Avatar Singh Labor Law

Date and Time: Monday, February 5, 2024 12:24:00 PM IST
Job Number: 216227840
Documents (100)
1. Short Title, Extent and Commencement [Section 1]

Client/Matter: -None-
2. Legislations before the Act of 1947
3. Statement of Objects and Reasons
4. Objectives of Industrial Disputes Act
5. Definitions [Section 2]
6. Conditions of Service for Change of which Notice is Requisite
7. Power of Government to Exempt [Section 9B]
8. Legality of Change
9. Requirement of Notice
10. Prejudicial Changes
11. Other Changes
12. Writ Remedy
13. Works Committee [Section 3]
14. Grievances Settlement Authority [Section 9C]
15. Conciliation [Sections 4 & 5]
16. Conciliation Officers [Section 4]
17. Conciliation and Reference
18. Duties of Conciliation Officers [Section 12]
19. Board of Conciliation [Section 5]
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20. Courts of Inquiry [Section 6]
21. THE INDUSTRIAL DISPUTES ACT, 1947
28. Reference of Disputes to Boards, Courts or Tribunals [Section 10]
29. Effect of Reference to National Tribunal
30. Reference is an Administrative Act
31. Reference as a Remedy
32. General Reference and its Validity
33. Power to Amend, Modify, Vary or Withdraw Order of Reference
34. Validity of Reference for Workmen Working in Another State
35. Exclusion of Civil Courts’ Jurisdiction
36. Power of Appropriate Government to Decline Reference
37. Delay
38. Dismissal for Offence Involving Moral Turpitude
39. Duty of Tribunal to Confine itself to Issues Raised by Parties
40. General Conclusions on Exercise of Power of Reference
41. Right of Employer to Lead Evidence
42. Arbitrational Machinery or Voluntary Reference of Disputes to Arbitration [Section 10(A)]
43. Alternative Remedy
44. Procedure and Powers of Conciliation Officers, Boards, Courts and Tribunals [Section 11]
45. Powers of Labour Courts, Tribunals and National Tribunals to give appropriate Relief in case of Discharge or
Dismissal of Workmen [Section 11A]
46. Examples Regarding [Section 11A]
47. Duties of Labour Courts, Tribunals and National Tribunals [Section 15]
48. Form of Report or Award [Section 16]
49. Publication of Reports and Awards [Section 17]
50. Commencement of Award [Section 17A]
51. Payment of Full Wages to Workman Pending Proceedings in Higher Courts [Section 17B]
52. Persons on Whom Settlements and Awards are Binding [Section 18]
53. Period of Operation of Settlement and Awards [Section 19]
54. Commencement and Conclusion of Proceedings [Section 20]
55. Certain Matters to be kept Confidential [Section 21]
56. Prohibition of Strikes and Lock-outs [Section 22]
57. General Prohibition of Strikes and Lock-outs [Section 23]
58. Illegal Strikes and Lock-outs [Section 24]
59. Prohibition of Financial Aid to Illegal Strikes and Lock-outs [Section 25]
60. Application of Sections 25C to 25E
61. Definition of Continuous Service [Section 25B]
62. Definition of Lay-Off
63. Quantum of Lay-off Compensation [Section 25(C)]
64. Retrenchment [Section 2(oo)]
65. Termination or Non-Renewal in accordance with Contract [Section 2(oo)]
66. Conditions Precedent to Retrenchment of Workmen [Section 25F]
67. Re-employment of Retrenched Workmen [Section 25H]
68. Effect of Takeover on Right of Re-employment
69. Compensation to Workmen in Case of Transfer of Undertakings [Section 25FF]
70. Closure and Compensation [Section 25FFF]
71. Sixty Days’ Notice to be Given of Intention to Close Down [Section 25FFA]
72. Compensation to Workmen in Case of Closing Down [Section 25FFF]
73. Effect of Laws Inconsistent with Chapter v [Section 25J]
74. Application of Chapter vb [Section 25K]
75. Definitions [Section 25L]
76. Prohibition and Prior Permission for Lay-Off [Section 25M]
77. Conditions Precedent to Retrenchment of Workmen [Section 25N]
78. Procedure for Closing Down an Undertaking [section 25-O]
79. Special Provision for Restart of Units Closed before Amendment of 1976 [Section 25P]
80. Penalty for Lay-off and Retrenchment without Previous Permission [Section 25Q]
81. Penalty for Closure [Section 25R]
82. Application of Certain Provisions to Certain Establishments [Section 25-S]
83. Prohibition of Unfair Labour Practice
84. Penalty for Committing Unfair Labour Practices
85. Penalty for illegal strikes and lock-outs [Section 26]
86. Penalty for Instigation, etc. [Section 27]
87. Penalty for Giving Financial Aid to Illegal Strikes and Lock-Outs [Section 28]
88. Penalty for Breach of Settlement or Award [Section 29]
89. Penalty for Disclosing Confidential Information [Section 30]
90. Penalty for Closure without Notice [Section 30A]
91. Penalty for Other Offences [Section 31]
92. Offence by Companies etc. [Section 32]
93. Conditions of Service, etc. to Remain Unchanged under Certain Circumstances During Pendency of
Proceedings [Section 33]
94. Special Provision for Adjudication on Fact of Variance [Section 33A]
95. Power to Transfer certain Proceedings [Section 33B]
96. Recovery of Money due from an Employer [Section 33-C]
97. Cognizance of Offences [Section 34]
98. Protection of Persons [Section 35]
99. Representation of Parties [Section 36]
100. Power to Remove Difficulties [Section 36A]
Short Title, Extent and Commencement [Section 1]
Avtar Singh: Introduction to Labour and Industrial Law
Avtar Singh: Introduction to Labour and Industrial Law > Introduction to Labour and Industrial
Laws > PART I THE INDUSTRIAL DISPUTES ACT, 1947 > Preliminary
PART I THE INDUSTRIAL DISPUTES ACT, 1947
Learning Objectives
In Part I on Industrial Disputes Act, 1947, students will be able:
1. To know what is an ‘industry’ and what are ‘industrial disputes’ and ‘deemed industrial disputes’ and
explore their meaning through different cases;
2. To understand what are the conditions where notice of change is required to be given by the employer to
his workmen;
3. To know about the authorities provided by the Act to settle industrial disputes;
4. To explore about Reference of Disputes to Boards, Courts or Tribunals under the Act;
5. To understand procedure, powers and duties of authorities under the Act;
6. To understand and distinguish between strikes and lock-outs, retrenchments and lay-offs, transfers and
closures as well as special provisions relating to them;
7. To know what are unfair labour practices that are prohibited under the Act;
8. To understand the procedure of inquiry and investigation in relation to industrial disputes;
9. To know about different penalties that can be imposed for violation of the provisions of the Act.
CHAPTER 1 Preliminary
The Industrial Disputes Act, 1947 is “as Act to make provision for the investigation and settlement of industrial
disputes, and for certain other purposes.” The Bill for this Act was introduced in the Legislative Assembly by the
Government of India on 28th October, 1947 and was passed on 11th March, 1947 and it became law from 1st April,
1947.
SHORT TITLE, EXTENT AND COMMENCEMENT [SECTION 1]— Updated On 08-01-2019

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Short Title, Extent and Commencement [Section 1]
The Act is called the Industrial Disputes Act, 1947. It extends to the whole of India.1 It came into force on the first
day of April, 1947.
1 Subs. by Act 36 of 1956, section 2 for sub-section (2) (w.e.f. 29-8-1956).
End of Document
Legislations before the Act of 1947
Learning Objectives
his workmen;
1947.
LEGISLATIONS BEFORE THE ACT OF 1947— Updated On 08-01-2019

Page 2 of 3
Before proceeding with the Industrial Disputes Act, 1947, it is necessary to know what were the laws for settlement
and investigation of industrial disputes before 1947. We can divide the period into three parts:
1. Period between 1819 to 1930
2. Period between 1930 to 1940
3. Period from 1940 onwards
Period from 1819 to 1930
During the period from 1819 to 1930 the following three legislations were important:—
(i) Bengal Regulation VII of 1819.—Under this regulation, the breach of contract was made a criminal offence.
(ii) Indian Trade Unions Act, 1926.—This Act guaranteed workmen the right to organise themselves and gave
them a legal corporate status along with immunization from civil and criminal liability in respect of strikes.
(iii) Trade Disputes Act, 1929.—The main object of this Act was to make provisions for establishment of Courts
of Inquiry and Boards of Conciliation for investigation and settlement of trade disputes respectively. This
Act prohibited strikes and lock-outs without notice in public utility services. Any such strike or lock-out was
made illegal by this Act which had any object other than the furtherance of a trade dispute within the trade
or industry in which the strikers or the employers locking-out were engaged and was designed to inflict
severe, general and prolonged hardship upon the community and thereby compel the Government to take
or abstain from taking any particular course of action.
Period from 1930 to 1940
In 1932, the Trade Disputes Act was amended and made permanent by the Trade Disputes (Extending Act), 1934.
During the period between 1930 and 1940 substantial progress was made in building up a permanent machinery for
the speedy and amicable settlement of industrial disputes. In 1938, the Trade Disputes Amendment Act (XI of 1938)
was passed which provided for the conciliation officers charged with the duty of mediating in or promoting the
settlement of industrial disputes. Water transport and tramways were included in public utility service and the
provisions regarding illegal strikes and lock-outs were made less restrictive by this Act.
Period from 1940 onwards
After the Second World War the whole economic structure underwent a drastic change. To meet such a situation
the Government of India passed the Defence of India Rules in 1942. These Rules empowered the Government to
make general or special orders to—
(i) prohibit strike or lock-outs,

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(ii) refer any dispute for conciliation or adjudication,
(iii) require employers to observe such terms and conditions of employment as might be specified, and
(iv) enforce the decisions of the adjudicators.
The Provincial Governments were also empowered in this respect by a Notification after few months.
In August, 1942, an Ordinance named, ‘The Essential Services (Maintenance) Ordinance’ was promulgated which
prohibited strikes and lock-outs without 14 days’ previous notice.
Rule 81-A of the Defence of India Rules, 1942, which empowered the Government to refer disputes to lapse on 1st
October, 1946 but was kept in force by the Emergency Provisions (Continuance) Ordinance, 1946.
End of Document
Statement of Objects and Reasons
Learning Objectives
his workmen;
1947.
STATEMENT OF OBJECTS AND REASONS— Updated On 08-01-2019
According to the statement of objects and reasons of the Industrial Disputes Bill there were many defects in Trade
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Statement of Objects and Reasons
Disputes Act of 1929 which needed to be overcome by fresh legislation. The main defect of the 1929 Act was that
while restraints had been imposed on the rights of strike and lock-out in public utility services, no provision was
made to render the proceedings institutable under the Act for the settlement of an industrial dispute, either by
reference to a Board of Conciliation or to a Court of Inquiry, conclusive and binding on the parties to the dispute.
However, this defect was overcome during the war by empowering the Central Government to refer industrial
disputes to adjudicators and to enforce their award under Rule 81-A of the Defence of India Rules. This Rule
originally was to lapse on 1st October 1946 but was kept in force for a further period of six months by the
Emergency Powers (Continuance) Ordinance, 1946. The Bill embodied the essential principles of Rule 81-A, which
had proved generally acceptable to both employers and workmen, retaining intact, for the most part, the provisions
of the Trade Disputes Act, 1929.
For the prevention and settlement of industrial disputes two institutions have been provided in the Bill, namely,
Works Committee and Industrial Tribunal. Works Committees consisting of representatives of employers and
workmen and Industrial Tribunal consisting of one or more members possessing qualifications ordinarily required
for appointment as judge of a High Court. Power has been given to appropriate Governments to require Works
Committees to be constituted in every industrial establishment employing 100 workmen or more and their duties will
be to remove causes of friction between the employer and workmen in the day-to-day working of the establishment
and to promote measures for securing amity and good relations between them. A reference to an Industrial Tribunal
will lie where both the parties to an industrial dispute apply for such reference and also where the appropriate
Government considers it expedient so to do. An award of a Tribunal may be enforced either wholly or in part by the
appropriate Government for a period not exceeding one year. This power to refer disputes to Industrial Tribunal and
enforce their awards is an essential corollary to the obligation that lies on the Government to secure conclusive
determination of the disputes with a view to redressing the legitimate grievances of the parties thereto.
This Bill also seeks to re-orient the administration of the conciliation machinery provided in the Trade Disputes Act,
1929. In all disputes in public utility services conciliation will be compulsory while in the case of other
establishments it will be optional. To expedite conciliation proceeding time limits have been prescribed for their
conclusion—in the case of conciliation officers it is 14 days while in the case of Board of Conciliation time limit is
two months from the date of notice of strike.
There is prohibition of strikes and lock-outs during the pendency of conciliation and adjudication proceedings on
settlements reached in the course of conciliation proceedings and awards of Industrial Tribunals declared binding
by the appropriate Government.
The appropriate Government is also empowered by the Bill to declare, if public interest or emergency so requires,
by Notification in the Official Gazette, any industry to be a public utility service for such period, if any, as may be
specified in the Notification.
End of Document
Objectives of Industrial Disputes Act
Learning Objectives
his workmen;
1947.
OBJECTIVES OF INDUSTRIAL DISPUTES ACT— Updated On 08-01-2019
The two main objectives of the Industrial Disputes Act, 1947 are industrial peace and economic justice. For bringing
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Objectives of Industrial Disputes Act
industrial peace it is necessary to have continuous and growing production which is possible only when there are no
interruptions and stoppages in production and when various agencies of production are satisfied and are in a
harmonious bend to work.
For bringing economic justice, main causes of labour struggle like increase in wages, grant of allowance and
benefits, resistance to decrease in wages should be removed. It is necessary to satisfy labour with their existing
economic condition so that there arise no interruptions in production.
End of Document
Definitions [Section 2]
Learning Objectives
his workmen;
1947.
DEFINITIONS [SECTION 2]— Updated On 08-01-2019

Appropriate Government [Section 2 (A)]
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Section 2(a) of Industrial Disputes Act has defined the term ‘appropriate Government’ in relation to the following the
appropriate Government is the Central Government:—
(i) in relation to any industrial disputes concerning any industry carried on by or under the authority of the
Central Government, or
(ii) by a railway company or concerning any such controlled industry as may be specified in this behalf by the
Central Government, or
(iii) in relation to an industrial dispute concerning a Dock Labour Board established under S. 5A of the Dock
Workers (Regulation of Employment) Act, 1948 (9 of 1948), or
(iv) the Industrial Finance Corporation of India Limited formed and registered under the Companies Act, 1956
(1 of 1956), or
(v) the Employees’ State Insurance Corporation established under S. 3 of the Employees’ State Insurance Act,
1948 (3 of 1948), or
(vi) the Board of Trustees constituted under section 3A of the Coal Mines Provident Fund and Miscellaneous
Provisions Act, 1948 (46 of 1948), or
(vii) the Central Board of Trustees and the State Boards of Trustees constituted under S. 5A and S. 5B,
respectively, of the Employees’ Provident Fund and Miscellaneous Provisions Act, 1952 (19 of 1952), or
(viii) the Life Insurance Corporation of India established under S. 3 of the Life Insurance Corporation Act, 1956
(31 of 1956), or
(ix) the Oil and Natural Gas Corporation Limited registered under the Companies Act, 1956 (1 of 1956), or
(x) the Deposit Insurance and Credit Guarantee Corporation established under S. 3 of the Deposit Insurance
and Credit Guarantee Corporation Act, 1961 (47 of 1961), or
(xi) the Central Warehousing Corporation established under S. 3 of the Warehousing Corporations Act, 1962
(58 of 1962), or
(xii) the Unit Trust of India established under S. 3 of the Unit Trust of India Act, 1963 (52 of 1963), or
(xiii) the Food Corporation of India established under S. 3, or a Board of Management established for two or
more contiguous States under S. 16, of the Food Corporations Act, 1964 (37 of 1964), or
(xiv) the Airports Authority of India constituted under S. 3 of the Airports Authority of India Act, 1994 (55 of
1994), or
(xv) a Regional Rural Bank established under S. 3 of the Regional Rural Bank Act, 1976 (21 of 1976), or
(xvi) the Export Credit and Guarantee Corporation Limited, or
(xvii) the Industrial Reconstruction Bank of India Ltd., or
(xiii) the National Housing Bank established under S. 3 of the National Housing Bank Act, 1987 (53 of the
1987)], or
(xix) an air transport service, or
(xx) a banking or an insurance company, or
(xxi) a mine, an oil field, a Cantonment Board, or

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(xxii) a major port, any company in which not less than fifty-one per cent of the paid-up share capital is
held by the Central Government, or any under any corporation, not being a caoprattion referred to in this
clause, established by or law made by Parliament, or the Central public sector undertaking subsidiary
companies set up by te principal undertaking and autonomous bodies owned or controlled by the Central
Government, the Central Government, and
In relation to any other industrial dispute, including the State public sector undertakings, subsidiary companies set
up by the principal undertaking and autonomous bodies owned or controlled by the State Government (other than
the above stated), the appropriate Government is the State Government. However, in case of a dispute between
the 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 the control over such industrial establishment.
The above stated definition requires some important guidelines to be considered. Where operations extend to more
than one State, the principles applicable for determination of appropriate Government is as follows:
(i) Only one Government can be appropriate Government for reference.
(ii) The principles of section 20, CPC about jurisdiction of courts can be taken as guide.
(iii) The industry should be carried on in a State.
(iv) To give jurisdiction to the Government, the industrial dispute or subject matter of the dispute must have
substantially arisen within its cognisance i.e., there must be nexus between the dispute and the territory of
the State.
The definition explains extensively the range in which the Central Government is to be regarded as the Appropriate
Government and then says that in all other cases the Appropriate Government would be the State Government. In
this connection a question has often arisen whether in reference to Central Government undertakings, the Central
Government would be Appropriate Government wherever they may be located.
In the case of Cotton Corpn. of India Ltd. v. Odusmath G.C., while discussing the meaning of ‘appropriate
government’ it was held that whatever be the extent, depth and sweep of the Central Government over a company
registered under the Companies Act, it remains a separate juristic person in existence distinct from the Central
Government. It cannot be treated as carrying on business under the authority of the Central Government unless so
specified in this behalf. So the Central Government would not necessarily be the appropriate Government.
In the important case of Goa Sampling Employees Assn v. General Superintendence Co. an industrial dispute
between the Goa Sampling Employees Association and General Superintendence Co. of India (P.) Ltd. was
referred by the Central Government to the Industrial Tribunal, Bombay, for adjudication. However, an objection was
raised that the Central Government was not the ‘appropriate Government’ for making the reference. It was held by
the Supreme Court that the Constitution makes a dichotomy between the State and the Union Territory. Part-VI of
the Constitution does not apply to Union Territories. Apart from the definitions of the expressions ‘Central
Government’, ‘State Government’ and ‘Union Territory’ the Constitution itself makes a distinction between ‘State’
and its Government called the ‘State Government’ and the Union territory and the Administration of the Union
Territory. Unless otherwise clearly enacted, the expression ‘State Government’ would not comprehend
Administration of Union Territory.
Clause (c) of section 3(60) of the General Clauses Act, 1897 would show that in the Union Territory, there is no
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concept of State Government but wherever the expression ‘State Government’ is used in relation to the Union
Territory, the Central Government would be the State Government. The concept of State Government in relation to
Union Territory is obliterated by the definition.
Administration of Union Territory does not qualify for the description as the State Government. Therefore, the
Central Government is the appropriate Government in relation to industrial dispute arising within the Union Territory.
The proper test for locating the appropriate Government is to see the location of the dispute, i.e. “where did the
dispute arise” Where, on the date of reference, the employer is not carrying on any business in any state, that
particular State Government would be the appropriate Government in whose territory the cause of action arose
wholly or in part. In a dispute regarding service conditions of staff posted at Calcutta belonging to a mine situated in
Orissa, it was held that the state of West Bengal was the appropriate Government and not the Central Government.
The Delhi Government was held to be the appropriate Government for employees controlled by the Delhi office
though posted outside Delhi. A company, wholly owned and controlled by the Central Government, had two units,
one in West Bengal and the other in Karnataka. Reference by the Government of West Bengal of a dispute arising
there was held to be valid. The removal of a workman employed in the branch office of a company was held to be a
dispute arising in the state where the branch office was located and therefore, the Government of that state was the
appropriate Government.
In a dispute regarding termination of services of appellant-workmen, the State Government of West Bengal referred
the dispute to the industrial tribunal. The High Court held the reference by the State Government to be without
jurisdiction. In appeal, the Supreme Court observed that as the termination orders were served upon the appellants
at Calcutta as they did not obey transfer orders, it is not correct the contend that the State of West Bengal was not
the appropriate Government. A part of the cause of action arose in Calcutta in respect whereof the State of West
Bengal was the appropriate Government.
The mere fact of an industry being on the list of “controlled industries” under the Industrial (Development and
Regulation) Act, 1951 would not make the Central Government as the appropriate Government unless the Central
Government so declares.
For industries located in Union Territories, the Central Government has been held to be the appropriate
Government. A railway labour contractor, who was the immediate employer and the railway as principal employer,
removed an employee. The resulting dispute was referred by the State Government. This was held to be not
proper, the Central Government being the appropriate Government.
Arbitrator [Section 2(AA)]
Section 2(aa) says that the term ‘arbitrator’ includes an umpire. The term has not been properly defined in the
section. In Arbitration Act, 1940 the term ‘umpire’ was used. As this Act was replaced by the Arbitration and
Conciliation Act, 1996, the concept of ‘umpire’ was replaced with that of presiding arbitrator. Now his work does not
come to play only when the arbitrators have differed in their opinion. He becomes a part and parcel of the
arbitration. In the absence of unanimity, majority opinion prevails.
However, section 10A has retained the old position of an umpire. He has to spring into action when the arbitrators
have a difference of opinion. The opinion of the umpire then prevails. (for details see section 10A).
Average Pay [Section 2(AAA)]
‘Average pay’ means the average of the wages payable to a workman—

