floor council and the establishment council of the industrial
establishment or establishments concerned.47

L. Enforcement of the Act

1. Penalties for Offences

The enforcement of the Act implies that there are specific penalties in case of violation of the
provision of the Act. The Participation of Workers in Management Bill, 1990, therefore provides
for penal provision. Thus, Section 7 provides that if any person contravenes any of the provisions
of the Act or the scheme made thereunder, he shall be punishable with imprisonment for a
term which may extend to 2 years, or with fine which may extend to f20,000, or with both.

2. Offences by Companies
If an offence under the Act is committed by a company, every person, who at the time
when the offence was committed was in charge of, and was responsible to the company for
conduct of the business of the company is liable. 48 However, no person shall be liable if he
proves that the offence was committed without his knowledge or that he exercised all due
diligence to prevent the commission of such offence.49 But the liability lies on the director,
manager, secretary or other officer of the company, for any offence committed under the
Act unless it is proved that the offence was committed with the consent, connivance or
neglect of any officer concerned.

3. Cognizance of Offences
Section 9 provides that no court shall take cognizance of any offence punishable under the
Act except on a complaint made by or under the authority of the appropriate government.

M. Administration of the Act

The effectiveness of law lies in its implementation. Its non-enforcement is the negative aspect
of such instrument of social control. Under the Participation of Workers in Management
Bill, 1990, the Central Government is the appropriate government for the administration of
its provisions in relation to an industrial establishment. The Central Government is also the
appropriate government in relation to an industrial establishment carried on by a company
in which not less than 51 per cent of the paid-up share capital is held by Central Government
and in relation to an industrial establishment owned by a body corporate having industrial
establishment in more than one state. For other establishments, the state government in
which such other establishments are situated is the appropriate government.50
For administration, the Act provides for inspection machinery and for a monitoring
committee. However till July 1999, it has not received the colour of the Act.

47 Section 6(6).
48 Section 8(1).
49 Proviso to Section 8(1).
50 Section 2(a). See also Financial Memorandum.
730 • Industrial Relations and Labour Laws

N. An Appraisal
A perusal of Sections 8 and 9 reveals that unlike Section 7, these provisions do not specifically
include offences committed under any scheme made under the Act. Further, the Bill does
not provide for enhanced punishment in cases of previous conviction.

The Government of India convened the 11th meeting of the Tripartite Committee on
Employees' Participation in Management on 3 October 1997 with the object of revising
the Employees' Participation in Management Scheme, 1983 which is currently operating
in central public sector undertakings. Earlier, in February, 1996 under the Plan Scheme
for Education and Training in order to promote employees participation in management
f45,000/- were released to the Central Board for Workers' Education to conduct training
programmes.

It is felt that 'workers' participation in management introduced statutorily through the

institution of works committee under Section 3 of the Industrial Disputes Act has not been
successful.51 Further, 'the voluntary schemes introduced in 1975, 1977 and 1983 have also
not found many takers.' 52 In view of this, the Second National Commission on Labour
observed that the time has come for the government to enact a law to provide for participatory
management at all levels keeping in mind the necessity to ensure that the responsibility and
freedom to take managerial decisions are not fragmented to the detriment of the enterprise,
the social partners or society at large. It accordingly recommended that the proposed Act
be initially applicable to all establishments employing 300 or more persons. For smaller
establishments, a non-statutory scheme may be provided. The system of recognition for the
bargaining agent, as also the information available under the check-off system will furnish
enough data to select representatives of workers at each tier of participation.