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(i) in the case of monthly paid workman, in the three complete calendar months,
(ii) in the case of weekly paid workman, in the four complete weeks,
(iii) in the case of daily paid workman, in the twelve full working days,
Any of the above three periods must be the period preceding the date on which the average pay becomes payable
if the workman had worked for three complete calendar months or four complete weeks or twelve full working days,
as the case may be, where it is not possible to calculate it, the average pay shall be calculated as the average of
the wages payable to a workman during the period he actually worked.
This concept of average pay is used for payment of lay off and retrenchment benefits. It has to be calculated
according to the mode of payment of wages. Where payment is on monthly basis, average pay means the amount
payable to a workman in three complete calendar months. In the case of weekly paid workman, it means the
amount payable for four complete weeks. In the case of daily paid workman, it means the amount payable in the 12
full working days. The computation has to come upto the proceeding day on which the average becomes payable.
Where the workman has not put in the requisite period, the calculation must be on the basis of the period for which
he actually worked.
Wages paid in 3 months immediately preceding retrenchment divided by 3 would be average pay.
Award [Section 2(B)]
The term ‘award’ means an interim or a final determination of any industrial dispute or of any question relating
thereto by any Labour Court, Industrial Tribunal or National Tribunal and includes an arbitration award made under
section 10-A.
Interim award is also within the jurisdiction of the Industrial Tribunal. It is a provisional and temporary determination
and is subject to a final adjustment on the final determination. Interim relief is given in aid of the final relief and it
should never prejudice the final determination.
If a special case is made out by the party an award may also be given retrospective operation. For giving
retrospective operation totality of circumstances should be considered.
Due importance must be given to the word “determination.” Where an Industrial Tribunal allows the parties to
withdraw the reference before any decision on merits, there is no award. A Tribunal’s decision on the scope of the
reference was held to be an award and, therefore, appealable under Article 136 of the Constitution. There is no
difference between an award and a settlement from the view point of their legal force. Rejection of a reference by
reason of the default of the workman in appearing has been held to be not an award. An interim award and an
interim relief are two different things.
In Hotel Imperial v. Hotel Workers Union, the workmen of three hotels were suspended on the grounds of
misconduct pending applications under section 33. The Tribunal had ordered the workmen to be paid their wages
plus Rs. 25/- per month in lieu of food till final decision with regard to their dismissal. On appeal the Supreme Court
stayed the order of the tribunal. It was contended that the Tribunal can not adjudicate upon the question of interim
relief. The Supreme Court observed that the interim relief, where it is admissible, can be granted as a matter
incidental to the main question without being itself expressed in plain terms. It was held by the Supreme Court that
ordinarily interim relief should not be the whole relief that the workman would get it they finally succeeded. An
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interim relief is granted in aid of the final relief to be granted. If final relief itself cannot be granted, no temporary
relief of the same nature can be given.
An interim award is not the final determination of points involved in an industrial dispute. It is only a provisional
arrangement made in some urgency and it is subject to a final adjustment on the final determination of a dispute.
Banking Company [Section 2(BB)]
The term ‘banking company’ means a company as defined in section 5 of the Banking Companies Act, 1949(10 of
1949), having branches or other establishments in more than one state and includes the following:—
(i) the Export-Import Bank of India,
(ii) the Industrial Reconstruction Bank of India,
(iii) the Small Industries Development Bank of India established under section 3 of the Small Industries
Development Bank of India Act, 1989 (39 of 1989),
(iv) the Reserve Bank of India,
(v) the State Bank of India,
(vi) a corresponding new bank constituted under section 3 of the Banking Companies (Acquisition and Transfer
of Undertakings) Act, 1970 (5 of 1970),
(vii) a corresponding new bank constituted under section 3 of the Banking Companies (Acquisition and Transfer
of Undertakings) Act, 1980 (40 of 1980), and
(viii) any subsidiary bank, as defined in the State Bank of India (Subsidiary Banks) Act, 1959 (38 of 1959).
Two conditions are necessary for any company to be a banking company:-
(i) it must be a banking company as defined in section 5 of the Banking Companies Act, 1949, and
(ii) it must have branches or other establishments in more than one state
Introduction of Banking Regulation Act, 1949 in section 2(bb) of the Industrial Dispute Act, 1947 is a case of
incorporation by reference. Subsequent amendments in the Banking Regulation Act, 1949 would not have any
effect on the expression ‘Banking Company’ as defined in that section.
The Industrial Disputes Act is a complete and self-contained code, and its working is, not dependent on the Banking
Regulation Act.
In a case, the respondent trade union made a complaint of victimisation against appellant co-operative bank under
section 28 of the Maharashtra Recognition of Trade Unions and Prevention of Unfair Labour Practices Act, 1971.
The industrial court returned the complaint on the basis of objection raised by the bank that the MRTU and PULP
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Act was not applicable to the bank as it operated in more than one State and the appropriate Government would be
the State Government. The High Court did not uphold the objection, set aside the industrial court’s order and
remanded the matter back to it for decision on merits. In appeal, the Supreme Court observed that the question is
whether s. 2(bb) of the I.D. Act, 1947 defining a ‘Banking Company’ by reference of section 5 of the Banking
Regulation Act, 1949 would take in amendments in the latter Act or not? It has to be answered in the light of two
concepts of statutory interpretation, namely incorporation by reference or mere reference of one statute in another.
The Supreme Court held that introduction of BRA, 1949 was a case of in corporation by reference, and therefore,
subsequent amendments would not have any effect on the expression ‘Banking Company’ as defined in that
section. It was further held that in relation to a multi-state Co-operative Bank, such as the appellant, the appropriate
Government would be the State Government.
Board (Section 2(C)]
For the purposes of the Act, the term ‘Board’ means the Board of Conciliation constituted under the Act. [For details
about the “Board” see notes under s. 5].
Closure [Section 2(CC)]
The term ‘Closure’ means the permanent closing down of a place of employment or part thereof. [For further details
see s. 25-O]
Conciliation Officer [Section 2(D)]
The term ‘Conciliation Officer’ means a Conciliation Officer appointed under this Act. Such officers are appointed
under s. 4 of the Act. Their function is to settle disputes through the process of conciliation. It is an alternative to
actual adjudication of disputes, a method of alternative dispute resolution. [For details see under Conciliation].
Conciliation Proceeding [Section 2(E)]
The term ‘conciliation proceeding’ means a proceeding held by a conciliation officer or the Board of Conciliation
under this Act. The definition became necessary because under sections 4 and 5 of the Act, due emphasis has
been given to the frictionless method of settling disputes. The emphasis of the Act seems to be that the machinery
of conciliation should be tried in the first instance. [see notes under sections 4 and 5].
Controlled Industry [Section 2(EE)]
The term ‘controlled industry’ means any industry the control of which by the union has been declared by any
Central Act to be expedient in the public interest.
The concept of “controlled industry” was introduced into the Indian economy by the Industries (Development and
Regulation) Act, 1951 for the purpose of bringing about controlled development of such industries. In the wake of
the economic liberalisation, only a few items have remained on the list of controlled industries. By far a great bulk of
industries has been delisted. The concept was being used for the purpose of ascertaining whether the Central
Government, being the controlling authority, was the appropriate Government in reference to such companies or
not.
Court [Section 2(F)]
‘Court’ means the court of inquiry constituted under this Act. Such a court is constituted under s. 6 of the Act for the
purpose of conducting an inquiry into the genesis of an industrial dispute and other matters connected with or
relevant to the dispute. [see notes under s. 6].
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Employer [Section 2(G)]
‘Employer’ means—
(i) in relation to an industry carried on by or under the authority of any department of the Central Government
or a State Government, the authority prescribed in this behalf, or where no authority is prescribed, the head
of the department;
(ii) in relation to an industry carried on by or on behalf of a local authority, the chief executive officer of that
authority.
The U.P. Industrial Disputes Act, 1947 has added following two more clauses to the original ones:
(iii) an association or a group of employers.
(iv) where the owner of an industry in the course of or for the purpose of conducting the industry contracts with
any person for the execution by or under such person of the whole or any part of any work which is
ordinarily part of the industry, the owner of such industry.
The definition is not exhaustive. It extends only to the enumerated clauses. The Act applies to all employers
whether individuals or associations.
Executive [Section 2(GG)]
The ‘executive’ in relation to a trade union, means the body, by whatever name called, to which the management of
the affairs of the trade union is entrusted.
The word ‘executive’ has been used in relation to a trade union. The executive body of a trade union is an important
feature of an Act devised to bring about settlement of industrial disputes. Collective bargaining can be resorted
through such a representative body.
Independent Person [Section 2(I)]
The term ‘independent person’ is defined under s. 2(i). A person shall be deemed to be ‘independent’ for the
purpose of his appointment as the Chairman or other member of a Board, Court or Tribunal, if he is unconnected
with the industrial dispute referred to such Board, Court or Tribunal or with any industry directly affected by such
dispute.
Provided that no person shall cease to be independent by reason only of the fact that he is a shareholder of an
incorporated company which is connected with, or likely to be affected by, such industrial dispute; but in such a
case, he shall disclose to the appropriate Government the nature and extent of the shares held by him in such a
company.
The concept of “independent person” has been created by the Act for the purpose of appointing such persons to
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important positions under the Act for the purpose of settlement of disputes. Section 5, for example, says that the
chairman of a Board of Conciliation must be an independent person. The Court of Inquiry under s. 6 has to consist
of at least one independent person. That is why a definition of an independent person became necessary. The
primary emphasis of the definition is that he should be unconnected with the industrial dispute as also with any
industry directly affected by the dispute. A proviso to this statement says that a person shall not taken to lose his
independence by reason only of the fact that he is a shareholder of a company which is connected with or is likely
to be affected by the industrial dispute. The person concerned must, however, disclose to the appropriate
Government the nature and extent of his shareholding in the company.
Industry [Section 2(J)]
Definition of Industry
The term ‘industry’ means any business, trade, undertaking, manufacture or calling of employers and includes any
calling, service, employment, handicraft, or industrial occupation or avocation of workmen.
The Amendment of 1982 had substituted a new definition but no enforcement date has been notified so far.
Therefore, the original definition remains in force. The amended definition is given below:—
“Industry” means any systematic activity carried on by co-operation between an employer and his workmen for the
production, supply or distribution of goods or services with a view to satisfy human wants or wishes. Those wants or
wishes are not included which are merely spiritual or religious in nature. All the workmen, whether employed by the
employer directly or by or through any agency including a contractor, are included in the category of workmen. For
carrying on such systematic activity it is not necessary that—
(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.
The following activities are included in the definition of “industry”:—
(a) any activity of the Dock Labour Board [established under section 5A of the Dock Workers (Regulation of
Employment) Act, 1948].
(b) any activity relating to the promotion of sales or business or both.
The following activities are not included in the definition of “industry”:—
(1) any agricultural operation except where such agricultural operation is carried on with any other activity
involved in production, supply or distribution of goods or services in an integrated manner. It is necessary
that the other activity should be the predominant activity. If agricultural operation is predominant activity
than it will not be included in definition of “industry.”
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An Explanation attached to this provision says that “agricultural operation” does not include any activity
carried on in a plantation [defined in section 2(f) of the Plantation Labour Act, 1951];
(2) hospitals or dispensaries are not included in the definition.
(3) educational, scientific, research or training institutions are not included in the definition of “industry.”
(4) institutions owned or managed by those organisations which are engaged in any charitable, social or
philantrophic service either wholly or substantially are not included in the definition of “industry”
(5) Khadi or village industries also do not come under the definition of “industry.”
(6) any activity of the Government relatable to the sovereign functions are not included in the definition of
“industry.”
All the activities carried on by the departments of the Central Government dealing with defence,
research, atomic energy and space are also not included in the definition of “industry.”
(7) any domestic service is not included in the definition of “industry.”
(8) any professional activity practicised by an individual or body of individuals, if the number of persons
employed by the individual or body of individuals is less than 10, is also not included in the definition of
“industry.”
(9) any activity carried on by a co-operative society or a club or any other like body of individuals is also not an
industry if the number of persons employed by either of them is less than 10 in relation to such activity.
Scope of Industry
The definition of industry is a comprehensive definition and it is in two parts : one part defines it from the point of
view of the employers and other from the standpoint of the employees. Therefore, any activity which falls within
either of these two parts, automatically becomes an industry.
Liberal Construction
Industrial laws should be liberally constructed, i.e.; widest possible interpretation should be given to the term
‘industry’ as well as ‘industrial dispute’ in order to meet the requirements of modern technological progress and in
order to bring about a fair and satisfactory adjustment of relations between employers and workmen for the
promotion of industrial peace and harmony. It is necessary to draw a line in a fair and just manner putting some
limitations on the width of the words.
Guidelines for Ascertaining whether an Activity is an Industry
There are a few guidelines for ascertaining whether an activity is an industry or not. They are given below:
(i) the activity must be systematically and habitually undertaken for the production of goods or rendering of
material services with the help of organised labourforce. It must partake the nature of trade or business or
be an undertaking for manufacture or calling of employers.
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(ii) undue significance should not be attached to the popular or conventional attributes of trade, business,
calling etc. Therefore, the profit motive is not essential. It was held in the subsequent decision in
Federation of ICCI v. Workmen, (1972) 1 SCC 40 [LNIND 1971 SC 573] that an exemption given to a
charitable institution under s. 32(5) of the Payment of Bonus Act, 1965 is not relevant to the construction of
s. 2(j) (industry).
(iii) there must be essential and direct co-operation between capital and labour.
(iv) the co-operation must be for rendering of material services.
(v) the above stated conditions should be satisfied by the principal activity of the operation or undertaking and
not by the subsidiary one.
(vi) the principal activity will lend colour to the whole activity and it must be one which is capable of being
owned and transferred.
(vii) when the above conditions are fulfilled it is immaterial who does the activity, an individual, local body,
corporation or State, The character of activity will not be affected by the nature of the organisation or
ownership.
There is a long line of cases in which the concept of industry was discussed. Only some of them may be taken up
here. The earliest important case was that of D.N. Bannerji v. P.R. Mukherji, in which it was held that the definitions
in the Act would also include disputes that might arise between municipalities and their employees in branches of
work that can be said to be analogous to the carrying out of a trade or a business. The court observed that it is
incumbent on it to ascertain what the Statute means by “industry” and “industrial dispute” leaving aside the original
meaning attributed to the words in a simplicitor state of society, when we had only one employer perhaps, doing a
particular trade or carrying on a particular business with the help of his own tools, material and skill and employing a
few workmen in the process of production or manufacture the court observed:
“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 only mean a business or trade undertaking, still it must be
remembered that if that were so, there was no need to use the word separately from business or trade. The wider import is
attracted even more clearly than 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 found support in the statement in National Association of Local Govt. Officers v. Bolton Corporation,
where Lord WRIGHT after referring to the definitions of ‘trade dispute’ and ‘workmen’ contained in the order of
reference to the National Arbitration Tribunal pointed out that they are identical with and have the same meaning as
the definitions contained in the Industrial Courts Act, 1919 have. Thus, the word “industry” would include within its
scope what might not strictly be called “trade or business.”
In the very important case of State of Bombay v. Hospital Mazdoor Sabha, it was decided that the J.J. Group of
Hospitals came within the definition of industry. In this case, the services of some employees were terminated by
the superintendent of the hospital after serving them a notice. The Hospital Mazdoor Sabha was a registered trade
union of the employees of hospitals in the State of Bombay. The Union filed a writ petition claiming mandamus
directing the State of Bombay to reinstate these employees in their posts. It was contended that the retrenchment of
the employees was not according to the provisions of the Industrial Disputes Act, 1947.
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The writ petition was resisted on the ground that the J.J. Group of Hospitals was not an industry, and therefore, the
Industrial Disputes Act was not applicable.
The Bombay High court decided in favour of the employees holding that J.J. Group of Hospitals was an industry
within the meaning of s. 2(j). It was observed by Justice GAJENDRAGADKHAR:
“There is another point which cannot be ignored. Section 2(j) 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
which are used in an inclusive definition, it would be inappropriate to put an interpretation upon terms of wider connotation.”
“...The conventional meaning attributed to the words “trade and business” has lost some of its validity for the purpose of
industrial adjudication. Industrial adjudication has necessarily to be aware of the current of socio-economic thought. It must
recognise that in the modern welfare State healthy industrial relations are a matter of permanent importance and its
essential function is to assist the State by helping a solution of industrial disputes which constitute a distinct and permanent
phenomenon of modern industrialised States. In attempting to solve industrial disputes, industrial adjudication does not and
should not adopt a doctrinaire approach that is why, we think that in construing the wide words used in section 2(j) it would
be erroneous to attach undue importance to the attributes associated with business or trade in the popular mind in days
gone by.”
“It would be possible to exclude some activities from section 2(j) without any difficulty. Negatively stated the activities of the
Government which can be properly described as regal or sovereign activities are outside the scope of section 2(j).”
The Supreme Court worked out the following formula for deciding whether an establishment is an industry or not. It
observed that—
(1) an activity systematically or habitually undertaken—
(a) for the production or distribution of goods, or

(b) for rendering of material service to community at large, or a part of such community with the help of
employees is an undertaking,
(2) such activity generally involves the co-operation of employer and employees,
(3) the object is the satisfaction of material human needs,
(4) it must be arranged or organised in a manner in which trade or business is generally arranged or
organised,
(5) it must not be casual or for pleasure.
After this case, the Supreme Court laid down the following rules in Corporation of The City of Nagpur v. Employees
regarding the scope of “industry”:
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(i) The definition of “industry” in the Act is very comprehensive. It is in two parts : one part defines it from the
standpoint of 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.
(ii) The history of industrial disputes and the legislation recognises the basic concept that the activity shall be
organised one and not that which pertains to private or personal employment.
(iii) 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.
(iv) If a service rendered by corporation is an industry, the employees in the departments connected with that
service whether financial, administrative or executive would be entitled to the benefits of the Act.
(v) The regal functions prescribed 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 legislation power, administration of law and judicial power.
(vi) If a department of a municipality discharges many functions, some pertaining to industry as defined in the
Act and the other non-industrial activities, the predominant functions of the department shall be the
criterion for the purposes of the Act.
In Management of Safdarjung Hospital v. Kuldeep Singh Sethi, it was held that “an industry is to be found when the
employees are carrying on any business, trade or undertaking, manufacture or calling of employers. If they are not,
there is no industry as such.” It was held that employees in a Government Health Department are not workmen
engaged in an industry.
In order to have a comprehensive, clear and conclusive declaration as to what is an ‘industry’ under the Industrial
Dispute Act, the matter was placed before a Bench of seven judges in Bangalore Water Supply and Sewerage
Board v. A. Rajappa The judgement of the Bench was unanimous and it was held that industry overflows trade and
business. Capital, ordinarily assumed to be a component of “industry” is an expendable item so far as the statutory
definition of ‘industry’ is concerned. Absence of capital does not negative ‘industry.’ Even charitable services do not
cease to be ‘industries’ by definition although popularly charity is not an industry. ‘Profit-making motive is not a sine
qua non of industry, functionally or definitionally.. The main judgment laid down the following principles, saying that
while they are authoritative they are not exhaustive:—
“Industry,” as defined in Sec. 2(j) and explained in Bannerjis’ case, has a wide import.
I.
(a) where (i) systematic activity; (ii) organised by co-operation between employer and employee (the direct
and substantial element is commercial); (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 i.e.; making on a large-scale of (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 the public, joint or private or
other sector.
(c) The true focus is functional and the decisive test is the nature of the activity with special emphasis on the
employer-employee relations.
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(d) If the organisation is a trade or business, it does not cease to be one because of philanthropy animating
the undertaking.
II. Although sec. 2(j) uses words of the widest amplitude in its two limbs, their meaning cannot be magnified to
overreach itself.
“Undertaking” must suffer contextual and associational shrinkage as explained in Banerjis’ case so also service,
calling and the like. This yields the inference that all organised activity, possessing the triple element in point No. I
(supra) although not trade or business, may still “be industry” provided the nature of the activity, viz., the employer-
employee basis bears resemblance to what we find in trade or business. This takes into the fold of ‘industry’
undertakings, callings and service adventures, analogous to the carrying on of trade or business.
III. Application of these guidelines should not stop short of their logical reach by invocation of creeds, cults or inner
sense of incongruity or outer sense of motivation for resultant economic operation. The ideology of the Act being
industrial peace, regulation and resolution of industrial disputes between employer and workman—the statutory
ideology must inform the reach of the statutory definition. Nothing less, nothing more.
(a) The consequences are (i) professions; (ii) clubs; (iii) educational institutions; (iv) co-operatives; (v)
research institutes; (vi) charitable projects and (vii) other kindred adventures, if they fulfil the triple tests
listed in I (supra) cannot be exempted from the scope of Sec. 2 (j).
(b) A restricted category of professions, clubs, co-operatives and even gurukulas and little research labs, may
quality for exemption if in simple ventures substantially and going by the dominant nature criterion
substantively, no employees are entertained but in minimal matters, marginal employees are hired without
destroying the non-employee character of the unit.
(c) If in a pious or altruist mission many employ themselves free or for small honorarium, such as lawyers
volunteering to run a free legal service clinic or doctors serving in their spare hours in a free medical center
or ashramites working at the bidding of the holiness, divinity or like personality and the services are
supplied free or at nominal cost and those who serve are not engaged for remuneration or on the basis of
master and servant relationship then the institution is not an industry, even if stray servants, manual or
technical, are hired. Such undertakings alone are exempt—not other generosity, compassion, development
passion or project.
IV. The Dominant Nature Test—
(a) 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 Delhi University case or some departments are
not productive of goods and services if isolated, even then the predominant nature of the services and the
integrated nature of the departments as explained in the Nagpur Corporation case will be the true test. The
whole undertaking will be “industry” although those who are not “workmen” by definition may not benefit by
the statute.
(b) Notwithstanding the previous clauses, sovereign function, strictly understood qualify for the exemption, not
the welfare activities or economic adventures undertaken by Government or statutory bodies.
(c) Even in departments discharging sovereign functions, if there are units which are industries and they are
substantially severable, then they can be considered to come within s. 2(j).
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(d) Constitutional and competently enacted legislative provisions may well remove an activity from the scope
of the Act. The decisions previously taken in Safdarjung case, Delhi Varsity case, Gymkhana Club case
etc. were overruled by this decision and only one decision of Hospital Mazdoor Sabha was restored and
rehabilitated.”
The whole picture of cases which were overruled and others which were followed becomes clear by the decision of
the Supreme Court in Coir Board v. P.S. Indira Devi in this case, the question was whether the Coir Board
constituted under the Coir Industry Act, 1953 was an “industry.” It was held that while employer is defined in the
context of an industry and the workman is also defined as person employed in an industry, the term “industry” itself
has been defined to mean business, trade, manufacture, undertaking or calling, while the terms business, trade,
manufacture or calling are fairly clear, the term ‘undertaking’ which accompanies these four words gave scope for
judicial expansion of the meaning of the word ‘Industry.’ The words ‘service’ employment and avocation of
workmen’ also being somewhat imprecise like the word ‘undertaking’ have led to varying definitions of ‘Industry’
being given from time to time by judicial pronouncements when the Courts were called upon to decide whether any
particular organization could be considered as an industry or not.
The Supreme Court applied non-conventional interpretation of the word ‘undertaking’ to connote an activity
systematically and habitually undertaken for production or distribution of goods or for rendering material services to
the community at large or a part of such community with the help of employees. Profit motive was considered as not
relevant. This view of an industry covered organisations which would not have normally been considered as
industries. The non-conventional interpretation was adopted because conventional meaning of trade and business
had lost some of this validity for the I.D. Act which was a welfare measure for the benefit of workers. The non-
conventional interpretation was adopted in the case of D.N. Banerji v. P.R. Mukherjee. The Corporation of the City
of Nagpur and its Employees The State of Bombay v. The Hospital Mazdoor Sabha. This non-conventional
interpretation was reiterated in the case of The Workmen of Indian Standard Institution v. The Management of
Indian Standard Institution, by saying that the widest possible connotation should be given to the word ‘industry’
since I.D. Act was a welfare legislation for the welfare of the workers.
However, in another set of cases, the Supreme Court and number of High Courts gave a slightly more restricted
and conventional meaning to the term ‘Industry’ as defined under the I.D. Act, vide Vational Union of Commercial
Employees & v. M.R. Meher, Industrial Tribunal, Bombay, University of Delhi v. Ram Vath, The Secretary, Madras
Gymkhana club Employees’ Union v. The Management of Gymkhana Club, The Cricket Club of India v. Bombay
Labour Union and The Management of Safdarjung Hospital, New Delhi v. Kuldip Singh Sethi. However, views
taken in the Madras Gymkhana case, Safdarjung Hospital case and University of Delhi case were overruled by a
decision of a Bench of 7 Judges of the Supreme Court in the case of Bangalore Water Supply & Sewerage Board v.
A. Rajappa, by a majority of 5 with 2 dissenting.
The definition of ‘Industry’ under the I.D. Act was held to cover all professions, clubs, educational institutions, co-
operatives, research institutions, charitable projects and anything else which could be looked upon as organised
activity where there was a relationship of employer and employee and goods were produced or service was
rendered. Even in the case of local bodies and administrative organisations the Court evolved a ‘predominant
activity’ test so that whenever the predominant activity could be covered by the wide scope of the definition as
propounded by the Court, the local body or other organisations would be considered as an industry. Even in those
cases where the predominant activity could not be so classified, the Court included in the definition all those
activities of that organisation which could be so included as industry, departing from its own earlier decision and
that one had to go by the predominant nature of the activity. In fact the Court observed that even a defence
establishment or a mint or a security press could, in a given case, be considered as an industry, very restricted
exemptions were given from all the embracing scope of the definition so propounded. Pious or religious missions
were considered exempt even if a few servants were hired to help the devotees. Where normally no employees
were hired but the employment was marginal the organisation would not qualify as an industry. Sovereign functions
of the State as traditionally understood would also not be classified as industry though Government departments
which could be severed and labelled as industry would not escape the I.D. Act. The 2 judges dissented from the
above view stating that the dominant nature itself should be applied for deciding whether an establishment is an
industry or not. Even the majority was of the view that legislative exercise was necessary to settle the position.
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Subsequent decisions of the Supreme Court have left some uncertainty about the question of activities and
organisations that can be labelled as Industries under the I.D. Act. In Physical Research Lab v. K.G. Sharma, it
was held that the activities of the Physical Research Laboratories would not be covered by the definition of an
industry under the I.D. Act. Similarly in the case of Sub-divisional Inspector of Post, Vaikam v. Theyyam Joseph.
The establishment of sub-divisional Inspector of post was held to be not an industry but an exercise of sovereign
function. In the case of Bombay Tel. Canteen Employees’ Association, Prabhadevi Telephone Exchange v. Union
of India. the Supreme Court held that the workmen employed in the department canteen of the Telephone Nigam
Ltd. and admittedly holding civil posts were not workmen within the meaning of the I.D. Act. However, in the case of
the General Manager, Telecom v. D. Srinivasa Rao, it was held that the cases of Sub-divisional Inspector of Post,
Vaikam, and Bombay Telephone Canteen Employees Association were not correctly decided in view of the test laid
down in the case of Banglore Water Supply & Sewerage Board’s case.
Looking to the uncertainty prevailing in this area and in the light of the experience of the last 2 decades in applying
the test laid down in the case of BWS&SB, it is necessary that the decision in the Banglore Water Supply &
Sewerage Board’s case is re-examined. The experience in the last 2 decades does not appear to be entirely happy.
Instead of leading to industrial peace and welfare of the community (which was avowed purpose of artificially
extending the definition of industry, the application of the I.D. Act to organisations, which were, quite possibly not
intended to be so covered by the machinery set up under the I.D. Act might have done more damage than good,
not merely to the organisations but also to employees by the curtailment of employment opportunities.
Therefore, 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 organisation 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 organisations, 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 let to a large
number of philanthropic and charitable activity being affected by the I.D. Act. A number of voluntary organisations
used to run workshops in order that the poor or destitute women may earn some income. Voluntary welfare
organisations organise activities like preparation of spices, masalas, pickles or they would secure small orders from
industries for poor women. A small number of employees were employed to assist in the activities. The income
earned by these activities was distributed to the women who were given employment. Such organisations are not
organised 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 interpretations given to the term
‘industry.’
Apart from such activities, there may be other activities also which were undertaken in the spirit of the 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 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. 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 organisations,
professional activities or recreational activities, amateur sports, promotion of arts, all these and many others similar
activities also require to be considered in this context.
Amended definition of ‘Industry’ under the I.D. Act, 1947 by enacting the Amending Act, 1982 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 I.D. Act
there is no reason why the matter should not be judicially re-examined. The Coir Board has been set up to promote
coir industry, open markets for it and provide facilities to make the coir industry’s products more marketable. It is not
Page 17 of 44
set up to run any industry itself, looking to the predominant purpose for which it is setup, it could be called an
‘Industry.’ However, if one were to apply the tests laid down by Banglore Water Supply & Sewerage Board’s case, it
is an organisation where there are employers and employees. The organisation does some useful work for the
benefit of others. Therefore, it will have to be called an ‘industry’ under the I.D. Act.
Such sweeping test was not contemplated by the I.D. Act and it is not that every organisation which does useful
service and employs people can be labelled as ‘industry.’ Therefore, the Hon’ble Chief Justice of India is to consider
whether a larger Bench should be constituted to reconsider the decision in Bangalore Water Supply and Sewerage
Board’s case.
Similarly, construction activity, education, educational institutions, cooperative housing societies are also included in
the definition of ‘industry.’
Activities of Government and Industry
In a welfare State, the State has to undertake many activities which would otherwise be industries and the correct
test to determine whether a particular activity undertaken by the Government in such cases is an industry or not
would be to ascertain whether, if that activity had been undertaken by a private agency, it would have been an
‘industry’ to which the Act would apply. The public welfare function of the State is a sovereign function. The State
does not become an industry in the discharge of such functions. Predominant nature of services and integrated
nature of departments is the true test for determining whether an establishment is an ‘industry’ or not. If there are
units in departments which are industries and are substantially separable, they are ‘industries’, although they are
discharging sovereign functions. On this basis, the telecom department of Union of India has been held to be an
‘industry.’
Regal and Sovereign Functions not ‘Industry’
Regal and sovereign functions cannot be called ‘industries.’ Those activities which a constitutional government can
and must take for governance and which no private citizen can undertake will be outside the scope of definition of
‘industry.’ Administration of justice, maintenance of law and order, repression of crimes are a few of the regal and
sovereign functions. It would not matter that they have been delegated or are carried on by government servants.
Whether a particular function of the State is or is not a sovereign function depends on the nature of the power and
the manner in which it is carried on. Pachgaon Parwati Scheme in Pune District and social foresting work in
Ahmednagar District undertaken by the Forest Department of the State Government was held to be an industry and
not a part of sovereign functions of the State. Functions carried on by All India Radio and Doordarshan are not
confined to sovereign functions but they carry on commercial activity for profit by getting commercial
advertisements telecast or broadcast by them, therefore, they are ‘industries’ under section 2(j).
Municipal Corporation
A corporation may discharge a dual function. When it is statutorily entrusted with regal functions such as making of
laws, disposal of certain cases judicially, etc. it is excluded from the ambit of the definition of ‘industry.’ But when it
is entrusted with welfare activities, it comes under the term ‘industry.’
Other activities of a municipality except regal functions, if undertaken by an individual they would have been an
industry, then they would equally be industry in the hands of a municipality or a local body.
Town and Urban Improvement
Trusts created by statute for town and urban improvement will fall within the definition of ‘Industry.’ Therefore,
Nagpur Improvement Trust was held to be an ‘industry’ within the meaning of section 2 (j).
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Professions
Professions are not industries. The attributes of a profession are—
(a) activities depends upon intellectual skill of the professional and are not run on commercial lines.
(b) the activity involve integrity, degree of intelligence and academic or professional qualifications.
(c) the activity is controlled by professional body.
Law, medicine, ecclesiastical, chartered accountants are professions but that of an insurance surveyor is not a
profession.
Hospitals and Charitable Institutions
The Supreme court has discussed the question whether hospital is an industry or not in a number of cases. In State
of Bombay v. Hospital Mazdoor Sabha, the Supreme Court held that J.J. Group of hospitals is an industry for the
purposes of retrenchment and reinstatement of its employees. On this basis, an Ayurvedic College of Pharmacy
manufacturing medicines for sale and for benefit of students of the college was held to be an industry.
However, the employees in a Government Health Department have been held to be not workmen engaged in an
industry. The hospitals run by the Government as a part of its function is not an industry.
In Dhanrajgiri Hospital v. Workmen, it was held that this hospital was not an industry because it was not carrying on
any economic activity on the nature of trade or business. However, in view of the Supreme Court decision in
Bangalore Water Supply & Sewarage Board v. Rajappa, the case of Dhanrajgiri hospital has become overruled. In
Bangalore Water Supply case, it was held that the charitable institutions fall into three categories:—
(a) those that yield profit, but the profits are siphoned off for altruistic purposes;
(b) those that make no profit but hire the services of employees as in any other business, but the goods and
services which are the output are made available at a low or no cost to the indigent poor; and
(c) those that are 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.
The first two categories are industries but not the third, on the assumption that they all involve co-operation
between employers and employees.
On the analysis of the abovestated case law it can be said that such hospitals as are run by the Government as part
of its sovereign functions with the sole object of rendering free service to the patients are not industries. Those
hospitals, whether charitable or commercial, public or private, would be industry it they fulfill the triple test laid down
in Bangalore Water Supply case. Where there is—
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(i) a systematic activity,
(ii) organised by co-operation between employer and employee (the direct and substantial element is
commercial),
(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 services geared to celestial bliss, of material things, prima facie,
there is an “industry” in that enterprise. This is known as triple test.
Indian Red Cross Society (Haryana State Branch) and Indian Cancer Society, Bombay have been held to be
industries.
Educational Institutions
In the case of University of Delhi v. Ramnath, the question arose whether an educational institution is an industry
or not? In this case, the services of two drivers for College for women of Delhi University were terminated because
the running of buses for transporting girls students was going into a loss. The termination order was challenged on
the ground that the drivers were workmen and the termination of their services amounted to retrenchment. They
demanded retrenchment compensation and filed petitions before the Industrial Tribunal. The Tribunal decided in
favour of the drivers but the University of Delhi challenged the decision of the Tribunal contending that the university
is not an industry. The Supreme Court held that the work of imparting education is more a mission and a vocation
than profession or trade and thus, university is not an industry. However, later on the Supreme Court itself overruled
its decision and on the basis of the triple test laid down in Bangalore Water Supply case, held that even a university
would be an industry. Only those employees who will come within the definition of workmen under the Industrial
Disputes Act, 1947 will be able to take the benefits given to the workmen under the Act.
In another case, the question was whether the society70 which owned two colleges was purely an educational
institution or industry. The Calcutta High Court observed that our conception of society is not static but it keeps on
changing with the time. An undertaking which depends on the intelligence or capacity of an individual does not
become an industry merely because it is a large establishment. Where the organisation does not depend upon the
intellectual skill of any individual but is run with a profit motive, it will come under the definition of “industry.”
In a case, Osmania University has been held to be not an industry. The Supreme Court held in Ahmedabad Textile
Industry’s Research Association v. State of Bombay, that although the association was established for the purpose
of research, its main object was the benefit of the members of the association, the association is organised and
arranged in the manner in which a trade or business is generally organised; it postulates co-operation between
employers and employees; moreover the personnel who carry on the research have no right in the result of the
result. Thus, the association was held to be an industry.
In another case, the Asiatic Society was held to be not an industry by the Calcutta High Court on the basis that a
society which is established with the object of catering to the intellectual needs of man by promoting general
knowledge of the country by conducting research and publishing journals and books cannot be an industry.
The Indian institute of Petroleum and management of a private educational institution have been held to industries.
The Central Institute of fisheries and Physical Research Laboratory have been held to be not industries. Where an
employer ran an Ayurvedic College, a pharmacy and a hospital and bulk of the medicines manufactured in such
pharmacy was sold in the medicine, there was no evidence to show that the hospital and the pharmacy were run
only for the benefit of students studying in the Ayurvedic College, the pharmacy was held to be an ‘industry.’
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Clubs
In Madras Gymkhana Club Employees’ Union v. Management, the object of the club was to provide venue for
sports and game and facilities for recreation and entertainment. The club also had a catering department which
provided food and refreshment generally as well as on special occasions. The club was held to be not an industry.
In Cricket Club of India v. Bombay Labour Union, the question was whether the Cricket Club of India, Bombay was
an industry or not although it was incorporated as a company under the Companies Act, 1956. It was held that the
club was a self-service institution and not an industry. Both these cases were overruled and on the basis of
Bangalore Water Supply case, it has been held that large clubs are ‘industry.’
A restricted category of professions, clubs, co-operatives and even Gurukulas and little research laboratories may
qualify for exemption if, in simple ventures, substantially and going by the dominant nature criterion substantively,
no employees are entertained, but in minimal matters marginal employees are hired without destroying the non-
employee character of the unit.
Trust for Promotion of Art and Culture
On the basis of the facts the Supreme Court found that the Bharat Bhawan Trust was engaged only in the
promotion of art and preservation of artistic talent. Its activities were not meant for large scale production involving
co-operation of efforts of employer and employee. Therefore, the courts, concluded that it was doubtful. Whether it
could be regarded as an industry.
Forest Department
The forest department of state has been held to be an industry. In comparison in another case, the court said that
ordinarily a Department of the Government is not to be regarded as an industry. The burden lies on the person
(dismissal of a temporary clerk) to prove that the establishment in which he is working is an industry.
Marketing Committee
In interpreting any statute, the pith and substance of the statute should be found out. Where none of the functions
of the Market Committee established under Karnataka Agricultural Produce Marketing (Regulation) Act, 1966 were
found to be sovereign or inalienable functions of the State, it was held that such a Market Committee was an
“industry.” The fact that it was not constituted for making any profits was inconsequential. Its temporary employees
who had not become Government servants under the provisions of the Karnataka Act were held to be “workmen”
under the Industrial Disputes Act, 1947.
Temples
Where the Jain Temple was held to be not an ‘industry’, the Supreme Court in the facts and circumstances of the
case awarded compensation to the workman.
Other Bodies
Other bodies like Federation of Indian Chamber of Commerce, company carrying agricultural operations, co-
operative societies, Bihar Khadi Gramudyog Sangh, Irrigation department of the State Government, Telecom
department, and Public Works Department have been held to be industries. But a circulating library run by the
employees of Central Railway, a temple in which the activities of Dharm, Dhyan, Bhakti and Puja are carried on
have been held to be not an ‘industry.’ Whether the octroi department of gram panchayat is an industry or not, the
question was left open by the court.
Agricultural operations carried on by a limited public company like any other business or trade by investing capital
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and employing labour is held to be an ‘industry’ within the meaning of section 2(j) of the Act. Where a company
owned flats for letting them out and workers were appointed for maintenance of flats and giving services, it was held
that such activity satisfies the definition of ‘industry.’
Indian Standards Institution registered under the Societies Registration Act, 1860 has been held to be an ‘industry.’
Research Association founded for the purpose of establishing a textile research institute would be an industry.
The activities of Pinjrapole in breeding cattle and selling milk amounted to running business on commercial lines,
though not of the normal type of a well-organised dairy farm. When value of milk sold by Pinjrapole in the market
was substantial and more than the milk utilised for the sick and infirm animals, activity of Pinjrapole was found to be
carried an as business for making profit and hence, it was held to be an ‘industry.’ Where personal services are
rendered to members of society constituted only for purposes of those members, society has been held to not an
‘industry’ and is employees were also held to be not ‘workmen.’
A solicitors’ firm carrying on work of attorney has been held to be not an ‘industry.
Industrial Dispute [Section 2(k)]
Section 2(k) of the Industrial Disputes Act, 1947 defines an ‘industrial dispute’ as follows:
“Industrial dispute” means 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 conditions of labour of any person. The definition can be divided into three parts:
— first, there must be a dispute or difference;
— second, the dispute or difference must be between employers and employers, or between employers and
workmen or between workmen and workmen;
— third, the dispute or difference must be connected with the employment or non-employment or the terms of
employment or with the conditions of labour of any person.
Limitations of the Definition
There are two crucial limitations of the definition of industrial dispute:
(i) The dispute must be a real dispute between the parties to the dispute so as to be capable of settlement or
adjudication resulting in one party to the dispute giving necessary relief to the other, and
(ii) The person regarding whom the dispute is raised, must be one in whose employment, non-employment,
terms of employment, conditions of labour (as the case may be) the parties to the dispute have a direct and
substantial interest. A dispute between a union and an employer’s association is not industrial dispute.
Connection of the Dispute with any Industrial Matter or Demand