51 Govt. oflndia, Report of the (Second) National Commission on Labour, Vol. I (2002) p 1301.
52 Ibid.
Index
A C
Absenteeism, 24 Child labour, 25
Adjudication, 306-321 Child Labour (Regulation and Abolition)
composition of labour courts and Act, 1986, 26, 34
tribunals, 308 Closure,540
origin and growth, 307 closure compensation, 544, 545
All India Trade Union Congress (AITUC}, 61 closure of a portion of an undertaking, 542
Appropriate government, 11,361 constitutional validity of Section 25-FFF, 541
concept of, 708 constitutional validity of Sections 25-o
delegation of power, 395,708 and 25-R, 551
determination of, 365 enforcement of Section 25-FFF, 546
power to exempt, 396 penalty for, 550
power to make rules, 394, 708 restrictions on industrial establishments, 547
approval of legislature, 709 scope of proviso to Section 25-0(1), 549
frame model standing orders, 708 scope of Section 25-0(3), 549
procedure and fee, 708 Collective bargaining, 147
Award,321 advantages and disadvantages of, 152
confidential matters, 323 concept and meaning, 148
constitutionality of section 17(2) and 17a, 340 duration of, 150
constitutional remedies, 350-353 objectives of, 150
enforcement of, 331 parties to, 149
finality and enforceability of, 338 subject matter of, 149
forms of, 323 ILO principles on the right to, 148
interim, 322 in India, 152
judicial interpretation, 321 factors affecting collective bargaining, 154
language of, 323 plans and, 152
pendency of proceedings, 328 response of 1st NCL, 153
period of the operation, 329 perspective, 147
prerequisites for, 150
payment of full wages pending
proceedings, 342 Companies Act, 1956, 83
publication of, 325 Compulsory Education Act, 2009, 42
signing of, 323 Conciliation, 277
submission of an, 323 authorities, 278-279
constitution of, 278
B duties, 280
Badli workers, 515 powers of, 279
Bandh,412 proceedings, 285
illegal and unconstitutional, 412 general, 277
nature and concept of, 412 settlement in, 287
no work no pay for absence during, 413 Contract Act, 1872, 127
732 • Index
Contract Labour (Regulation and Abolition)
Act,34,42
Constitution (42nd Amendment) Act 1976, 37,716
Constitution (Eighty-third Amendment)
Bill, 1997, 41
Constitutional amendment on right to free and
compulsory education, 41
Constitutional perspective, 37
constitutional guarantee, 38
directive principles of state policy, 37
distribution of power, 39
lists, 40
preamble, 37
Constitutional validity of service contracts and
standing orders, 48
application of labour laws to minority
educational institutions, 52
validity of certified standing orders, 50
validity of service rules and
regulations, 48
Contract Labour (Regulation and Abolition)
Act, 186
Co-operative Societies Act, 1912, 83
Court of inquiry, 297
constitution, 297
duties, 297
jurisdiction of, 297
Criminal Law (Amendment) Act, 1932, 155
Criminal proceedings, 459
court of competent jurisdiction, 459
permission of the government, 458
D Economic coercion, 397
Disciplinary action, 559
tribunals' intervention, 560
Disciplinary procedure, 570
charge-sheet, 572
guideline for framing, 573
service of, 574
principle of natural justice, 570
Audi Alteram Partem or rule of fair
hearing, 571
requirements of the, 572
rule against bias, 571
suspension pending inquiry, 575
Discharge,563
discriminatory treatment, 621
interference with a quantum of
punishment, 598
nature and concept, 563
powers of high courts under
article 226, 621
relief to wrongly dismissed workmen, 623
compensation to, 632
current judicial approach, 633
relief of back wages, 629
when to direct reinstatement, 624
right of the employer to adduce
evidence, 597
specific facts/ situations, 600
Dismissal, 563
bona fides of management's action, 565
loss of confidence, 569
power of courts and tribunals to
workmen, 595
scope of intervention, 564
Domestic enquiry, 576
applicability of the Evidence Act, 585
effect of delay and power to conduct, 590
effect of defective date, 594
non-supply of report, 591
pending criminal proceedings, 585
right of representation in disciplinary
proceedings, 583
right to be defended by a lawyer, 582
time-limit for completion of, 709
E
Employee, 15
Employees Insurance Act, 6
Employees Provident Fund and Miscellaneous
Provisions Act, 1952, 6,154,482
Employees' State Insurance (Amendment)
Act, 2010, 67
Employers' and Workmen's Disputes
Act, 1860, 169
Employment of Children Act, 1938, 42
Equal Remuneration Act, 34, 42
Essential Services Maintenance Ordinance
(ESMO}, 1960, 437
Establishment, 15