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Demands give rise to industrial disputes. It is implicit in the demand that it should be made to the employer or
employee. Within the meaning of section 2 (k) a dispute can arise only when there exists a demand by workman
and that such demand is refused by the employer. The written demand directly on the management is not in all
cases a necessary condition, the demand can be made even through the conciliation officer.
The words “any person”, for the purpose of raising a dispute was held not to include a person who was offered
appointment but could not join because of failure to accept his joining report. The existence of employer-employee
relationship was considered to be necessary.
Individual and Collective Industrial Disputes
Both the individual and collective disputes may ripen into industrial dispute. In its true nature an industrial dispute is
a collective dispute. Even if at the inception a dispute is initiated by an individual, yet if it is taken up by the fellow-
workers or a union, or a sufficient number of workers, it may assume the collective character and would become an
industrial dispute. However, a dispute which continues to retain its individual character cannot be regarded as an
industrial dispute. It is also not necessary that a majority should take up an industrial dispute. It is sufficient if a
substantial group of workmen take it up.
Individual Dispute when Industrial Dispute—Deemed Industrial Dispute [Section 2A]
A new section 2A was added by the Act of 1965 in the Act which specified categories of individual disputes which
are also deemed to be industrial disputes. The section has been revised again by the Act of 2010. The section
reads:
Dismissal etc., of an individual workman to be deemed to be industrial dispute (Section 2-A).
Where any employer—
(i) discharges, dismisses, retrenches or otherwise terminates the services of an individual workman
(ii) any dispute or difference between that workman and his workmen
(iii) connected with, or arising out of, such discharge, dismissal, retrenchment or termination shall be deemed
to be an industrial dispute
(iv) notwithstanding that no other workman nor any union of workmen is a party to the dispute [Sub-section
(1)].
Sub-section (2) provides that notwithstanding anything contained in section 10, any worker as above
stated may make an application directly to the Labour Court or Tribunal for adjudication of his dispute
after expiry of forty five days from the date he had made application to the conciliation officer of the
appropriate Government for conciliation of the dispute. On receiving such application, the Labour Court
or Tribunal will have powers and jurisdiction to adjudicate upon the dispute as if it was a dispute
referred to it by the appropriate Government in accordance with the provisions of this Act. All
provisions of the Act will apply in relation to such adjudication as they apply to industrial dispute
referred to it by the appropriate Government.
Sub-section (3) provides that the application shall be made to the Labour Court or Tribunal before the
expiry of three years from the date of discharge, dismissal, retrenchment or otherwise termination of
service as specified in sub-section (1).
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Individual dispute in cases other than discharge, dismissal or termination of service of a workman can acquire the
character of industrial dispute, if espoused by substantial number of employees or union of employees. Where
claim of an employee to be declared as semi-permanent on completion of two years’ service was found to be not an
industrial dispute, writ petition was held to be maintainable inspite of not availing alternative remedy under Industrial
Disputes Act.
Steps to make statutory provision enabling workman to approach Labour Court or Industrial Tribunal directly without
requirement of reference by Government in case of dispute governed by section 2-A was held to be appropriate.
In a case, a workman’s name was strike off the rolls by the management when he absented for eight days. He
challenged the order and succeeded at all levels viz., Labour Court, writ court and Division Bench. Management
appealed and it was held that striking off the name amounts to termination and retrenchment when the workman
was not absent for eight consecutive days. The management’s request to refer the issue to a seven-member bench
was rejected and it was held that the management’s contention that section 2A is ultra vires cannot be entertained
at the appellate stage without any basis having been laid at earlier stages.
Respondent conductor was found guilty of issuing tickets of lower denomination of 50 paise instead of 4 rupee
tickets to passengers who were illiterate. He was removed from the service for the dishonesty. The decision of
removal was upheld by the labour court as well as a single judge of High Court but a Division Bench in appeal held
that the punishment gave excess gravity to the offence and directed the appellant to give fresh appointment to the
respondent. The Supreme Court observed that gravity of misconduct could not be minimised by the fact the
conductor was not earlier caught in such dishonest misconduct and held that there was no justification for
interfering with the punishment.
In a case, disciplinary proceedings were initiated by the appellant against some of its workmen and in the
preliminary enquiry, the workers were found to be guilty and punishment was imposed on them. The aggrieved
workers contended before the industrial tribunal that the enquiry was not conducted properly and there was serious
violation of principles of natural justice on the basis that the workmen during the course of enquiry sought the
assistance of lawyer to help them in the enquiry proceedings but their plea was rejected by the enquiry officer and
thereafter they did not participated in the proceedings and the enquiry officer decided against them. The tribunal as
well as the High Court quashed the enquiry proceedings and the appellant was given a chance to prove the charge
afresh by adducing evidence before the tribunal. In appeal by the employer, the Supreme Court observed that in
this case the presenting officer was not a law graduate nor was he a legally trained person and further the nature of
charges against the workmen were not complex involving voluminous records. The assistance of a lawyer for the
workmen was not required in the disciplinary proceedings. The Supreme Court directed the tribunal to consider the
matter on merits afresh.
Delay in initiation or conclusion of departmental inquiry is not always a ground to set aside departmental inquiry and
quash charges. It has been held that court should consider all relevant facts and determine whether setting aside of
disciplinary proceeding is in interest of honest administration.
In a case, a scheme was formulated for the gradual absorption of employees of Vayudoot Company (in Short Haul
Operations Department) in the Indian Airlines, when Vayudoot got merged in Indian Airlines. The writ petitions were
filed by them and certain other persons challenging the scheme. A single Judge of the High Court allowed the
petitions with certain directions but a Division Bench of the High Court in appeal did not upheld that decision.
Against the decision of the Division Bench, the appeal was filed in the Supreme Court. The Supreme Court
observed that it was optional for the Short Haul Operations Department employees to join the main stream of Indian
Airlines. Once they chose to join the main stream, they could not turn back and challenge the conditions. Merely
because some of the employees of Indian Airlines would suffer in terms of seniority and chances of promotion, the
whole scheme could not be rejected as discriminatory or arbitrary. If the erstwhile Vayudoot employees were fixed
Page 24 of 44
horizontally as the junior most employees of that post, there would be no question of injustice. The Supreme Court
further observed that in case of policy decision employees might suffer to certain extent, but such sufferings should
be taken to be incidence of service. The appeal was dismissed by the Supreme Court.
In case of termination of service due to misconduct, if workman is held entitled to reinstatement, it does not
necessarily justify grant of back wages. The payment of back wages is a discretionary power which has to be
exercised keeping in view the facts in entirety. Once employer has lost confidence in employee and bona fide loss
of confidence is affirmed, reinstatement cannot be directed. It has been held by the Supreme Court while
considering whether punishment of termination upon a bank employee is shockingly excessive or disproportionate
to gravity of proved misconduct, loss of confidence in an employee is an important and relevant factor. Bank was
held to be justified in contending that not only employees who are dishonest but those who are guilty of gross
negligence are not fit to continue the service. It was held by the Supreme Court that High Court’s interference with
the findings of departmental enquiry without expressly holding that finding of guilt was erroneous. Finding of guilt by
departmental enquiry was upheld by the Supreme Court but punishment was modified from dismissal to compulsory
retirement. In case of misconducts of grave nature like theft or corruption, it was held by the Supreme Court that no
punishment other than dismissal is punishable.
Where appellant appointed at Class III post in a public sector enterprise could not maintain standard of
confidentiality and discretion required to be maintained and indulged in making scandalous remarks before press
official alleging widespread corruption within the organization, his conduct was found to be not of a bona fide whistle
blower and his termination was held to be not disproportionate to misconduct.
Where a departmental enquiry is independent of criminal proceedings, acquittal in criminal court will be of no help to
the employee. Allegations of theft against the respondent were proved in fair departmental enquiry and he was
dismissed from services. However, he was acquitted of offences in criminal revision. The question arose that what
will be the effect of such acquittal? It was held that question of considering reinstatement after decision of acquittal
or discharge by a competent criminal court arises only and only if dismissal from services was based on conviction
by criminal court in view of provisions of Article 311(2) of Constitution or analogous statutory rules applicable in a
case. It was further held by the Supreme Court that even if a person stands acquitted by a criminal court, domestic
enquiry can be conducted since the standard of proof required in them are different. It was held that delinquent
employee was found guilty of charges and natural justice was adhered to in the proceedings, punishment of
dismissal was proportionate to delinquency. It was further held that once employer has lost confidence in the
employee and bona fide loss of confidence is affirmed, reinstatement cannot be directed by court.
It was further held by the Supreme Court that order of the Labour Court upholding punishment of dismissal should
not have been interfered by the High Court unless the charges leveled in domestic enquiry and criminal trial were
same and the witnesses were also the same. Order of dismissal was modified by High Court to order of termination
with terminal benefits. This was not challeng32ed by the employer, therefore, delinquent employee was held
entitled to said relief.
Where punishment of compulsory retirement was imposed on the Store Attendant in Bank Note Press due to
contracting second marriage and nondisclosure of it, the Supreme Court held that court should not interfere with
employer’s decision in matters of punishment unless it is illogical, or suffered from procedural impropriety or
shocking disproportionality.
Non-supply of the documents relied on by the Inquiry Officer do not vitiate the departmental proceedings in entirety.
Directing reinstatement of employee in all cases of such failure reduces rules of justice to mechanical ritual. A
settled principle of natural justice is that if any material is sought to be used in an enquiry, then copies of that
material should be supplied to the party affected.
In a case involving regularisation of service, the employee discharged duties as material checking clerk for 6 years
and also passed written examination but secured less marks in interview, directions were issued to consider him for
selection to post in ‘open time’ and on such selection to grant him seniority too.
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Where labour court gave direction for reinstatement of workman but without back wages and no specific direction
entitling consequential benefits to workman was given, it was held that he would not claim benefit of national
increments during period of service.
Only general principles of evidence apply to the proceedings before labour and industrial tribunal but provisions of
the Evidence Act do not apply. Where a workman is dismissed from service without holding enquiry then it is on the
management to prove that his dismissal was justified as it was not possible to conduct enquiry to prove misconduct
of the workman. Burden of proving a fact lies on the party who substantially affirms it and not on the party who
denies it. Labour court was right in putting up onus on the management to prove that dismissal was justified but
onus should not have been shifted on the appellant workman to prove that his dismissal was unjustified.
In a case the question was under what circumstances dismissal without enquiry is permissible? Respondent went
on unauthorized leave on two occasions for 266 days which was condoned by the appellant bank. Again she went
on leave without sanction for 150 days, bank invoked clause 17(b) of the Fifth Bipartite Settlement and issued
notice to her to join within 30 days failing which it will presumed that she has voluntarily terminated service. She
failed to join and bank treated her as deemed to have voluntarily terminated her employment. It was held by the
Supreme Court that no establishment can function if it allows its employees to behave in this manner. Order of the
bank was held to be valid.
Complicated principles and procedures laid down in Civil Procedure Code and Evidence Act are not applicable to
domestic enquiry. The only right of a delinquent employee is that he must be informed of charges against him and
he must be given full opportunity of defending himself against those charges.
Termination Simpliciter
When an order of termination can be treated as simpliciter or when it can be treated as punitive and when a stigma
is said to be attached to an employee discharged during the period of probation, was a question before the
Supreme Court in a case involving termination of service of an employee under U.P. Temporary Government
Servants (Termination of Service Rules, 1975). The Supreme Court observed, “if findings were arrived at in an
enquiry as to misconduct, behind the back of the officer or without a regular departmental enquiry, the simple order
of termination is to be treated as ‘founded’ on the allegations and will be bad. But if the enquiry was not held, no
findings were arrived at and the employer was not inclined to conduct an enquiry, it would only be a case of motive
and the order would not be bad. Similar is the position if the employer did not want to enquire into the truth of the
allegations because of delay in regular departmental proceedings or he was doubtful about securing evidence. In
such a circumstance, the allegations would be a motive and not the foundation and the simple order of termination
would be valid. For a long line of decisions it appears to us that whether an order of termination is simpliciter or
punitive has ultimately to be decided having due regard to the facts and circumstances of each case, Many a times
the distinction between the foundation and motive in relation to an order of termination is either then or overlapping.
It may be difficult either to categorise or classify strictly orders of termination simpliciter falling in one or other
category, based on misconduct as foundation for passing the order of termination simpliciter or on motive on the
ground of unsuitability to continue in service.” Proportionately of punishment depends upon the circumstances in
which alleged misconduct was committed as well as nature of misconduct.
Reappreciation of Evidence by High Court
A Head Constable on band-o-bast-duty was held guilty of misconduct of committing theft of C.C.T.V. lens costing
Rs. 15,000 and was dismissed from service. The High Court quashed the dismissal of head constable and granted
reinstatement with back wages and benefits. In appeal by the State, the Supreme Court observed that there was no
allegations of violation of natural justice or illegality in conducting the enquiry. It was found that the High Court
reappreciated the evidence as an appellate authority. The High Court was held to have committed patent error of
law, as it could not under Article 226 of the Constitution of India act as an appellate Court and reappreciate the
evidence.
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An Individual dispute was allowed to be referred even though the facts constituting the cause of action transpired
before s. 2A came into force. The section does not prescribe any time-limit for making a reference. The discretion of
the appropriate Government under s. 10(1) to make a reference or not is not affected by the section. Where an
application of the workman under s. 10 is pending before a Labour Court, his application for reference of the same
dispute under s. 2A was entertained. If the requirements of S. 2A are satisfied, the jurisdiction of the civil courts
becomes ousted.
The dispute raised by the employee concerned is a deemed industrial dispute notwithstanding that no other
workmen or their union came forward to support the dispute. Section 10 which authorises the appropriate
Government to make reference does not distinguish a dispute under s. 2(k) from that under s. 2A. Even where the
sponsoring workers or a union withdraws its support, dispute under s. 2A remains an industrial dispute and can be
adjudicated accordingly.
An individual dispute can be raised for testing the validity of a retirement. A dispute which does not fall within the
periferry of s. 2A can qualify as an industrial dispute if it is sponsored by other workmen or unions. The claim of an
employee to be declared as semi permanent on completion of two years’ service was held to be not an industrial
dispute, a writ petition was accordingly allowed. A civil suit or arbitration would also be available as remedies. The
civil court has jurisdiction to entertain the grievance of a person in relation to his service conditions unless it
becomes an industrial dispute by espousal as contemplated by the decisions of the Supreme Court in Bombay
Union of Journalists and Premier Automobiles cases.
An industrial dispute under s. 2A does not abate or come to an end on the death of the workman concerned.
In a case, Labour Court found that the bus conductor after collecting money from the passengers had not issued
tickets to them; there was intention to misappropriate the money collected from passengers. High Court directed
reinstatement of the conductor with back wages on the ground that the passengers found without tickets were not
examined and cash with the conductor was not checked. It was held by the Supreme Court setting aside the
judgment of the High Court that for reversing findings of fact recorded by domestic tribunal, cogent reasons should
be provided by the High Court and non-observance of this would vitiate judicial order.
A Collective Dispute
A collective dispute dose not mean that all the workmen or a majority of them of the establishment concerned
should sponsor and support the dispute. In all cases outside section 2A of the Act, a labour dispute becomes an
industrial dispute if it has the support of a substantial section of the workmen concerned in the establishment. This
is also called community of interest.
Nature of Proof Required to Establish Collective Character and Community of Interest
What would be a substantial or a considerable section of workmen in a given case would, of course, depend upon
the particular facts. That an industrial dispute is supported by other workmen will also have to be established either
in the form of a resolution of a union of which the workmen may be members or of the workmen themselves, who
support the dispute, or in any other manner. For example, gratuity is a collective dispute and it is not necessary that
it should be supported by substantial number.
Where there is a general union and at its instance an industrial dispute is referred for adjudication, the mere fact
that the general union has on its roll only a few of the workmen of a mill as its members, that in itself would not be
sufficient to show that there is a collective dispute. In such a case not only should it be proved that the workmen
who are members of the general union formed a substantial or a considerable section of the workmen of the
particular mills, but also that in order to vest the dispute with the character of an industrial dispute, those members
participated together and arrived at an understanding, either by a resolution or by other means, and collectively
supported on the date of the reference the demand or the cause of an individual dispute. In ascertaining whether
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there has been such a collective expression and support, reference to workmen of other establishments who
happened to be members of the general union would be irrelevant.
Supporting Workmen must be Directly and Substantially Interested
“Those who seek to support the cause of a workman must themselves be directly and substantially interested in the
dispute; 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.” Workmen cannot raise dispute about non-
workmen.
Support must be Forthcoming on the Date of Reference
Support must Come from Employees of the Same Establishment and of the Same Employer
Where an employer at Madras had an establishment at Bombay and the dispute was in relation to an individual
workman in the Bombay establishment, it would not become an industrial dispute even if the individual dispute was
supported by the workmen in the same industry in Bombay or by the workmen of the employer in Madras.
A Dispute Espoused by Foreign Union cannot be Industrial Dispute
A dispute between a line operator and its management which was not espoused by any of the unions of workmen
employed in similar or allied trades, but by a foreign union, viz., U.P. Working Journalists Union, Lucknow, with
which the lino operator had no connection whatsoever, was held to be an individual dispute and the reference made
for such a dispute was held to be bad.
Union need not be Recognised: All Workmen need not be Parties
A dispute becomes an industrial dispute even where it is sponsored by a union which is not registered or where the
dispute raised is by only some of the workmen because in either case the matter falls within sec. 18 (3) (a) and (b)
of the Act.
Membership ofunion is not Conclusive as to its Nexus with Dispute
Mere membership of the union is not conclusive as to its nexus with the dispute. Once the nexus is established, the
condition of antecedent membership of the union recedes to the background and cannot by regarded as one of the
substance of the rule.
It is not necessary that on the date on which a disciplinary action is taken in respect of an employee, the cause of
the aggrieved workmen should be taken up by the union or the substantial section of the workmen.
Number of Workmen Required to Make an Industrial Dispute
No hard and fast rule can be laid down as to number of workmen whose association will convert an individual into
an industrial dispute. That must depend on the facts of each case, and the nature of the dispute. The group might
even be a majority but it must be such as to lead to an interference that the dispute is one, which affects workmen
as a class.
Where the cause of an individual workman was taken up by the union which had twenty five percent of the entire
workers as members, it was held that a substantial section or an appreciable number of workmen had taken up the
cause of the individual workman and, therefore, the dispute was an industrial dispute. Even when most of the
workmen are not members of the union espousing a cause, the dispute will be an industrial dispute and the
conciliation officer would be entitled to hold proceedings. A dispute may be raised by a minority group of workers.
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Subsequent withdrawal of sponsoring workers so as to reduce the dispute to its original status of an individual
dispute, would not militate against the dispute being disposed of as an industrial dispute.
Well Recognised Sections may take up Dispute
A well-recognised section of an undertaking like clerical staff should be considered as a unit for the purpose of the
application of the rule that a considerable body of workmen should support the dispute in order to make it an
industrial dispute.
Community of Interests
Section 2A has not changed the principle of community of interests so far as industrial disputes are concerned.
(p) Where a workman raises an industrial dispute and dies during its pendency, the legal heirs of the deceased
workman cannot be deprived of their right to continue the proceedings and claim benefits as successors.
The workman may have withdrawn the demands with a view to negotiating with the employer, but such withdrawal
of demands cannot be said to be “settlement” as contemplated by sec. 2(p) of the Act.
(q) Where a workman dismissed from service and directed to be reinstated accepts such reinstatement with back
wages, he cannot afterwards raise dispute regarding back wages. Such dispute has been held to be not
maintainable.
Industrial Establishment or Undertaking [Section 2(KA)]
“Industrial establishment or undertaking” means an establishment or undertaking in which any industry is carried on.
The proviso to the section says that where many activities are carried on in any establishment and only one or
some of the activities are industries then—
(a) in case the unit carrying on industrial activity is severable from the other units of the same establishment,
such unit shall be deemed to be a separate industrial establishment.
(b) if the predominant activity carried on in any establishment is an industry and other activities carried on in
the same establishment are—
(i) not severable from the predominant activity, and

(ii) for the purpose of carrying on such predominant activity,
the entire establishment will be deemed to be an industrial establishment or undertaking.
A place where any industry is carried on is regarded, for the purposes of the Act, an industrial establishment or an
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undertaking. Where several activities are being carried on at a place and only one or more of them qualify as
industry, the place where such activity is being carried on would be regarded as an industry provided that it is
severable from the rest of the undertaking or establishment. Where the predominant activity is of industrial nature
but is not severable from the rest of the activities then the whole of the place would be regarded as an industrial
establishment if the other activities are being carried on for the purpose of aiding the carrying on the predominant
activity.
Insurance Company [Section 2(KK)]
‘Insurance Company’ means an insurance company as defined in section 2 of the Insurance Act, 1938 (4 of 1938),
having branches or other establishments in more than one State.
The definition has been defined in term of its definition in s. 2 of the Insurance Act, 1938, According to Insurance
Act, an insurance company means any insurer being a company, association or partnership which may be wound
up under the Indian Companies Act, 1913 (now of 1956) or to which the Indian Partnership Act, 1932 applies.
Khadi [Section 2 (KKA)]
“Khadi” has the meaning assigned to it in clause (d) of section 2 of the Khadi and Village Industries Commission
Act, 1956 (61 of 1956). According to Khadi and Village Industries Commission Act, 1956, ‘Khadi’ means any cloth
woven on handlooms in India from cotton, silk or wollen yarn handspun in India or from a mixture of any two or all of
such yarns.
Labour Court [Section 2(KKB)]
‘Labour Court’ means a Labour Court constituted under s. 7 of the Industrial Disputes Act, 1947. The Labour Courts
are constituted under s. 7 for adjudication of industrial disputes relating to matters specified in the Second
Schedule. The Labour Courts are constituted by the appropriate Government. Some other functions under the Act
can also be assigned to them. [For further details see under s. 7].
Lay-off [Section 2(KKK)]
“Lay-off” means the failure, refusal or inability of an employer to give employment to a workman whose name is
borne on the muster rolls of his industrial establishment and who had not been retrenched on any of the following
grounds:—
(i) shortage of coal, power or raw materials, or
(ii) accumulation of stocks, or
(iii) breakdown of machinery, or
(iv) natural calamity, or
(v) for any other connected reason.
The explanation given with the provision says that when a workman (whose name is borne on the muster rolls of
the industrial establishment) presents himself on the fixed time during normal working hours on any day, he has to
be given employment by the employer within two hours of his so presenting. If the workman is not given work within
two hours, he shall be deemed to have been laid-off for that day.
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The proviso to the section says that when a workman who comes for first half of the shift is asked to present himself
for work during the second half of the shift, he shall be deemed to have been laid-off only for one-half of that day.
The proviso further provides that even if after presenting himself in the second half of the shift he is not given work,
he shall not be deemed to have been laid-off for the second half of the shift for the day but he will be entitled to full
basic wages and dearness allowance for that part of the day.
(Chapter V-A of the Act deals with detailed provisions about lay-off and retrenchment).
Lock-out [Section 2(L)]
“Lock-out” means the—
(i) temporary closing of a place of employment, or
(ii) the suspension of work, or
(iii) the refusal by an employer to continue to employ any number of persons employed by him.
It comprehends the action of an employer in temporarily closing down his undertaking or refusing to provide work at
all, provided that by so doing he is seeking to compel his employees to accept demands made either by him or
another employer or to withdraw demands made by them on him or by other employees upon another employer or
other employers. As the strike is a weapon in the hands of workers, lock-out is a weapon in the hands of employers.
Ingredients of a Lock-out
Following are the ingredients of a lock-out
(i) Temporary cessation of work or withholding of work in some form.
(ii) The element of a demand for which the factory is locked out.
(iii) The intention to re-open or take the workers back if they accept the demands.
Termination of Service and Lock-out
Termination of service does not amount to lock-out because in termination of service the employment or industrial
relationship is severed or broken whereas in a lock-out there is only suspension of relationship. Termination of
services of more than one person at the same time would not be lock-out.
Suspension and Lock-out

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A suspension of workmen is not a lock out even if it is for indefinite period, without pay, provisional of a number of
workmen or simultaneously.
Retrenchment, Closure and Lock-out
Termination of employment by closure or retrenchment does not amount to lock- out.
Punishment and Lock-out
A lock-out is neither an alteration of the conditions of the service of the workmen, nor a discharge, nor punishment
whether by dismissal or otherwise of the workmen within the meaning of the section 33 of the Industrial Disputes
Act, 1947. It is not a lay-off also.
Major port [Section 2(LA)]
‘Major port’ means a major port as defined in clause (8) of section 3 of the Indian Ports Act, 1908 (15 of 1908).
Mine [Section 2(LB)]
‘Mine’ means a mine as defined in clause (j) of sub-section (1) of section 2 of the Mines Act, 1952 (32 of 1952).
National Tribunal [Section 2(LL)]
‘National Tribunal’ means a National Industrial Tribunal constituted under s. 7B. The Central Government may, by
notification in the Official Gazette, constitute one or more National Industrial Tribunals for adjudication of 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.
Office-bearer [Section 2(LLL)]
‘Office-bearer’, in relation to a trade union, includes any member of the executive thereof, but does not include an
auditor. The members of the executive of a trade union are its office-bearers. The auditor is not included in the
officebearers.
Prescribed [Section 2(M)]
The term ‘prescribed’ means prescribed by rules made under this Act.
Public Utility Service [Section 2(N)]
The concept of “public utility service” is for prescribing the procedure of resorting to lock-out and strike so that one
does not easily take liberty with such services. A thing of public utility means something which are as vitally
essential to the society as an essential commodity. It will include any business enterprise, such as a gas company,
performing an essential public service. The definition uses the word means but is of enumeratory nature. It is a
definition of inclusion. The items included are as follows:
(i) transport services for carriage of passengers and goods including railway service.
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(ia) services connected with the working of any major port or dock.
(ii) any section of an industrial establishment on the working of which the safety of the establishment and its
workmen depends.
(iii) any postal, telegraph or telephone service.
(iv) any industry which supplies power, light or water to the public.
(v) any system of public conservancy or sanitation.
(vi) any industry specified in the First Schedule which the appropriate Government may declare to be a public
utility service. This can be done if the appropriate Government is satisfied that any public emergency or
public interest so requires. The declaration has to be through notification in the official Gazette. The period
for which the declaration will last has also to be specified. In the first instance such period is not to exceed
six months. The period can be extended for further block of six months on each occasion as long the
appropriate Government considers it necessary for meeting the demands of the emergency or public
interest.
Railway Company [Section 2(O)]
The term ‘Railway Company’ means a railway company as defined in s. 3 of the Indian Railways Act, 1890 (9 of
1890). This Act was replaced by the Railways Act of 1989. The new Act does not carry any definition of a railway
company. It rather defines ‘railways’ in s. 2(31) and ‘railway administration’ in s. 2(32).
Retrenchment [Section 2(OO)]
“Retrenchment” means the termination by the employer of the service of a workman for any reason whatsoever,
otherwise than as a punishment inflicted by the 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 the non-renewal of the contract of employment
between the employer and the workman concerned on its expiry or of such contract being terminated
under a stipulation in that behalf contained therein; or
(c) termination of the service of a workman on the ground of continued ill-health;
“Retrenchment” means 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 when a workman is re-employed after the age
of retirement for a specific term, such term will not be governed by the meaning of retrenchment.
Retrenchment means discharge of surplus labour or staff in a continuing industry. It means the removal of “the deed
weight of uneconomic surplus.” It is not necessary that removal of surplus must only be when the establishment
runs in losses. It may operate at any level of profits. If the termination of service is by way of disciplinary action as a
punishment, then it is not retrenchment.
The legislature has used the expression ‘for any reason whatsoever’ which means, “that the employer may take
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action of retrenchment for any reason.” It does not matter why you are discharging the surplus if the other
requirements of the definition are fulfilled, then it is retrenchment.” It has been held by the Supreme Court that every
termination would amount to retrenchment.
Settlement [Section 2(P)]
“Settlement” means a settlement arrived at in the course of conciliation proceeding and includes a written
agreement between the employer and 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 authorised in this behalf by the appropriate Government and the conciliation
officer;
The definition of settlement may be divided into two parts:—
(i) It is settlement arrived at in the course of conciliation proceeding. The conciliation proceeding under the
Act may be held by a conciliation officer or Board of Conciliation.
(ii) it includes a written agreement between the employer and workmen arrived at otherwise than in the course
of conciliation proceeding.
It is necessary that the agreement should be signed by the parties in the prescribed manner. It is also necessary
that a copy should be filed with an officer authorised for this purpose by the appropriate Government and the
conciliation officer. A solution of the problem which is acceptable to a majority of the workers should be taken to be
just and fair. The Tribunal should not interfere in the matter on the basis of a subjective or opposition of a minority of
workers.
The Supreme Court has held that there is no bar in having conciliation proceedings on a holiday and to arrive at a
settlement. A holiday atmosphere would be rather more conducive because of relaxed feelings.
Strike [Section 2(Q)]
“Strike” means cessation of work. It may be resorted to:
(i) by a body of persons employed in any industry acting in combination; or
(ii) a concerted refusal; or
(iii) a refusal under a common understanding of any number of persons who are or have been employed to
continue to work or to accept employment.
Ingredients
The following are the ingredients of an industrial strike:

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(i) Existence of a set of employees and employer maintaining their employment relationships during the
period of strikes or lock outs.
(ii) The existence of a dispute (between the strikers and the stricken usually but not always, eg., in sympathy
strikes or jurisdictional strikes) the settlement of which becomes the object, cause or motive of a strike or a
lock out.
(iii) Cessation of work by the employees for achieving the object or cause or propelled by the motive stated
above.
Cessation of Work
Strike is the most effective weapon in the hands of labour in its struggle with capital for securing economic justice.
The basic strength of a strike lies in the labour’s priviledge to quit work and thus bring a forced re-adjustment of
conditions of employment. Cessation of work is the most significant characteristic of the concept of strike and it is
often described as ‘abandonment’; ‘stoppage’; ‘omission of performance of duties of their posts’, ‘hampering or
deducing normal work’, ‘hindrance of the working’, ‘suspension of work’, ‘discontinuing the employment’, etc.
The cessation of work may take any form and it may be of any duration of time but it must be temporary and not
forever. If the cessation is as a result of renunciation of work or relinquishment of the strikers’ status or relationship,
it is not strike.
The cessation must be of work and it may be nominal for a few minutes only or it may be even inside the very
establishment as is in sit down and stay in strikes or even on their seats. Mere passing of a resolution of a strike by
a properly constituted union cannot be a strike. Similarly, a mere apprehension or threat of a strike is not a strike
because if falls short of actual cessation of work.
Refusal to Accept an Engagement
A study of the relevant judgments indicates that the fair view would be to proceed with the motion of employment as
a state of things rather than a contract, and where the work done thereunder is continuous and the contractual
engagement merely a habitual and off-repeated incident therein, then the refusal to accept a particular engagement
legally constitutes a strike.
Partial Refusal to Work
A partial refusal to work constitutes a strike. Doing half of the allotted work only in concert would also amount to a
strike.
Refusal to Work Overtime
Whether refusal to work overtime constitutes a strike or not would depend upon whether overtime work “was
habitually worked in that industry.” However, the case would be different where the legal obligation is cast upon the
employees to do overtime work although such obligations usually are not imposed by awards.
Notices and Strikes
Mass resignations may still be strike if other essentials of a strike exist. Any combination which would otherwise be
a strike does not cease to be so merely because the men give notice of termination of their individual contracts of
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service by whatever length of notice is required by law. The effect of giving notices may be that the strikers are not
liable for breach of contract.
Objects of Strikes
The following are the usual objects of strike
(i) achievement of some economic gains,
(ii) defence of mutual interests, or
(iii) promotion of union objectives.
Form of Strike
A strike may be implied from attending circumstances. The simultaneous stoppage of work is a clear indication that
the strikers must have resolved to do so. Refusal to do work which is not the usual work or normal work but which is
assigned to by a change not agreed upon by the workers, would be a strike.
Stay-in-strikes, tools-down strike, etc., in which the workers, though physically present, virtually withhold their
labour, are as much strikes as where the workers are physically absent;
Classes of Strikes
Strikes can be variously classified. When classified from the measure and degree of withdrawal of services of work
by the workmen, strikes may take the following forms:
(i) Where services are withdrawn totally but on particular times: Alternate days’ strikes, Sunday strikes, etc.
(ii) Where services are withdrawn partially for, e.g. slow-down, bumper strikes, sectional strikes, slow-gear
strikes, token strikes, sit-down strikes, pen down strikes, tool-down strikes etc.
(iii) Where strikers remain on jobs but adopt irritative methods, for, e.g., irritation strikes, pearl strikes, etc.
When classified from union point of view, there occur following types of strikes:
(i) offensive strikes: Where unions initiate strikes for satisfaction of their demands,
(ii) defensive: Where unions strike to resist some changes or innovations or industrial matters initiated by the
management.
(iii) official: Strikes for which the unions officially resolve.
(iv) unofficial: Where workers strike without union’s vote.

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Jurists have classified strikes as lawful, unlawful, justified or unjustified strikes.
When classified from the point of view of the industries affected, they may be classified as public utility strikes and
strikes in non public utility services.
Strikes may be individual as well as collective ones.
When classified from the objective standards the strikes are of two types:
(i) economic strikes—which are launched for satisfaction of economic demands by the workmen, or
(ii) political strikes—which are organised for registering protests against the policies of ruling parties or
demonstrating power behind some opinions and policies, or
(iii) individual strikes—which are carried on by individuals for achieving their goals.
From the coverage point of view, strikes may be classified as general strikes or particular strikes.
Section 22 of the I D Act deals with prohibition of strikes and lock-outs, which is discussed later in this chapter.
Trade Union [Section 2(QQ)]
A trade union, for the purposes of this Act, has been given the same meaning as is applicable to it under the Trade
Unions Act, 1926. The definition occurs under s. 2(h) of that Act. The essence of the definition is that it symbolises
a combination. It may be temporary or permanent. But it should be formed for the purpose of regulating relations
between workmen and employers or mutual relations between workmen or employers. It may also be formed for the
purpose of imposing restrictive conditions on the conduct of any trade or business. It also includes any federation of
trade unions.
Tribunal [Section 2(R)]
Tribunal has been defined to include an industrial tribunal constituted under s. 7A. [For notes see under that
section].
Unfair Labour Practices [Section 2(RA)]
The Fifth Schedule to the Act (added by the amendment of 1982 and enforced with effect from 21.8.1984) specifies
the recognised unfair labour practices.
Village Industries [Section 2(RB)]
Village industry has been given the same meaning as in clause (h) of s. 2 of the Khadi and Village Industries
Commission Act, 1956 (61 of 1956).
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Wages [Section 2(RR)]
The term “wages” means any remuneration which is capable of being expressed in terms of money. It is payable
when the terms of employment, whether express or implied, are fulfilled. It includes the following:—
(i) dearness allowance and other allowances payable to the workman;
(ii) the value of facilities provided by the employer like house accommodation, supply of water, light, medical
attendance, concessional supply of foodgrains or other articles or any other amenity or service;
(iii) any travelling concession provided by the employer;
(iv) any commission which is payable on sales or business or both.
Wages do not include the following:—
(i) bonus.
(ii) contributions to pension or provident funds.
(iii) gratuity payable on termination of services. An ex gratia payment of Rs. 100 per month was not allowed to
be included for the purpose of computing wages.
Workmen or Employees [Section 2(S)]
Statutory Definition
Section 2(s) of the original Industrial Dispute Act, 1947 defined the word ‘workmen’ as follows:—
Workman means any person employed (including an apprentice) in any industry to do any skilled, manual or clerical
work for hire or reward and includes a workman discharged during an industrial dispute but does not include any
person employed in the naval, military or air service of the crown.
But after the amendment of 1956 the definition of ‘workmen’ was changed as a new clause was inserted by s. 3 of
the Industrial Disputes (Amendment and Miscellaneous Provisions) Act, 1956.
The break-up of the new definition is as follows:—
(i) “Workman” means any person including an apprentice,
(ii) employed in any industry to do any manual, unskilled, skilled, technical, operational, clerical or supervisory
work,
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(iii) for hire or reward,
(iv) the terms of employment may be express or implied, and
(v) in relation to any industrial dispute, it includes any such person who has been dismissed, discharged,
retrenched in connection with that dispute or as a consequence of that dispute, he has been dismissed,
discharged or retrenched. Alternatively, it also includes any such person whose dismissal, discharge or
retrenchment has led to that dispute.
(vi) But it does not include any such person—
(a) who is subject to the Air Force Act, 1950, or the Army Act, 1950, or the Navy Act, 1957; or
(b) who is employed in the police service or as an officer or other employee of a prison; or
(c) who is employed in a managerial or administrative capacity; or

(d) who is employed in a supervisory capacity and draws wages exceeding ten thousand rupees or more
per mensem or exercises functions mainly of a managerial nature which may be due to the nature of
duties attached to the office or by reason of powers vested in him.
Employee Employer Relationship
To determine the employee-employer relationship, i.e.; employment relationship various tests have been applied
from time to time. The more commonly known and accepted elements of an employment contract are
(i) Power of selection;
(ii) Remuneration;
(iii) Control of work; and
(iv) Power of discipline.
The relation of employee and employer exists between two persons where by agreement between them, express or
implied, the employee is under the control of the employer. With the progress of organisational techniques and
modern management methods, further liberal approach has now been adopted. If a person is part and parcel of
organisation, he may be an employee. Where no relationship of employer-employee was found to exist, demand of
persons engaged as ‘retainers’ for absorption was rejected. The burden to prove that a claimant was in the
employment of a particular management primarily lies on the person who claims to be so but the degree of proof
varies from case to case. It is neither feasible nor advisable to lay down an abstract rule to determine the employee-
employer relationship. It is essentially a question of fact to be determined by having regard to the cumulative effect
of the entire material placed before the adjudicatory forum by the claimant and the management.
Test of Control
An employee is paid to be under the control of an employer if he is bound to obey the order of the employer:
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(i) for the work which he shall execute,
(ii) as to the details of the work, and
(iii) the manner of its execution.
Nature of Control
It is not necessary that the control should be exercised continuously. It is the right or power to control that creates
the relationship. Power to control though terminable at any time nevertheless creates the relationship of a service at
will. The power to control should flow from the employment contract and not from the extraneous agencies. The
nature and extent of control which is necessary to establish the relationship must necessarily vary from business to
business and is by its nature incapable of precise definition. The fact that rules regarding hours of work etc.
applicable to other workmen may not be conveniently applied to them and the nature as well as the manner and
method of their work would be such as cannot be regulated by any directions given by the Industrial Tribunals, is no
deterrent against holding the persons to be workmen within the meaning of the definition if they fulfil its
requirements. It is a question of fact whether a person is under the control of another.
Test of Economic Control
The Supreme Court has laid the following test in the case of Hussainibhai v. Alah Factory The Zhilali Union,
Kozhikode —
“The true test may, with brevity, be indicated once again. 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. If he 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-contract is of consequence when, on lifting the veil or looking at the
conspectus of factors governing employment, we discern the naked truth, though draped is different, perfect paper
arrangement, that the real employer is the management, not the immediate contractors. Myrid devices, half hidden
in fold after fold of legal form depending on the degree of concealment needed, the type of industry, the local
conditions and the like may be resorted to when labour legislation casts welfare obligations on the real employer,
based on Arts. 38, 39, 42, 43 and 43-A of the Constitution. The Court must be astute to avoid the mischief and
achieve the purmaya of legal appearances.”
No Single Test is Decisive
The above mentioned factors are not conclusive in determining the employment relationship yet they are relevant
evidence to show existence or absence of control. The other factors which may be considered for determining the
relationship are :
(i) the nature of industry,
(ii) the activities of labourers,
(iii) the nature and quantum of control,
(iv) the terms of engagement,
(v) the method of remuneration,