F immunity jeopardizes community's
Factories Act, 1948, 26,154,481
Factories Act, 1881, 58
Forced labour, 44
forma pauperis, 83
Form of consent, 319
G decision details, 195
General Clauses Act, 97
Gherao, 122
an instrument of physical coercion, 411
nature and concept of, 411
Government's power of reference, 361
Audi Alteram Partem rule, 388
choice,375
conditions precedent, 364
controlled industry, 365
court's power to issue directions, 391
dispute must exist or be apprehended, 372
legislative scheme, 361
nature and scope of desertion, 375
power to make, 383
reference should be clearly spelled out, 383
refusal to make reference, 384
time limit for making reference, 385
Government's power to withdraw or transfer
proceedings, 392
Government's power to refer question for
interference, 392
context, 392
fresh evidence, 394
judicial response, 393
Grievance settlement authorities, 275
grievance redressal machinery, 276
H Ind us trial Disputes (Amendment and
Heterogeneity, 23
Hindu Religious and Charitable Endowment
Act, 1951, 80
Hospital and other Institutions (Settlement of
Disputes) Bill, 1982, 131
I certifying officers, 687
Illiteracy, 23
Immunity, 117
from civil actions, 121
Index• 733
interests, 118
nature of, 120
only a fraction of labour force protected, 117
Industrial dispute, 191
amendment to section 2(a}, 203
judicial legislation, 191
legislative response, 199
Section 2 (15) of the Industrial Relations
Bill, 1978, 200
meaning of, 179
no time limit prescribed, 202
origin of, 186
parties to, 182
recommendations of 2nd NCL, 202
remedy to individual workman, 203
subject matter of, 183
Industrial Disputes Act (1947), 15, 29, 52, 64, 79,
119, 154,193,288,398,414,427,476,480,489,
595,635
object of, 170
scheme of, 171
scope of, 174
Industrial Disputes (Amendment) Act, 1976,474,
517,550
Industrial Disputes (Amendment) Act, 1982, 159,
162, 172,231,342
Industrial Disputes (Amendment) Act, 1984, 517
constitutionally of Section 25-N, 519
nature of Section 25N (6) Proviso 25-0, 520
Industrial Disputes (Amendment) Act, 1988, 173
Industrial Disputes (Amendment) A
et, 2010, 67,203
salient features of, 174
Miscellaneous Provisions) Act, 1956, 308
Industrial Employment (Standing Orders) or
IESOA Act, 1946, 12, 15, 63, 137, 476, 480,
562,665
appeal against certification, 689
binding nature and effect of, 690
concept of, 675
content of the schedule, 675
definition, 675
734 • Index
conditions for certification of, 683
matters to be set out in the schedule, 684
constitutional validity of automatic
termination of service, 667
coverage of the Act, 669
establishments excluded, 671
exempted establishments, 672
government's power to exempt, 672
industrial establishment covered, 669
employers under the Act, 673
workers covered, 673
date of operationof, 690
inspection machinery, 706
interpretation of, 699
powers of the high court, 704
powers of labour court under Section
13-A, 701
model standing order, 686
modification of, 695
law and policy, 695
no time-limit for making application, 697
procedure for, 696
who may apply for, 696
nature of the, 677
a special kind of, 680
standing orders: if 'award', 681
standing orders: if form of delegated
legislation, 681
statutory in character, 677
penalties and procedure, 705
posting of, 693
procedure for certification of, 687
remedies for enforcement of rights and
liabilities, 705
remedy for enforcement of rights and
liabilities, 706
civil remedy under the IESOA, 705
under the civil procedure code, 706
temporary application of model, 698
submission of draft by employers, 683
Industrial Employment (Standing Orders)
Amendment Act, 1981, 709
Industrial Relations Bill, 1978, 99
Indian Factories Act, 6
Indian judiciary in the evolution of industrial
jurisprudence, 42
area of conflict, 43
enforcement of fundamental rights, 44
maintainability of the writ petition under
article 32, 43
prohibition of traffic in human beings and
forced labour, 44
violation of labour law, 45
Industrial relations,
changing dimensions in India, 30
contextual framework, 19
difficulties in the growth of, 23
dimensions of the problems, 20
five-year plans, 31
human relation management vis-a-vis, 28
impact of globalization and WTO regime
on,30
objectives of, 28
role of the state in, 29
scope and concept of, 27
unemployment and underemployment as
barriers to, 22
unrest and work-stoppages, 21
Industrial Relations Bill, 1978, 131
Indian Trade Unions (Amendment) Bill, 1943, 130
Industry, 12, 15, 205
agricultural operation, 211
agriculture produce market committee, 211
an appraisal, 220
apartment owners' housing society, 219
charitable institutions, 218
chartered accountant's firm, 213
clubs, 214
commercial institutions, 215
cooperative societies, 219
current confusion, 234
definition of, 207
dock labour board, 220
educationalinstitutions,213
hospitals and pharmacies, 208
municipalities and municipal
corporations, 205
national/state highways, 219
Parliament's disapproval of judicial
response, 231
private or domestic servants, 217
professional activities, 212
 Index• 735