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(vi) the power of controlling and dismissing workers,
(vii) the time at the disposal of the management, and
(viii) the degree of discretion to be exercised and left to the person to be exercised.
The Supreme Court observed in the case of Silver Jubilee Tailoring House v. Chief Inspector of Shops and
Establishment:
“During the last two decades the emphasis in the field has shifted and no longer rests so strongly upon the question
of control. Contract is obviously an important factor and in many cases it may still be the decisive factor. But it is
wrong to say that in every case it is decisive. It is now more than a factor, although an important one.”
Hire or Reward
Any reward or hire which is given for the work in question to create the relationship is sufficient. Hire or reward may
take any form. It may be remuneration on the basis of a rate per maund of salt prepared, or commission.
If a person is to be named as workman under sec. 2(5), the question whether he is on temporary or permanent
basis or on probation is irrelevant. The minimum employment period of two hundred and forty days is also not
relevant except only to claim benefit under sec. 25-F.
Once the test of employment for hire or reward for doing the specified type of work is satisfied, employee would fall
within the definition of “workmen.” Other criteria like source of employment, method of recruitment, terms and
conditions of employment, contract of service, quantum of wages or pay and mode of payment are not at all
relevant for deciding whether or not a person is workman.
Employees of Co-operatives
In the case of co-operatives, the employment relationship is not ruled out only because the paid employee is also a
member or shareholder.
Contractors and their Employees
A contractor is a person who has entered into a contract to execute a certain specific work. In modern industrial
activity, apart from servants and employees, considerable work is executed by contractors. The contractor is
subject to the orders of his employer only to the extent that the terms of his contract so provide and unlike a servant
a contractor is not under the control of his employe.
A person in respect of whom the contract of employment governed by section 2(k) and (s) has come to an end is
also a ‘workman.’ In respect of compensation payable to such workman a valid dispute can exist even after the
conclusion of the contract period.
Distinction between Contractor and Workman
It is a question of fact whether a person is a contractor or an employee. The Supreme Court has observed, “The
broad distinction between workman and independent contractor lies in this that while the former agrees himself to
work, the latter agrees to get other persons to work. Now a person who agrees himself to work and does so work
and is therefore a workman does not cease to be such by reason merely of the fact that he gets other persons to
work along with him and those persons are controlled and paid by him.”
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Independent Contractors
The following have been held to be independent contractors:
(i) The management entrusted the execution of work to a contractor who employed workers and paid them,
though the workmen of the contractor were given benefits under the Factories Act by the management.
(ii) The employer obtained tobacco in his name and stored it in his godowns. He entered into agreements with
persons to the effect that materials for manufacture of bidis would be supplied by him and that the bidis
would be prepared by the other parties on their own responsibility. It was held that there was no
responsibility of master and servant between the employer and the workman employed by the contractors.
When an Employee of a Contractor becomes Employee of Undertaking
The following conditions must be satisfied before an employee of a contractor could be regarded as employee of
the owner of the undertaking:
(i) He must be employed by the contractor to do any work for him;
(ii) Such employment must be in the execution of a contract by the contractor with the owner of the
undertaking, and
(iii) The contract with the owner of the undertaking must be for the execution by or under the contractor of the
whole or any part of the work which is ordinarily a part of the undertaking.
Employees in Canteens run by the Contractors
Where the mills give a licence to the contractor or society to run the canteen and the society or contractor kept all
the profits earned by the canteen to itself, the employees of contractor or society could not be held to be employees
of the mills.
Where no master and servant relationship exists between the employees of the canteen and the management of
the company, the question of seeking parity with the pay scales of employees of the company does not arise. It was
held by the Supreme Court that simply because the canteen workers were discharging same duties as those of the
employees of the VIP House or the Tea Club, that would not serve the purpose of upholding the claim of equal pay
scales when the canteen in question was run and managed by welfare committee and not by the company.
Where employees in the Karnataka Government Secretariat Departmental canteen sought regularisation of their
service and parity of pay with other employees of the Government, it was observed by the Supreme Court that the
State had no intention to run the canteen as a department and it had no statutory compulsion to run any canteen by
its employees. Even in the case where the employer was required to run a canteen under a statute, the law did not
appear settled. Regarding the remedy of regularisation granted in the judgment under appeal, the Supreme Court
observed the State was obligated to make appointments only in fulfilment of its constitutional obligation under
Articles 14 to 16 of the Constitution of India, 1950 and as per the rules framed under proviso to Article 309 thereof.
The High Court or for that matter any authority howsoever, high, had no jurisdiction to frame or direct framing of a
scheme for regularisation of services of ad hoc employees or daily wage employees who had not been appointed in
Page 42 of 44
accordance with service rules under a statute or under the proviso to Article 309 of the Constitution of India, 1950.
The Supreme Court held that the claim the employees that at least for the period they had worked they were
entitled to pay of Government employees could not be entertained as they did not hold any post sanctioned by the
State.
Employees Appointed by Treasurers of a Bank were Employees of the Bank
It has been held that “if the treasurers, relation to the bank was that of servants to a master, simply because the
servants were authorised to appoint and dismiss the ministerial staff of the cash department, this would not make
the employees in the cash department independent of the bank. In that situation the ultimate employer would be the
bank through the agency of the treasurers. It is not always correct to say that persons appointed and liable to be
dismissed by an independent contractor can in no circumstances be the employees of the third party.”
Basic and primary duties determine whether a person is a workman or not. If a workman is asked to do incidentally
or casually any supervisory or managerial duties or is given a covenanted cadre or called officer, he is a workman.
Part-time Employee-Whether Workman
The definition of workman does not make any distinction between a full-time employee and a part-time employee. In
the case of Yashwant Singh Yadav v. State of Rajasthan it was held that the definition of workman does not lay
down that only a person employed full time will be taken to be a workman and that one who is only a part-time
employee should not be taken to be a workman. What is required is that the person should be employed for hire to
discharge the work manual, skilled or unskilled etc. in an industry. When this test is fulfilled, a part-time employee
will also be held to be a workman.
Other Types of Worker
Temporary workmen, casual workmen paid weekly, an employee filling post of a supervisory character but receiving
a salary below Rs. 500/-p.m., a firebrigade superintendent doing the work of a fireman and a clerk, a jamadar, a
guard, a salesman, persons employed in sales promotion and technical service, a depot-keeper whose duties were
to see the packing and dispatch of goods, sweepers, scavengers, a time-keepers, gardeners working outside the
factory at the residence of the company’s officers but were paid salaries by the factory and whose names were
registered in the company, gardeners attached to the quarters of the officers of the mill but paid by the mill and
were subject to the discipline of the mill, head clerks accounts, head cashiers, cameramen, transport engineer, an
accountant made a branch manager out of exigencies, a group leader would be covered within the meaning of the
“workman” in the Act. Where the substantial part of the work assigned to consisted of looking after the security of
factory but he was also signing identity cards, issuing stores, recommending leave, promotions etc., it was held that
the work was not of managerial or administrative nature but only that of a security inspector, hence “workman”
under sec. 2(8) of the Act.
Work-charged employees constitute a distinct class and they cannot be equated with any other category or class of
employees much less regular employees. Work-charged employees are not entitled to service benefits which are
admissible to regular employees under relevant rules or policy framed by the employer.
Artists.—Certain persons were acting as artists in an organisation working as a trust for promotion of art and
preservation of artistic talent. They were held to be not workmen. The activities of the organisation did not involve
production of any goods or rendering of services and their activity was not for business. Their activities involved
mere expression of creative talent. Other works were merely ancillary to the main work of promotion of art.
Supervisory Personnel
Under section 2(s) the word ‘supervisory’ means supervision by one person of work of another person. It is not used
in the sense of supervisory of an automatic machine or checking. Supervision contemplates direction and control.
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The primary duties performed by the person employed in supervisory capacity need to be ascertained in order to
bring him in exclusionary clause of section 2(s). Undue importance should not be given to the designation of the
employee.
Whether an ‘apprentice’ is a workman or an employee is a question which can be determined only in conjunction
with the Apprentice Act, 1961. An apprentice appointed under the Apprentice Act, 1961 would not become an
employee for the purpose of sec 2(s) of the Industrial Disputes Act, 1947. Having enrolled as an apprentice on a
stipend basis, the apprentice cannot even during the course of his training say that he became a regular employee
merely because he was put in charge of some work. There would be no master and servant relationship between
the apprentice and the employer. Where the service of a person appointed as Apprentice Development Officer was
terminated, it was held that termination was not open to challenge as the person had not proved that he is a
‘workman’ and as ‘apprentice’ under section 18 of the Apprentice Act is different from workman as defined in other
labour laws.
Predominant Nature of Function
The Supreme Court has observed that designation alone is not decisive. One has to examine the nature of the
employees’ duties, powers and functions. Predominant nature of the service would seem to be the proper test. It
was held that an inspector in the Bombay Iron & Steel Labour Board was not a workman. The court added that the
functions of a Government character or incidental thereto could not be regarded as industrial in nature so as to
bring the persons discharging such functions within the meaning of “workman.” The question whether a person is
workman or not depends on nature of duties, principal duty in particular assigned to him and not necessarily on
designation. Therefore, the refusal of the State Government to refer dispute for adjudication merely on the ground
of designation of concerned employee was held erroneous by the Supreme Court. When promotion of workmen
puts them in the executive cadre, it takes them out of settlement which they made when they were workmen.
Dismissed or Discharged or Retrenched Employees
The earlier judicial controversy whether a dismissed or discharged or retrenched employee is covered by the
definition of ‘workman’ or not has now been removed by making a specific provision in the definition of workman.
Now such persons are included in the definition of workman.
Sales Representatives and Development Staff
The earlier view was that sales representatives were not workmen or employees but now they are considered as
workmen or employees. The Sales Promotion Employees (Conditions of Service) Act, 1976 extended to
pharmaceutical industry deems them as workmen. The development staff including development inspectors,
officers are now also governed by Sales Promotion Act and are given protection as of workman. The development
officers and inspectors in insurance industry have been held to be the workman.
Person Appointed on Ad Hoc/Daily Wages
Where a person is employed on an ad hoc basis or on daily wage basis, such person cannot claim regularisation of
his employment as ‘a rule of thumb’ merely on the basis of certain years of service. It is for the employer to decide
on regularisation of service of such employee.
A practicing lawyer retained by a company as an advisor is not a workman within the meaning of section 2(8) as no
master and servant relationship exists.
Where since creation of UP Jal Nigam, irrespective of source of recruitment, the employees of the Nigam were
treated alike for the purpose of superannuation and were allowed to superannuate at the age of 58 as per the
Regulation 31 of the UP Jal Nigam (Retirement on Age of Superannuation) Rules, 2005. It was held by the
Supreme Court that the High Court was right that solely on the basis of source of recruitment no discrimination can
Page 44 of 44
be made and differential treatment would not be possible in the matter of condition of service including the age of
superannuation.
Canteen Employees
A company set up a canteen in its factory. The running of the canteen was handed over to a contractor. It was held
that the canteen would be deemed to be run by the factory itself and as such employees in the canteen were
workmen of the company.
The employees of a canteen set up in discharge of the statutory mandates namely S. 46 of the Factories Act, 1948
do not necessarily become employees of the establishment. It will depend upon factors like this as to how the
obligation to set up a canteen was discharged by the management, i.e., whether by direct recruitment or by
employment of contractor. It was held on the facts that the finding of the Labour Court that the canteen workers
were not employees of the establishment could not be termed perverse.
Commission Agents and Deposit Collectors
Commission agents and deposit collectors of Banks, although not regularly employed, were held nonetheless to be
covered by the definition.
Medical Officers
Medical doctors discharging functions of medical officers are not workmen. They are entrusted with task of
examining and diagnosing patients and prescribing medicines. They are basically and mainly engaged in
professional and intellectual activities to treat patients. It was held that persons performing such functions cannot be
seen as workmen under s. 2(s).
End of Document
Conditions of Service for Change of which Notice is Requisite
Laws > PART I THE INDUSTRIAL DISPUTES ACT, 1947 > Notice of Change (Sections 9A & 9B)
Learning Objectives
his workmen;
CHAPTER 2 Notice of Change (Sections 9A & 9B)
CONDITIONS OF SERVICE FOR CHANGE OF WHICH NOTICE IS REQUISITE— Updated On 08-01-2019
Section 9A of the Industrial Disputes Act, 1947 contains provisions about notice of change. It says that for making
any change in conditions of service about matters enumerated in the Fourth Schedule, a notice has to be given by
the employer. The matters given in the Fourth Schedule are as follows:—
1. Wages including the period and mode of payment;

Page 2 of 3
2. Contribution paid or payable, by the employer to any Provident Fund or Pension Fund or for the benefit of
the workmen under any law for the time being in force;
3. Compensatory and other allowances;
4. Hours of work and rest intervals;
5. Leave with wages and holidays;
6. Starting, alteration or discontinuance of shift working otherwise than in accordance with standing orders;
7. Classification by grades;
8. Withdrawal of any customary concession or priviledge or change in usage;
9. Introduction of new rules of discipline, or alteration of existing rules, except in so far as they are provided in
standing orders;
10. Rationalisation, standardisation or improvement of plant or technique which is likely to lead to retrenchment
of workmen;
11. Any increases or reduction (other than casual) in the number of persons employed or to be employed in
any occupation or process or department or shift, not occasioned by circumstances over which the
employer has no control.
An employer who proposes to effect any change in the abovestated condition of service has to fulfill two essential
conditions which are as follows:—
1. He has to give notice to the workman likely to be affected by the change in the prescribed manner of the
nature of change proposed to be effected.
2. After giving the notice the employer has to wait for twenty one days before effecting the notified change.
However, for effecting the following changes, no notice is required to be given:—
(a) Where the change is effected in pursuance of any settlement or award.

(b) Where the workmen likely to be affected by the change are persons to whom anyone of the following
Rules, Regulations or Code apply:—
(i) The Fundamental and Supplementary Rules;
(ii) Civil Services (Classification, Control and Appeal) Rules;
(iii) Civil Service (Temporary Service Rules);
(iv) Revised Leave Rules;
(v) Civil Service Regulations;

Page 3 of 3
(vi) Civilians in Defence Services (Classification, Control and Appeal) Rules;
(vii) The Indian Railway Establishment Code; or

(viii) Any other Rules or Regulations that may be notified in this behalf by the appropriate Government in the
Official Gazette.
A corporation took over State run Electricity Board adopting rules and regulations framed by the State. As per the
earlier Government circular of erstwhile State Electricity Board, a workman who was acquitted from the criminal
charges was entitled to reinstatement and pay. It was held that earlier circulars of the erstwhile State Electricity
Board will be applicable to present case also and the concerned workman will be entitled to full back wages for
period of dismissal and suspension allowance during the period of suspension.1
1 Jaipur Vidyut Vitran Nigam Ltd. v. Nathu Ram, (2010) 1 SCC 428 [LNIND 2009 SC 2020].
End of Document
Power of Government to Exempt [Section 9B]
Learning Objectives
his workmen;
POWER OF GOVERNMENT TO EXEMPT [SECTION 9B]— Updated On 08-01-2019
The appropriate Government has the power to exempt any class of industrial establishment or any class of
workmen employed in any industrial establishment from the applicability of the provisions of section 9A. The
provisions may not apply either completely or apply subject to certain conditions which may be specified in the
notification. The ground for exemption is the opinion of the appropriate Government. Where it is of the opinion that
the application of these provisions affects the employers so prejudicially that such application may cause serious
repercussion on the industry concerned and that public interest so requires, it may exempt any industrial
establishment or class of workmen from application of these provisions.
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Power of Government to Exempt [Section 9B]
End of Document
Legality of Change
Learning Objectives
his workmen;
LEGALITY OF CHANGE— Updated On 08-01-2019
Provisions of section 9A are mandatory. Where notice of change is necessary but has not been served, it will
render the change illegal. It has been held that liberal construction should be given to section 9A so as to include all
worthwhile changes. For example, change of date for Diwali holiday, fixation of working hours, change of place of
business, settlement arrived at in the course of conciliation proceeding have been held to be legal changes
whereas unilateral withdrawal of compensation allowance,2 change of weekly rest days from Sunday to some other
day3 etc. have been held to be illegal changes.
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Legality of Change
2 I.O. Corpn. v. Workmen, 1975 II LLJ 319 SC.
3 TISCO v. Workmen, 1971 II LLJ 259 (SC) : AIR 1972 SC 1917 [LNIND 1972 SC 300]: 1972 LIC 1128.
End of Document
Requirement of Notice
Learning Objectives
his workmen;
REQUIREMENT OF NOTICE— Updated On 08-01-2019
The requirement of notice arises only if workmen are likely to be affected prejudicially. The section is not intended
to cover a case in which the proposal is, for instance, to enhance pay scales or to make the terms of employment
better by a unilateral decision. The whole object is to prevent a unilateral action for changing the conditions of
service to the prejudice of the workmen. Section 9A also has no application where an option is given to employees
to accept the change or to continue on the existing system.4 Terms and conditions of employment applicable at the
commencement of employment cannot be examined under this section. Section is mandatory.5
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Requirement of Notice
Withdrawal of Benefits
Withdrawal of overtime allowance without issuing notice has been held to be illegal. Where medical benefits were
available as a part of service conditions, withdrawal of such benefits on the ground that the workmen in question
were enjoying the benefit of ESI Scheme was held to be impermissible.
The sine qua non for the applicability of s. 9A read with 4th Schedule is that there should be a change in the service
conditions in respect of matters specified in the Schedule. The mere withdrawal of a privilege will not amount to a
change in service conditions unless such privilege having been allowed to be enjoyed by the employees over a long
stretch of time as a matter of custom or usage has an effect become an accepted conditions of service. The State
Bank of India imposed certain conditions for any staff member to participate in any local body or Municipal
elections. This was held to be something different from concessions or privileges set out in Sch. 4 relating to
conditions of service or work. Participation in elections is not a customary privilege connected with conditions of
service or work.
Accordingly, the circular of the State Bank did not bring about any change in conditions of service of the award staff.
A change of the date of a holiday is not a deprivation because the number of holidays is not reduced. Taking work
for less than 8 hours during construction period and subsequent enlargement to full working hours has been held to
be not a change. A mere change of promotion is not a condition of service.
Duty Relief
Duty relief is not a part of the conditions of service or work. Section 9A will have no application.
Beneficial Changes
No notice was considered necessary when weekly hours of work were reduced from 66 to 54. Such a change is not
covered by items No. 4, 6, or 8 of Sch. IV.
4 Tamil Nadu Electric Workers Federation v. Madras State Electricity Board, (1962) 2 Lab LJ 136 (Mad). The section
has been held to apply to minority educational institutions protected under Article 30(1) of the Constitution, Hospital
Employees Union v. Christian Medical College, (1987) 4 SCC 691 [LNIND 1987 SC 997].
5 Navbharat v. Shramik Sangh, (1985) 1 Lab LJ 474.
End of Document
Prejudicial Changes
Learning Objectives
his workmen;
PREJUDICIAL CHANGES— Updated On 08-01-2019

Modernisation, etc.
A prior notice of change in respect of item No. 10 of Sch. IV would be necessary where installation or introduction of
rationalisation, standardisation, or improvement of plant or technique is likely to lead to retrenchment of workmen.
Rationalisation and standardisation effected by a transport corporation resulted in conductor surplus. Some
conductors were, therefore, retrenched. The court said that this attracted s. 9A and, therefore, notice was
necessary. The number of conductors was reduced and it amounted to a change in the conditions of service as
Page 2 of 2
Prejudicial Changes
enumerated in item II of the 4th Schedule. It was necessary to give notice and wait for 21 days before dealing with
the staff surplusage.
A notice of change in cases of rationalisation or modernisation is necessary only when the same is likely to lead to
retrenchment. Emphasis is not on rationalisation, etc., but on its effect upon employment of workers. Explaining the
meaning of the word ‘likely’, the court said that it is a word of general usage and common understanding. ‘Likely’
means to make something possible and having better chances of existing or occurring than not, where, in a given
case the employer, on a proper appreciation of the situation, not only forms an opinion that there is no likelihood of
the proposed rationalisation leading to retrenchment but also assures the workmen categorically that no
retrenchment in any event shall be effected, it would be difficult to hold that it is likely to lead to retrenchment.
Overtime
Where workers working for more than the prescribed working hours were entitled to overtime payment, it was held
that any alteration of working hours in such a way that the workers would suffer loss of overtime benefit was a
prejudicial change.
Cancellation of the direct system of wages payment and introduction of a contractor for the purposes of payment of
wages was held to be an alteration of the mode of payment to the disadvantage of employees and, being violative
of s. 9A, was illegal and wholly ineffective. Conversion of casual workers into contract labour workers without
complying with the requirements of the section was held to be void.
Termination, Retrenchment
Employment of contract labour does not affect the service conditions of any workmen. Termination of services in
accordance with the law does not attract the provisions of s. 9A. Similarly, the exercise of retrenchment has to
follow its own procedure and, therefore, notice under s. 9A is not necessary. Retrenchment does not amount to any
change in the conditions of employment. Where a voluntary retirement scheme contemplated reduction of staff but
was not made public, it was held that prima facie such a scheme would attract Item Nos. 9, 10 and 11 of the IV
Schedule and s. 9A would become applicable. Employees of non-statutory unrecognised canteen are not
employees of principal employer.
Promotional Avenue
A notice of change is required only when a change is made in the conditions of service relating to matters specified
in 4th Schedule. The section has been held to have no application to the closing of the cadre of superintendents.
Clause 11 was not attracted. What was changed was merely the channel of promotion.
End of Document
Other Changes
Learning Objectives
his workmen;
OTHER CHANGES— Updated On 08-01-2019
The requirement of notice has been held to be limited only to the eleven conditions of service mentioned in Sch. IV
and does not extend to other changes. The conditions of service not mentioned in the schedule can be brought
within the scheduled items by the process of interpretation.27
27 Harmohinder Singh v. Kharga Canteen, Ambala Cantt., (2001) 5 SCC 540.

Page 2 of 2
Other Changes
End of Document
Writ Remedy
Learning Objectives
his workmen;
WRIT REMEDY— Updated On 08-01-2019
Management and workers entered into a settlement under which the management agreed to pay a fixed amount
every month in lieu of bonus to such workers who were outside the purview of the Payment of Bonus Act, 1965.
Subsequently, the union terminated the agreement. The management did not make any further payments after the
expiry of the period of settlement. This action on the part of the management was held to be violative of the
provisions of s. 9A. A petition for writ of mandamus was held to be maintainable against a private employer also in
such a case.28
Page 2 of 2
Writ Remedy
28 Mettur Chemicals Podhu Thoztilalar Sangam v. Chemplast Sanmar Ltd., Mettur, (1997) 2 Lab LJ 963 (Mad).
End of Document
Works Committee [Section 3]
Laws > PART I THE INDUSTRIAL DISPUTES ACT, 1947 > Authorities under the Act
Learning Objectives
his workmen;
CHAPTER 3 Authorities under the Act
The Industrial Disputes Act is an Act to make provision for investigation and settlement of disputes. Different modes
for settlement of disputes provided by the Act can be broadly categorised into three, i.e., conciliation, adjudication
and arbitration. Works Committee, Conciliation Officers and Board of Conciliation are the authorities which settle
disputes through conciliation. Labour Court, Tribunal and National Tribunal are adjudicatory authorities which settle
disputes through adjudication. The Act also has a provision for voluntary reference of disputes to arbitration. A court
of inquiry can also be constituted for inquiring into any matter appearing to be connected with or relevant to an
industrial dispute.
The Industrial Disputes Act, 1947 provides for the following authorities:
Page 2 of 4
1. Works Committee (section 3)
2. Grievance Settlement Authority (section 9C)
3. Conciliation Officers (section 4)
4. Boards of Conciliation (section 5)
5. Courts of Inquiry (section 6)

6. Adjudication Machinery viz.
(a) Labour Courts (section 7)
(b) Industrial Tribunals (section 7A)

(c) National Tribunals (section 7B)
7. Arbitrational Machinery (section 10A)
WORKS COMMITTEE [SECTION 3]— Updated On 08-01-2019
Section 3 provides for the composition of the Works Committee. The power to constitute works committee rests with
the appropriate Government. It may by a general or special order applicable to industrial establishments in which
100 or more workmen are employed or were employed on any day in the proceeding 12 months require them to
constitute a Works Committee.
The manner of constituting the Works Committee has to be provided by the appropriate Government. The
membership has to consist of representatives of employers and employees in equal numbers but representatives of
employees can be in greater number. The representatives of workers have to be chosen in the prescribed manner
from among the workers of the establishment in consultation with their registered trade union, if any, the total
number has not to exceed 20.1 The offices of the secretary and joint secretary are not to be held by the
representatives of one or the other for more than two consecutive years.2
Rule 42 of the Central Rules provides that where a trade union has membership of more than 50% of the
employees, then there is no need for any division of constituencies and election should be held by general vote of
workers in the industry. The decision of the commandant of the respondent depot to hold elections on the basis of
multiple constituencies was in violation of Rule 42.3
The member of representatives of workmen should be equal or more than that of employer. They should be
elected, and not nominated.4
Function of Works Committee
It is the duty of the Works Committee to promote measures for securing and preserving amity and good relations
between the employer and workmen. It has to comment upon matters of their common interest or concern and
endeavour to compose any material difference of opinion in respect of such matters.
Page 3 of 4
The Works Committees are concerned with the day-to-day working of the concerns and to settle the grievances of
the employees.
In our country many difficulties have been experienced in the smooth functioning of works committees. Following
are some of them:
(i) Lack of appreciation on the part of the management and workmen’s representatives of the functions and
significance of the committees;
(ii) Illiteracy and lack of understanding amongst the workers especially those employed in backward areas;
(iii) disinclination or workers’ representatives in the works committees to participate in the deliberations of the
committees;
(iv) too much expectation by the workers from these representatives and they being unable to deliver the
goods become unpopular and are not inclined to serve on the committees;
(v) lack of co-operation and in some cases even opposition of the trade union leaders to the constitution and
functioning of the works committees. They fear that their representative character will cease if work
committees function. There have also been instances in which it was reported that the trade unions
regarded works committees as their rivals;
(vi) opposition of trade unions towards the formation of works committees due to inter-union rivalry.
Following factors have been found helpful for the successful functioning of the works committees:
(a) existence of co-operation and cordial relations between the workers and managements and also with the
trade unions;
(b) sympathetic attitude by the managements especially in encouraging workers to put forward their
grievances and suggestions;
(c) foresight of the managements in having prior consultation with the works committees before bringing any
changes in respect of welfare measures, service and conditions etc;
(d) higher educational standards amongst the workers;
(e) model constitution and bye-laws for the works committees must be framed.
1 Rule 39, Industrial Dispute (Central) Rules, 1957. If the trade union is not consulted, whether required by Rules or not,
the election is liable to be set aside, Prafulla Mohan Das v. Steel Authority of India, (1992) 1 Lab LJ 621 (Ori) (Rule 41).
2 Rule 51, ibid.