religious institutions, 217 review by 2nd NCL, 10

response of 1st NCL, 230 social justice and, 4
Zila Sainik Board, 219 application of concept of, 5
International Labour Organization (ILO}, 7 concept of, 4
ILO declaration on fundamental principles Constitution of India and, 5
and rights at work, 8 laissez faire, 3, 147
making of international labour standard, 8 Lockout, 414,641
principles of, 7 closure not lockout, 420
structure and activities, 8 discharge not lockout, 421
Inter-State Migrant Workmen (Regulation of disciplinary measure not lockout, 417
Employment and Conditions illegal, 456
of Service) Act, 1979, 42 judicial response, 415
L justified, 460
refusal to give work, 422
Lay-off, 473, 641
regulation of, 439
applicability of Section 25 C to 25 E, 481
additional restrictions on, 440
compensation for the period of, 480
general prohibition on, 439
under Section 25 C of the Industrial
Disputes Act, 480 prohibition on continuance of, 452
continuous service, 484 right to, 438
effect oflaws inconsistent with Chapter V,487 security measure not lockout, 419
management's right to, 476 statutory definition, 414
nature of, 474 unjustified, 460
closure of business and, 475 determination of, 461
general, 474 M
lockout and, 474
Management prerogative and law, 635
penalty for, 479
alteration in the conditions of service, 640
perspective, 473
change of conditions of services: Notice of
recovery of compensation, 485 change,657
procedure for, 479 change in age of retirement, 659
prohibition on, 478 scope and purpose, 657
retrenchment and, 475 voluntary retirement scheme, 658
statuary definition, 475 withdrawal of customary concession or
workmen not entitled to compensation, 482 privilege, 658
Labour law, 3 misconduct not connected with dispute
approaches of, 12 pending, 642
judicial legislation on industrial application of Res Ipsa Loquitur, 644
relations, 13 failure effect, 645
Indian judiciary, 12 Proviso to Section 33 (2) (b), 649
approach to, 3 scope of Section 33 (2) (b }, 644
basis of,4 tribunal interference, 648
ILO and its influence on Indian, 7 object of and requirements under Section 33,637
labour reforms, 14 action must be bona fide, 638
key areas, 15 pendency of proceedings, 637
public interest litigation for enforcement of, 7 workmen concerned in the disputes, 637
review by 1st NCL, 10 protection of union officials, 652
736 • Index
remedy to an aggrieved employee, 653
power of labour court to grant interim
relief, 656
scope of inquiry, 655
time-limit of reference, 655
who can apply, 654
scope of inquiry under Section 33,638
membership subscription, 112
check-off, 113
deduction under Payment of Wages
Act, 1936, 113
rate of subscription of union members, 112
realization of union subscription and
check-off, 112
right of members to subscribe, 112
mens rea, 458
Mines Act, 1952, 26, 42,481
Minimum Wages Act (1948), 6, 15, 34
Misconduct, 562
N
National Commission on Labour (NCL}, 1966,
10,27
recommendations, 10, 11
Non-statutory machinery, 353
code of discipline, 356
joint management council, 353, 718
composition of, 354
powers and functions of, 355
working of the, 355
tripartite consultative machinery, 359
0 secret ballot method for the representation
Office-bearer, 105
disqualification of, 105
tenure, rights and duties, 106
transfer of, 107
Outsiders, 104
entry in trade unions, 105
numbers of, 105
p duties, 92
Payment of Bonus Act, 6
Payment of Gratuity Act (1972), 15, 67
Payment of Gratuity (Amendment) Act, 2010), 67
Payment of Wages Act, 6
subsistence allowance, 709
effect of non-payment of, 711
scope of section lOa(l), 710
scope of sub-section 2 of section 10a, 711
Picketing, 408
a permissible weapon, 408
elements of, 408
freedom of movement and, 410
right to freedom of speech, 408
Philadelphia Charter (1944), 3, 8
Plantation Workers Act, 1951, 26, 67,481
Plantation Labour (Amendment) Act, 2010, 67
Political fund, 115
nature and effect of non-contribution, 116
Protection of Human Rights Act, 1993, 46
public utility services, 441
central scheme of regulation, 443
firstschedule,442
R
Recognition of trade unions,
in retrospect, 129
law practice relating to, 132
claim for recognition, 138
legislative measures, 132
method of, 141
non-statutory code of discipline in
industry, 135
response of 1st NCL, 142
response of 2nd NCL, 145
rights of unrecognized unions, 141
character of trade union, 139
tribunal's response, 135
need for, 129
re-recognition of, 133
rights of, 133
withdrawal of, 133
Recommendation, 8
Registrar,
no powers, 88, 90
powers of, 88, 89, 91, 97
Registration of trade unions, 83
appeal, 97

appellate forum, 97
powers of appellate court, 98
time for making an, 98
appointment of registrar, 84
cancellation and deregistration, 95
certificate of registration, 95
compulsory vs voluntary, 84
in unorganized sector, 86
legal status, 83
minimum requirement for membership, 95
modeof,85
plans and recognition, 130
penalties and procedure, 101
registered office, 99
re-registration, 98
result of de-registration, 98
submission of returns, 100
Retrenchment,
conditions precedent, 504,516
constitutional validity of Sections 25 N and
25 Q,517
context, 487
continuous service, 509
determination of, 511
nature,488
no regularization for workers worked under
240 days, 515
notice to the appropriate government, 515
re-employment of retrenched
workmen, 532
retrospective operation of
Section 25-H, 534
terms and conditions, 534
relief to workmen in violation of Section
25F /25N, 522
procedure for, 528
non-compliance of Sections 25-F and
25-G,532
period of service, 532
rule of last come, first go, 529
statutory definition, 489
automatic termination of service, 502
compulsory retirement, 498
due to closure of a unit, 503
scope of Section 2 (oo) (c), 503
Index• 737
voluntary resignation, 498
Right to notice, 571
s
Sales Promotion Employees (Conditions of
Service) Act, 1976, 12
Sanction, 456
penalty for giving financial aid, 457
penalty for instigating or inciting, 457
penalty for strikes and lockouts, 456
Sexual harassment of women at workplace, 45
guidelines and norms, 46-48
Shops and Commercial Establishments Act, 6
Societies Registration Act, 1960, 83
Standing Orders under the Industrial Employment
(Standing Orders) Act, 1946, 46
Strike,397
dismissal of, 463
forms of, 401
go-slow, 403
hunger strike, 404
lightning or wildcat strike, 405
stay-in-strike, sit-down strike, pen-down
strike, or tool-down strike, 402
work-to-rule, 405
illegal, 456
judicial response, 406
justified, 459
regulation of, 439
additional restrictions on, 440
general prohibition on, 439
prohibition on continuance of, 452
right to, 422
constitutional validity ofESMO,1960,437
government servants', 426
interference of court and police, 425
no fundamental right to, 422
right to demonstrate, 426
under the constitution, 427
under the industrial disputes act, 423
statutory definition, 398
unjustified, 461
determination of, 461
why do workmen go on strike, 406
Suspension, 641
738 • Index