Page 4 of 4
3 Delhi Ammunition Depot Workers Union v. Union of India, (1994) 2 Lab LJ 342 (Bom—DB); Union of India v. MTSSD
Workers’ Union, (1998) 1 SCC 640 [LNIND 1997 SC 1651] F.
4 Rules 38 to 43 of the Central Rules. Bangali Raje v. Union of India, (1994) 1 Lab LJ 1017 (Cal—DB).
End of Document
Grievances Settlement Authority [Section 9C]
Learning Objectives
his workmen;
industrial dispute.
Page 2 of 3


GRIEVANCES SETTLEMENT AUTHORITY [SECTION 9C]— Updated On 08-01-2019
Section 9C deals with the setting up of Grievance Settlement Authorities and reference of certain industrial disputes
to such authorities.
According to section 9C,6 every establishment employing twenty or more workers will have to constitute one or
more Grievance Redressal Committee for the resolution of disputes arising out of individual grievances.
The Committee will consist of equal number of members from the employer and the workmen subject to maximum
of six members in total. In case the Committee has two members, one of them should be a woman, as far as
practicable and where it has more than two members, the number of women members may be increased
proportionately. However, the chairperson of the Committee shall be selected from the employer and from workmen
alternatively on rotation basis every year.
The setting of Grievance Settlement Committee will not affect the right of the workman to raise industrial dispute on
the same matter under the provisions of the Act.
The Committee may complete its proceedings within thirty days of the receipt of written application by or on behalf
of the aggrieved person. The workman aggrieved by the decision of the Committee may prefer an appeal to
employer and the employer within one month from the date of receipt of the appeal dispose of the same and inform
his decision to the workman concerned.
This section will not apply to the workmen for whom there is an established Grievance Redressal Machinery in the
establishment concerned.
Where the grievance committee held that the employee even after removal from service is deemed to be still in
Page 3 of 3
service on the ground that a contract of personal service is subsisting and directed for reinstatement of the
employee, it was held to be inappropriate direction by the Supreme Court on the basis of 7established grounds of
reinstatement.
6 Substituted by Industrial Disputes (Amendment) Act, 2010.
7 APD Jain Pathshala v. Shivaji Bhagwat More, (2011) 13 SCC 99 [LNIND 2011 SC 590].
End of Document
Conciliation [Sections 4 & 5]
Learning Objectives
his workmen;
industrial dispute.
Page 2 of 3


CONCILIATION [SECTIONS 4 & 5]— Updated On 08-01-2019
Conciliation is the oldest recognised process of settling mutual conflicts not only between individuals and groups but
also between nations.
In the words of Alfred Stenger, “conciliation implies a compromise—a basically voluntary process the success of
which depends upon the citizen’s willingness to relinquish certain individual liberties as part of his duty to and
respect for his fellow men and to accept the other party as equal partner in conciliation proceedings.”
Conciliation through statutory government machinery quite clearly signifies the abandonment of the doctrine of
laissez faire in the industrial relations field in favour of government control in the interests of the welfare of all
citizens.8
Governmental or Public Conciliation
Following are the principles underlying conciliation
(i) the community at large has a rightful interest in the settlement of industrial disputes;
(ii) absolute compulsion cannot be used as a means of settling industrial disputes; it must be the last resort;
(iii) Government conciliation has to take place before a strike or lock out occurs, though the recommendation
of the conciliation Authority may not be accepted;
(iv) no strike or lockout should be allowed during the period for which a collective agreement is concluded;
Page 3 of 3
(v) the time needed for conciliation is “cooling off” period and during such period there should not be any strike
or lockout;
(vi) the publication of the conciliation report exposes both parties to the dispute to the pressure of public
opinion.
Essence of Conciliation
The essence of conciliation procedure is the exertion or channalising of pressures on one or both the parties to the
dispute to obtain the necessary concessions for the settlement of their differences. It is the method of persuasion
and the art of using pressures, some of which are intrinsic in labour disputes and some of which are created by the
mediator. These pressures may be personal, social, political or economic. It is the function of mediation (conciliation
included) to exert, channel or control these pressures in different forms.
Conciliation consists of two authorities: Conciliation Officers and Board of Conciliation.
8 It is the duty of the parties to see that during the pendency of the conciliation proceeding the conditions of service in
regard to any matter connected with the dispute should not be altered to the prejudice of workmen, Gujarat Petroleum
Employees Union v. Oil & Natural Gas Commission Ltd., (1998) 3 Lab LJ (Supp) 145 (Guj).
End of Document
Conciliation Officers [Section 4]
Learning Objectives
his workmen;
industrial dispute.
Page 2 of 2
Conciliation Officers [Section 4]


CONCILIATION OFFICERS [SECTION 4]— Updated On 08-01-2019
The appropriate Government has the power to appoint such number of persons as it thinks fit to be conciliation
officers by notification in the Official Gazette. The appropriate Government can charge them with the duty of
mediating in and promoting the settlement of industrial disputes.
A conciliation officer may be appointed for a specified area or for specified industries in a specified area or for one
or more specified industries and either permanently or for a limited period.
End of Document
Conciliation and Reference
Learning Objectives
his workmen;
industrial dispute.
Page 2 of 2
Conciliation and Reference


CONCILIATION AND REFERENCE— Updated On 08-01-2019
Section 10 of the Industrial Disputes Act, 1947 deals with reference of disputes for adjudication, etc., whereas
section 12 deals with the duties of the conciliation officers and both sections are independent of each other. It is not
necessary that before reference of a dispute to adjudication, conciliation procedure must be complied with.
End of Document
Duties of Conciliation Officers [Section 12]
Learning Objectives
his workmen;
industrial dispute.
Page 2 of 6


DUTIES OF CONCILIATION OFFICERS [SECTION 12]— Updated On 08-01-2019
Section 12 lays down the following duties of conciliation officers:
(1) Where any industrial dispute is existing or is apprehended in the future, the conciliation officer may hold
conciliation proceedings in the prescribed manner. Where the dispute relates to a public utility service and
a notice under section 22 has been given, he has to hold conciliation proceedings in the prescribed
manner.
(2) The conciliation officer has to investigate the dispute and all matters affecting the merits and rights for the
purpose of bringing about settlement of the dispute without delay. He may do all such things as he thinks
necessary for the purpose of inducing the parties to come to a fair and amicable settlement of the dispute.
(3) The whole of the dispute anyone matter of the dispute may be settled in the conciliation proceedings. In
both the cases the conciliation officer has to send a report of it to the appropriate Government or an officer
authorised by the appropriate Government together with a memorandum of settlement signed by the
parties to the dispute.9 A memorandum of understanding entered into by and between the management
and the employees having regard to the provisions contained in s. 12(3) is binding on both the employer
and the employee. In case any of such parties commit breach of any of its provisions, an industrial dispute
has to be raised.10
(4) Even if no such settlement is arrived at in the conciliation proceedings, the conciliation officer has to send a
report as soon as practicable after the close of the investigation. He has to send to the appropriate
Government a full report setting forth the steps taken by him for ascertaining the facts and circumstances
relating to the dispute and for bringing about a settlement. The report should be submitted 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.
Page 3 of 6
(5) If, on a consideration of the report, the appropriate Government is satisfied that there is a case for
reference of the dispute to a Board, Labour Court, Tribunal or National Tribunal, it may make such
reference. Where the appropriate Government does not make such reference it has to record and
communicate to the parties concerned its reasons.
(6) A report under this section has to be submitted within fourteen days of the commencement of a conciliation
proceeding or within such shorter period as may be fixed by the appropriate Government. If the conciliation
officer approves, the time for the submission of the report may be extended by such period as may be
agreed upon in writing by all the parties to the dispute.
It is obligatory on the conciliation officer to hold conciliation proceedings in public utility services where an industrial
dispute exists or is apprehended or where notice of strike lock-out has been given under section 22. In non-public
utility services where notice of strike or lock out is not given it is optional and he may hold conciliation proceedings.
Rule 10 of the Industrial Disputes (Central) Rules, 1957 says that conciliation proceedings are deemed to have
started on the date on which the notice of strike or lock-out under s. 22 is received by the conciliation officer. After
receipt of a notice of a strike or lock-out, the conciliation officer must forthwith arrange to interview both the
employer and the workmen concerned at such places and at such times as he deems fit. In cases where it is in the
discretion of the conciliation officer to hold conciliation proceedings, the proceedings commence on the date stated
in the formal notification given by him to the parties.
Where the Government refuses to make a reference on irrelevant grounds, the court can direct it to perform its
statutory duty.11 A writ of mandamus can be issued for the purpose.12 The court can direct the Government to
reconsider the matter on germane grounds and not to dispose it of on irrelevant, extraneous or non-germane
grounds.13 The Government can go into the prima facie merits of the case for the purpose of deciding whether to
make a reference or not. The High Court cannot sit in appeal over the decision of the Government in refusing to
make a reference.14 A writ of mandamus would, however, lie where it is shown to the court that the decision is not
of a bona fide nature.15 Where the dispute affected a group of mills, reference should be of the whole group. A mill
or two should not be left out just only because some kind of a settlement is prevailing there.16
There is no legal obligation on the part of the conciliation officer to issue notice to the unions before certification of
settlement. There is no provision in the Act which makes it obligatory for a conciliation officer to issue notice to any
party before a settlement is signed under s. 12(3) of the Act between the management and the workmen. So far as
individual workmen are concerned, it is not necessary that each individual workman should know the implications of
a settlement which is being negotiated by a recognised union. This is because industrial jurisprudence is based on
collective bargaining and in the matter of collective bargaining, the workmen as individuals do not come into the
picture at all.17
The conciliation proceedings should be conducted expeditiously and a discretion has been vested in the officer to
conduct in the manner as he deems fit.18 The party representing the workmen of a public utility service or a non-
public utility service is required to forward a statement of its demand along with a copy of the notice prescribed.19
According to Rule 12 of the Industrial Disputes (Central) Rules, 1957, the rule framed under section 38 provide that
the conciliation proceedings should be conducted expeditiously and a discretion is vested in the officer to conduct
those in such a manner as he deems fit. The party representing the workmen of a public utility service or a non-
public utility service is required to forward a statement of its demands along with a copy of the notice prescribed
under Rule 71 to the conciliation officer concerned.
Duties of Conciliator are Administrative
“The duty of a conciliation officer is not judicial but administrative. He has to investigate the dispute and do all such
things as he thinks fit for the purpose of inducing the parties to arrive at a fair and amicable settlement of the disput.
The main task of the conciliation officer is to go from one camp to the other and to find out the greatest common
Page 4 of 6
measure of agreement. That being so, the grievance that the investigations have not been carried on in the manner
that a judicial proceeding should be carried on is without substance.”
Failure of Conciliation and Duties of Officers
On failure of conciliation, the officer tries to ascertain and secure agreement of the parties for reference to voluntary
arbitration.
If he fails to get the parties to agree to arbitration, the conciliation officer attempts to persuade them to agree to
refer the dispute to adjudication by sending in a joint or separate application for such a reference under Section
10(2) of the Act. Reference to adjudication is made if the Government is satisfied that persons applying for
reference represent the majority. There is an administrative instruction that in cases where both parties agree to
refer a dispute for adjudication, the report of the conciliation proceedings should be accompanied by a joint
application under section 10(2) of the Act specifying the addresses of the parties and including a certification from
the Conciliation Officer or Regional Labour Commissioner, as the case may be, that the union which is concerned
represents a majority of the workmen in the establishment in question.
The failure report is required to be submitted within two days. It is factual in nature and its contents include history
of the dispute and circumstances leading to the dispute, efforts made to resolve it, arguments of the disputant
parties, and an indication whether there have been any breaches of the Code of Discipline. In 1959 the Ministry
instructed that the copies of the report should be supplied as a matter of course to the parties.
Powers of Conciliation Officers
Conciliation proceedings are conducted in private. The officer is empowered to enter the premises after giving
reasonable notice to the parties and inspect the same or any work, machinery, appliances or articles or to
interrogate any person in respect of anything situated there or any matter relevant to the subject matter of the
conciliation. He can call for and inspect any documents which he has grounds for considering to be relevant to the
dispute or necessary for the purpose of verifying the implementation of any award. In this connection he enjoys
many powers that are vested in a Civil Court under the Code of Civil Procedure. The conciliation officer must keep
certain matters confidential.
A conciliation officer cannot decide on the merits of the case. If there are any laches and lapses on the part of
employees or employer, it is the function of the Government to keep such factors in mind in finalising its policy over
the matter. Where the dismissal, etc., of a workman which is a deemed industrial dispute under s. 2A comes before
a conciliation officer, he has to deal with it in the manner of an industrial dispute and to submit a positive or a failure
report. There is no time-limit prescribed under section 2A or section 12. The matter in this case did not seem to be
state or grossly belated. It was held that the conciliation officer had failed to exercise the jurisdiction vested in him
under the law.
The Labour Commissioner could prevent a conciliation officer from exercising his powers under the Act just only
because the employer was a Government company.
Dismissal by a bank official of his personal driver was held to be not an industrial dispute to enable the labour
commissioner to make a reference for conciliation.
Conclusion of Conciliation Proceedings
A conciliation proceeding is deemed to have concluded under the following circumstances:

Page 5 of 6
(a) where a settlement is arrived at, when a memorandum of the settlement is signed by the parties to the
dispute;
(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) when a reference is made to a Court, Labour Court, Tribunal or National Tribunal during the pendency of
conciliation proceedings.
Proceedings before an arbitrator or before a Labour Court, Tribunal or National Tribunal are 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 are deemed to have been concluded on the date on which the award becomes enforceable under
section 17A.
A conciliation proceeding, in which a settlement is arrived at, is concluded when a memorandum of a settlement is
signed by the parties to the dispute. In cases of no settlement, it is concluded when the report of the conciliation
officer is received by the Government or when a reference is made to a Labour Court, Tribunal or National Tribunal
during the pendency of conciliation proceedings.
The Supreme Court held in a case that conciliation proceedings resulting in a report come to a conclusion only on
the actual receipt of the report by the appropriate Government. The conciliation officer cannot direct the parties to
act in a particular manner nor give a final decision in the matter.
Report by Conciliation Officer
According to section 12, the report must be submitted within 14 days of the commencement of conciliation
proceedings or within such shorter period as may be fixed by the appropriate Government. The timing for the
submission may be extended by such period as may be agreed upon in writing by all parties to the dispute.
9 See National Engg. Works v. State of Rajasthan, AIR 2000 SC 469 [LNIND 1999 SC 1079]: (2000) 1 SCC 371 [LNIND
1999 SC 1079], a settlement arrived at in conciliation proceedings is in the nature of a package deal. It need not
specifically mention the demands left out. The left out demands cannot constitute the subject-matter of a reference.
There is a presumption that such a settlement is reasonable and fair. But a dispute that on facts that the settlement was
not bona fide or that the same was arrived at because of fraud, misrepresentation, concealment of facts or corruption or
other inducement, can be a subject-matter of a further industrial dispute, referable under S. 10. Clause relating to
pension confining benefit of lifelong pension to those retiring after certain date was held to be not unfair, settlement
reached in course of conciliation proceeding, being a product of collective bargaining, is entitled to due weight and
consideration, such settlement can be ignored only if it is exceptional, that is, either it is unj cest or mala fide, Workers’
Welfare Assn. v. I.T.C. Ltd., (2002) I LLJ 848 (SC).
10 SAIL v. Madusudan Das, (2008) 15 SCC 560 [LNIND 2008 SC 2075].
11 Sankari Cement Alai etc. Sangam v. Government of TN, (1983) 1 SCC 304 [LNIND 1981 SC 415].
12 State of Madras v. Swadesamitram Labour Union, 3 Fac JR 431 (Mad).
13 Ram Avtar Sharma v. State of Haryana, (1985) 3 SCC 189 [LNIND 1985 SC 122].
Page 6 of 6
14 Bombay Union of Journalists v. State of Bombay, (1964) 1 Lab LJ 351 [LNIND 1963 SC 305].
15 Hochitief Gammon v. State of Orissa, (1975) 2 SCC 649 [LNIND 1975 SC 322] : AIR 1975 SC 2226 [LNIND 1975 SC
322]: (1975) 2 LLJ 418 [LNIND 1975 SC 322].
16 T.N. Joint Action Council and Textile Trade Union v. Govt. of T.N., (1986) 4 SCC 128 [LNIND 1986 SC 264]. Refusal
by the Labour Commissioner to refer the matter of a Cooperative Bank employee on the ground that he was not a
workman was held to be wrong, the Supreme Court ordered reference, (1984) 2 Lab LJ 396 (SC). Failed conciliation,
the Labour Commissioner accepted the failure report, the Government referred the matter for adjudication, held justified
because irreconciliable dispute was there. Village Papers Mazdoor Sangh v. State of H.P., (1995) 2 Lab LJ 628 (SC).
17 Britania Biscuit Co. Ltd., Employees’ Union v. Asstt Labour Commissioner, (1983) 1 Lab LJ 181 (Mad). A settlement
as to bonus between management and workers, reference to Tribunal, held the latter could not impose a new solution
contrary to the provisions of the Act, (1987) 1 Lab LJ 53 (SC). A settlement between union and management is binding
on all workmen even if they are not members of the union. The appellants, in this case, received benefits under the
settlement, they became bound by that reason. Ram Pukar Singh v. Heavy Engg. Corpn., (1995) 1 Lab LJ 214 (SC).
18 Rule 12, Industrial Disputes (Central) Rules, 1957.
19 Rule 71, industrial Disputes (Central) Rules, 1957.
End of Document
Board of Conciliation [Section 5]
Learning Objectives
his workmen;
industrial dispute.
Page 2 of 3


BOARD OF CONCILIATION [SECTION 5]— Updated On 08-01-2019
The appropriate Government has been given the power to constitute a Board of Conciliation. Whenever the
occasion arises, it may constitute such a Board by notification in the Official Gazette. The Board of Conciliation is
constituted for promoting the settlement of an industrial dispute.
The Board consists of a Chairman and two or four other members, as the appropriate Government thinks fit. The
Chairman shall be an independent person and the other members shall be persons appointed in equal numbers to
represent the parties to the dispute. The person appointed to represent a party shall be appointed on the
recommendation of that party. If any party fails to make a representation within the prescribed time, the appropriate
Government shall appoint such persons as it thinks fit to represent that party.
When a Board has prescribed quorum, it may act in the absence of the Chairman or any of its members or even in
any vacancy in its number. If the appropriate Government informs the Board that the services of the Chairman or of
any other member have ceased to be available, the Board shall not act until a new Chairman or member has been
appointed.
Duties of Board
Section 13 deals with the duties of the Board of Conciliation which are as follows:—
(i) Where a dispute has been referred to a Board under the Act, it shall be duty of the Board to endeavour to
bring about a settlement of the same. It shall be the duty of the Board to investigate the dispute and all
matters affecting the dispute and merits. It must bring the appropriate settlement of the dispute in such
manner as it thinks fit and without delay. It may do all the things that are necessary for the purpose of
inducing the parties to come to a fair and amicable settlement of the dispute.
Page 3 of 3
(ii) If a settlement of the dispute or a settlement of any matter related to the dispute has arrived at in the
course of conciliation proceedings, the Board has to send a report to the appropriate Government together
with the memorandum of settlement signed by the parties to the dispute.
(iii) Where any settlement is not arrived at, the Board has to send a full report to the appropriate Government
as soon as practicable after the close of the investigation. The report has to give a full report of the
proceedings and steps taken by it for ascertaining the facts and circumstances relating to the dispute and
for bringing about a settlement. It also has to give full statement of such facts and circumstances, its
findings and the reasons on account of which a settlement could not be arrived at in its opinion. It has to
give its recommendation for the determination of the dispute.
If on the receipt of such a report in relation to a public utility service, the appropriate Government does
not make a reference to a Labour Court, Tribunal or National Tribunal, it has to record its reasons and
communicate the same to the parties concerned.
(iv) The Board has to submit its report within two months of the date on which the dispute was referred to it or
within the shorter time fixed by the appropriate Government. The Government may from time to time
extend the time for the submission of the report by such further periods not exceeding two months in the
aggregate. The time for the submission of the report may also be extended by such period as may be
agreed upon in writing by all the parties to the dispute.
End of Document
Courts of Inquiry [Section 6]
Learning Objectives
his workmen;
industrial dispute.
Page 2 of 2
Courts of Inquiry [Section 6]