T amendments, 87
Tamil Nadu Essential Services Maintenance Act trade or industry, 79
(TESMA), 2002, 435 Transfer, 641
Trade dispute, 81 compensation,536
Trade Disputes Act, 1929, 170,415 exception to section 25 FF, 539
Trade Unions Bill, 1950, 134 ofemployees,660
Trade Unions Act, 1926, 11, 77, 79, 81, 104, 112, 132
Trade Unions (Amendment) Act, 1947,63, 132,157 u
Trade Unions (Amendment) Bill, 1982, 65, 93, Unfair labour practices, 157
99,105 code of discipline, 1958, 158
Trade Unions and the Industrial Disputes proof of, 163
(Amendment) Bill, 1988, 66, 143 judicial delineation of, 158
Trade unions, 57 narrow and extensive view, 158
amalgamation of, 100 scope of interference, 165
ceiling on holding offices in, 106 victimization, 163
closed shop/union shop, 70 burden of, 165
current issues, 69 outward manifestation, 164
definition, 75 proof of, 165
dissolution of, 100 Unorganized Workers' Social Security Act, 2008,
employers' organizations, 70 21,67
employers' federations, 73
need to form, 70 V
origin and growth, 71 Voluntary arbitration, 298
role and functions of, 72 arbitration agreement, 299
existing strength of central, 68 choice of dispute settlement, 298
general fund spending purpose, 114 conditions precedent, 299
history in India, 57 publication, 304
a broad survey, 68 selection of arbitrator, 299
1918-1924,61 voluntary labour arbitrator, 301
1925-1934,61 conduct and jurisdiction, 302
1935-1938,62 nature of, 301
1939-1946,62 powers under section lla, 303
1947 and since, 63 Voluntary Retirement Scheme (VRS), 30
pre-1918 period, 58
w
unity move, 65
Wage,15
inter and intra-union rivalries, 109
for strike and lockout period, 467
members of, 76
deduction of wages, 470
need to form, 57
effect of legal but unjustified lockout, 469
objectives of, 81
effect of illegality of lockout on payment
outsiders in, 103
of wages, 467
union executive and law, 104
effect of justification of strike on
right of minors to membership of, 103 wages,467
right to form, 57 effect of legal but unjustified strike on
rules of, 86 wages,468
nature and scope of, 87 Work committee, 271

constitution of, 272
functions of, 273
operation and assessment, 274
remedial measures, 274
Worker,15
Worker participation, 716
1983-scheme, 721
1975-scheme of workers' participation in
industries, 718
joint council, 720
need, 718
shop council, 719
administration of the Act, 729
concept and scope, 716
enforcement of the Act, 729
in winding up operations, 724
making workers shareholders, 72
Management Bill, 1990, 725
representation of workers on board of
directors, 722
conflict/ confusion, 724
working of the scheme, 723
right to run sick industries, 725
Index• 739
statutory and non-statutory schemes, 718
Verma committee (1977-78), 721
Workmen,15,119,241
current approach of the SC on Section 2(s},268
employed, 242
employers, 269
hire and reward, 255
meaning, 241
nature of the work, 248
clerical work, 253
manual work, 249
multifarious duties, 254
skilled or unskilled, 249
supervisory capacity, 250
technicalwork,252
person excluded, 256
recommendations of the 2nd NCL, 269
Workmen's Compensation Act, 6, 67
Writ of Certiorari, 349
Writ of Mandamus, 233,350
scope of, 389
Writ of Prohibition, 350