COURTS OF INQUIRY [SECTION 6]— Updated On 08-01-2019
The appropriate Government may constitute a Court of Inquiry for inquiring into any matter appearing to be
connected with or relevant to an industrial dispute by notification in the Official Gazette.
A Court of Inquiry may consist of one independent person or such number of independent persons as the
appropriate Government may think fit. Where a Court of Inquiry consists of two or more members, one of them shall
be appointed as a chairman.
A court having the prescribed quorum may act in the absence of the Chairman or any member or any vacancy in its
number but where the appropriate Government notifies the Court that the services of the Chairman have ceased to
be available, the Court shall not act until the chairman has been appointed. It is the duty of the court to inquire into
the matters referred to it and complete it within a period of six months from the commencement of its inquiry.
End of Document
THE INDUSTRIAL DISPUTES ACT, 1947
Learning Objectives
his workmen;
industrial dispute.
Page 2 of 4


ADJUDICATION MACHINERY
LABOUR COURTS [SECTION 7]— Updated On 08-01-2019

Constitution
The appropriate Government may constitute one or more Labour Courts for adjudication of industrial disputes
relating to any matter specified in the Second Schedule and for performing such other functions as may be
assigned to them under the Act, by notification in the Official Gazette. In the Second Schedule the following matters
are stated to be falling within the jurisdiction of Labour Court:
(a) Propriety or legality of an order passed by on employer under the standing orders.
(b) The application and interpretation of standing orders.
(c) Discharge or dismissal of workmen including reinstatement of, or grant of relief to, workmen wrongfully
dismissed.
(d) Withdrawal of any customary concession or priviledge.
(e) Illegality or otherwise of a strike or lock-out, and
(f) All matters other than those specified in the Third Schedule of the Act.
Civil Court will have no jurisdiction by implication to deal with industrial disputes when the special remedy provided
by the statute is the only remedy for the reliefs which can be granted by the Labour Courts.
The Board constituted under sections 3 and 11 of Working Journalists and Other Newspaper Employees
Page 3 of 4
(Conditions of Service) and Miscellaneous Provisions Act, 1955 is not a substitute for Labour Court. It is mainly for
considering working conditions of newspaper employees and fixing rates of wages for working journalists. It was
held that the award in dispute regarding retrenchment of newspaper employee given by Labour Court under
Industrial Disputes Act is not without jurisdiction.
Qualifications of Presiding Officers of Labour Courts
A Labour Court consist of one person only to be appointed by the appropriate Government. A person shall not be
qualified for appointment as the presiding officer of a Labour Court, unless:
(a) he is, or has been, a Judge of a High Court; or
(b) he has, for a period of not less than three years, been a District Judge or an Additional District Judge; or
(c) he has held any judicial office in India for not less than seven years; or
(d) he has been the presiding officer of a Labour Court constituted under any Provincial Act or State Act for not
less than five years; or
(e) he is or has been a Deputy Chief Labour Commissioner (Central) or Joint Commissioner of the State
Labour Department, having a degree in law and at least seven years’ experience in the labour department
including three years of experience as Conciliation Officer: Provided that no such Deputy Chief Labour
Commissioner or Joint labour Commissioner shall be appointed unless he resigns from the service of the
Central Government or State Government, before being appointed as the presiding officer; or
(f) he is an officer of Indian Legal Service in Grade III with three years’ experience in the grade.
The phrase ‘has held any judicial office’ indicates that the office is primarily judicial in nature. Where the question
was whether a magistrate holds a judicial office, it was held that although his duties are partly judicial and partly
others, but acting as a magistrate he is a judicial officer. The expression ‘holding a judicial office’ signifies more than
discharge of judicial functions while holding some other office.
Regarding the jurisdiction of the Labour Court the Supreme Court has observed, “If the termination of an industrial
employer’s services has been preceeded by a proper domestic enquiry which has been held in accordance with the
rules of natural justice and the conclusions reached at the said inquiry are not perverse, the tribunal is not entitled to
consider the propriety or the correctness of the said conclusions. If, on the other hand, in terminating the service of
the employee, the management has acted maliciously or vindictively or has been actuated by a desire to punish the
employee for his trade union activities, the tribunal will be entitled to give adequate protection to the employee 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 fide, then the tribunal cannot
interfere with the conclusions of the enquiry officer or with the orders passed by the management after accepting
the said conclusions.”
In a case, the respondent challenged his retrenchment from the post of reporter on the ground of non-compliance of
the Industrial Disputes Act, 1947. The Labour Court gave decision in his favour which was challenged in the High
Court but the High Court dismissed the appeal. The appellant preferred the appeal before the Supreme Court which
observed that the appellant’s contention that the respondent was a journalist and only the Board constituted under
the Working Journalists and other Newspaper Employees (Conditions of Service) and Miscellaneous Provisions
Act, 1955 had jurisdiction to decide his case and not the Labour Court has no grounds. The Board constituted under
the 1955 Act was not a substitute for Labour Court and it could decide only those cases which were referred to it.
Therefore, the appeal was dismissed.
Page 4 of 4
The Labour Court within whose local limits of jurisdiction the establishment is situated will have the jurisdiction to
decide any dispute relating to subsistence allowance.
Regarding powers of Labour Court and Industrial Tribunals, a question arose whether they become functus officio
after 30 days of publication of award and lose all powers to recall an ex parte award made on an application made
by the aggrieved party beyond that period. Conflicting views were presented by the Division Benches of the
Supreme Court. Therefore, the matter was referred to the larger Bench for determination. It was held by the
Supreme Court in a case that an award without notice will be a nullity. Therefore, application for setting aside an ex
parte award is not liable to be rejected on the ground that the labour court became functus officio, application not
having been made within 30 days of publication of award.
The enquiry conducted by Labour Commissioner is of summary nature. He cannot decide and factual matters like
validity of termination order or whether a person concerned is a workman or not.
End of Document
Learning Objectives
his workmen;
industrial dispute.
Page 2 of 4


INDUSTRIAL TRIBUNALS [SECTION 7A]— Updated On 08-01-2019

Constitution
The appropriate Government may, by notification in the Official Gazette, constitute one or more Industrial Tribunals
for the adjudication of industrial disputes and for performing such other functions as may be assigned to them under
the Act. The industrial disputes may be relating to any matter, whether specified in the Second Schedule or the
Third Schedule of the Act.
A Tribunal shall consist of one person only to be appointed by the appropriate Government.
Qualifications for Appointment to Industrial Tribunal
A person shall not be qualified for appointment as the presiding officer of a Tribunal, unless:
(a) he is, or has been, a Judge of a High Court; or
(b) he has, for a period of not less than three years, been a District Judge or an Additional District Judge.
(c) he is or has been a Deputy Chief Labour Commissioner (Central) or Joint Commissioner of the State
Labour Department, having a degree in law and at least seven years’ experience in the labour department
including three years of experience as Conciliation Officer: Provided that no such Deputy Chief Labour
Commissioner or Joint labour Commissioner shall be appointed unless he resigns from the service of the
Central Government or State Government, before being appointed as the presiding officer; or
(d) he is an officer of Indian Legal Service in Grade III with three years’ experience in the grade.
Page 3 of 4
Assessors
The appropriate Government may, if it so thinks fit, appoint two persons as assessors to advice the tribunal in the
proceeding before it.
Matters of Jurisdiction
The following matters are within the jurisdiction of Industrial Tribunal:
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. Rationalisation;
10. Retrenchment of workmen and closure of establishment; and
11. Any other matter that may be prescribed.
In a number of cases a question repeatedly arose that whether an objection to jurisdiction of a Tribunal could be
raised before the tribunal itself or is it necessary to apply to the High Court to quash the proceedings before the
Tribunal. Where the question of jurisdiction is clear from the admitted facts then there is no difficulty. The difficulty
will arise where the question of jurisdiction is a mixed question of law and fact. In such cases the question should
be raised before the Tribunal itself which will decide the question after considering the facts. If the Tribunal finds
that it has no jurisdiction the proceeding before it comes to an end but where it finds that it has jurisdiction, it may
proceed on to decide the dispute itself. Ordinarily the findings of the Industrial Tribunal regarding its jurisdiction are
not interfered with by the courts but where it is found that the Tribunal has misapplied any principle of law while
interpreting the facts, the courts may set aside the findings of the Tribunal.
The Industrial Tribunal has no jurisdiction to adjudicate upon any matter relating to salaries of employees who are
not workmen under the Industrial Disputes Act, or to inquire and decide whether the closure of the business was
done by the management itself or not.
Powers
The Tribunals are constituted when any industrial dispute arises and they function till the dispute is disposed of.
Tribunals can be constituted for deciding a specified number of disputes or for a limited period of time. Whenever in
any proceeding any prejudice is likely to be caused to any party, the newly appointed Tribunal may start hearing the
Page 4 of 4
case from the beginning. Either party to the dispute can convince the Tribunal that the prejudice will be caused if
the trial is not held de novo.
There are many powers which the Labour Court or Industrail Tribunal enjoy which a civil court does not have. For
example, the power to enforce contracts of personal service, to create contracts and to change contracts etc.
Where the services of a probationer are terminated before the expiry of the probationary period without assigning
any reasons, it was held that the Tribunal can investigate the validity of termination order. The Tribunal has to find
out whether the order of termination has been passed with ulterior motive and is not in bonafide exercise of the
power arising out of the contract.
It has been held that the Industrial Tribunal deciding upon wage scale of the employees of an industrial
establishment would have the discretion to grant ad hoc increase of salary as part of the revision of wages.
End of Document
Learning Objectives
his workmen;
industrial dispute.
Page 2 of 2


NATIONAL TRIBUNALS [SECTION 7B]— Updated On 08-01-2019

Constitution
The Central Government may constitute one or more National Industrial Tribunals for adjudication of industrial
disputes by notification in the Official Gazette. National Tribunals are constituted to adjudicate upon such 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.
A National Tribunal shall consist of one person only to be appointed by the Central Government.
Qualifications for Presiding Officer of National Tribunal
A person shall not be qualified for appointment as the presiding officer of a National Tribunal unless he is, or has
been, a judge of a High Court [section 7B(3)].
Assessors
The Central Government may, if it thinks fit, appoint two persons as assessors to advice the National Tribunal in the
End of Document
Learning Objectives
his workmen;
industrial dispute.
Page 2 of 2


DISQUALIFICATIONS FOR PRESIDING OFFICERS OF LABOUR COURTS, TRIBUNALS AND NATIONAL TRIBUNALS [SECTION
7C]— Updated On 08-01-2019
No person shall be appointed to, or continue in, the office of the presiding officer of a Labour Court, Tribunal or
National Tribunal, if—
(a) he is not an independent person; or
(b) he has attained the age of sixty-five years.
End of Document
Learning Objectives
his workmen;
industrial dispute.
Page 2 of 2


FILLING OF VACANCIES [SECTION 8]— Updated On 08-01-2019
If, for any reason a vacancy (other than a temporary absence) occurs in the office of the presiding officer of a
Labour Court or Tribunal or in the office of the Chairman or any other member of a Board or Court, then the
appropriate Government shall appoint another person in accordance with the provisions of this Act to fill the
vacancy. In case of such a vacancy in the office of the presiding officer of a National Tribunal, it will be filled by the
Central Government in the same manner. The proceedings may then be continued before the Labour Court,
Tribunal, National Tribunal, Board or Court, as the case may be, from the stage at which vacancy is filled.
End of Document
Learning Objectives
his workmen;
industrial dispute.
Page 2 of 3


FINALITY OF ORDERS CONSTITUTING BOARDS, ETC. [SECTION 9]— Updated On 08-01-2019
Any order of the appropriate Government or of the Central Government appointing any person as the Chairman,
any other member of a Board or Court or as the presiding officer of a Labour Court, Tribunal or National Tribunal
shall not be called in question in any manner. Any act or proceeding before any Board or Court shall not be called in
question in any manner on the ground merely because of—
(i) any vacancy in such Board or Court, or
(ii) defect in the constitution of such Board or Court.
The settlement arrived at in the course of conciliation proceeding have also been protected by this section. A
settlement arrived at in the course of a conciliation proceeding shall not be invalid only due to the fact that such
settlement was arrived at in a proceeding which continued beyond a period of 14 days or less as fixed by the
Government [under section 12(6)] or that the proceedings before a Board were continued beyond a period of two
months or less as fixed by the Government [under section 13(5)].
This section cannot cure the defect of want of jurisdiction. Where the Tribunal has not been duly constituted under
the Act and was acting without jurisdiction, it was held that such defect of want of jurisdiction cannot be cured under
this section.53
Where the report of any settlement arrived at in the course of conciliation proceeding before a Board is signed by
Page 3 of 3
the Chairman and all the other members of the Board, such settlement shall be invalid by reason only of the casual
or unforeseen absence of any of the members (including the Chairman) of the Board during any stage of the
proceeding.
53 Jaggannath Vinayak Kale v. M.I. Ahmedi, (1953) II LLJ 50.
End of Document
Learning Objectives
his workmen;
industrial dispute.
Page 2 of 2


RECONSTITUTION OF TRIBUNALS— Updated On 08-01-2019
In Bharat Bank of India Ltd. v. Their Employees, 54 the Supreme Court held that the reconstitution of the Tribunal
after the occurrence of a vacancy in the office of the Chairman or member is necessary under the Act.
54 2 FJR 1 (SC).
End of Document
Reference of Disputes to Boards, Courts or Tribunals [Section 10]
Laws > PART I THE INDUSTRIAL DISPUTES ACT, 1947 > Reference of Disputes to Boards,
Courts or Tribunals
Learning Objectives
his workmen;
CHAPTER 4 Reference of Disputes to Boards, Courts or Tribunals
REFERENCE OF DISPUTES TO BOARDS, COURTS OR TRIBUNALS [SECTION 10]— Updated On 08-01-2019
The provision under section 10 is an operative provision which provides for reference of an industrial dispute or any
matter relating to industrial dispute to authorities under the Act.1
Where the appropriate Government is of opinion that any industrial dispute exists or is apprehended, it may at any
time by order in writing—
Page 2 of 5
(a) refer the dispute to a Board for promoting a settlement; 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;2 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.3
Where the dispute relates to any matter specified in the Third Schedule and is not likely to affect more than one
hundred workmen, the appropriate Government may, if it so thinks fit, make the reference to a Labour Court.
The purpose of reference of dispute to Court or Tribunal is to keep industrial peace. The power to make reference
cannot be exercised at any time, after delay of seven years and there being no industrial dispute, existing or
apprehended.4 Delay in raising dispute should not be unreasonable. Delay of 14 years in seeking reference and in
challenging order of termination was found to be unreasonable.5
Where the dispute relates to a public utility service and notice under section 22 regarding strike or lock-out has
been given, the appropriate Government shall make a reference of the dispute not withstanding the fact that any
other proceedings in respect of the dispute may have commenced under this Act. It is not necessary to make the
reference where the appropriate Government considers that the notice has been frivolously or vexatiously given or
that it would be inexpedient so to do.
Where the dispute is in relation to a matter 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 constituted by the
State Government.
Some of the important points regarding reference are as follows:—
(i) This section comes into play when the Central Government is of the opinion that an industrial dispute
exists or is apprehended.
(ii) The dispute should involve a question of national importance or should be of such a nature that industrial
establishments situated in more than one state are likely to be interested or affected. The Government,
may therefore, feel that it should be decided by a National Tribunal.
(iii) The Central Government can make the reference even if it is not the appropriate Government.
(iv) Reference should be by order in writing.
(v) Reference may be of the whole dispute or of any matter appearing to be connected with the dispute or
relevant to it.
(vi) The dispute may relate to any matter specified in the Second or Third Schedules.
(vii) 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
Page 3 of 5
Government has to make the reference if it is satisfied that the persons applying represent the majority of
each party.
(viii) An order referring an industrial dispute to a Labour Court, Tribunal or National Tribunal should specify the
period within which the award on the dispute has to be submitted to the appropriate Government. Where
such industrial dispute is connected with an individual workman, the period is not to exceed three months.
(ix) The parties to an industrial dispute may apply in the prescribed manner, whether jointly or separately, to
the Labour Court, Tribunal or National Tribunal for extension of the period or for any other reason. If the
presiding officer of the Court, Tribunal or National Tribunal considers it necessary or expedient to extend
the period, he may extend the period by such further period as he may think fit. For such extension of
period he has to give reasons in writing.
(x) The period, for which, if the proceedings before the Labour Court, Tribunal or National Tribunal had been
stayed by an injunction or order of a Civil Court, shall be excluded in computing any period as abovestated.
(xi) Any proceedings before a Labour Court, Tribunal or National Tribunal shall not lapse merely on the ground
that any period specified (under sub-section 2A) had expired without such proceedings being completed.
(xii) Where an industrial dispute has been referred here, the appropriate Government may by order prohibit the
continuance of any strike or lock-out in connection with such dispute which may be in existence on the date
of the reference.
(xiii) If in an order referring an industrial dispute to a Labour Court, Tribunal or National Tribunal or in a
subsequent order, the appropriate Government has specified the points of adjudication, then it (Labour
Court, Tribunal or National Tribunal) has to confine its adjudication to those points and incidental matters.6
(xiv) Where a dispute concerning any establishment has been referred to or is to be referred to a Labour Court,
Tribunal or National Tribunal, the appropriate Government may include in that reference some other
establishment, group or class of establishments, if it is of the opinion that the dispute is of such a nature
that the—
(a) other establishment, group or class of establishment will be interested in, or

(b) affected by the dispute.
But the inclusion has to be done at the time of making the reference or at any time after that but before the
submission of the award.
This may be done whether or not at the time of such inclusion any dispute exists or is apprehended in that
establishment, group or class of establishments. The Government may form such an opinion on an application
made to it or even otherwise.
(xv) While answering the questions referred to it, a tribunal is under a duty to confine its enquiry to questions
referred and has no jurisdiction to travel beyond terms of reference.7
Limitation Act does not apply to reference made by appropriate Government to Labour Court or Industrial Tribunal
of adjudication of existing industrial dispute. Labour Court was held to have erred in holding reference as time-
barred without going into merits of the case, a workman cannot be denied relief only on the ground of delay in
raising industrial dispute8
A second reference which has been necessitated by a new subsequent event is not barred by res judicata.9
Page 4 of 5
In a case relating to proper exercise of power of reference under section 10, it was held by the Supreme Court that
failure report of conciliation proceedings is not a sufficient material evidence to decline reference. Refusal to order
in this case amounts to determination of existing dispute between the parties by the State Government in the
absence of relevant and material evidence on record.10
The Supreme Court in a decision relating to reference of dispute discussed about the manner in which reference
has to be made by the Government. The government is required to make fair statement of dispute without
prejudging issues from either perspective.11
1 Where permission was given in the Supreme Court’s order to approach ‘authority’ in accordance with law in case of
fresh dispute, it was held that ‘authority’ here meant authority under statute, namely, reference in terms of section 10
and not High Court, Rourkela Shramik Sangh v. Steel Authority of India Ltd., (2003) I LLJ 849 : AIR 2003 SC 1060
[LNIND 2003 SC 120]: (2003) 4 SCC 317 [LNIND 2003 SC 120]; It is bounden duty of Government to make reference
appropriately reflective of real nature of dispute between the parties, TISCO Ltd. v. State of Jharkhand, (2014) 1 SCC
536 [LNIND 2013 SC 822].
2 Where industrial dispute raised by employee was referred for adjudication but Panchayat did not disclose earlier facts
before Labour Court, the Labour Court awarded reinstatement with back wages, it was held that the reference made by
appropriate Government itself was incompetent, and therefore, not sustainable, Taluka Panchayat v. Ichchaben
Shivram Dave, (2002) IV LLJ (Suppl) 994 (SC); Respondent worked on daily wages for more than 240 days and
thereafter his services were discontinued, he pursued civil suit for 13 years to get relief and when ultimately matter was
referred to Labour Court on serving a demand notice, the Labour Court directed his reinstatement with back wages, writ
petition challenging this decision was dismissed and in appeal the Supreme Court set aside the direction for payment of
back wages and confirmed the direction for reinstatement, State ofpunjab v. Anil Kumar, (2007) II LLJ 815 : (2007) 9
SCC 663.Age of retirement should be determined upon a reference under s 10(1)(c ), Radhey Shyam Mishra v. Union
of India, (2010) 15 SCC 600.
3 Municipal Corporation of Delhi v. Female Workers (Muster Roll), AIR 2000 SC 1274 [LNIND 2000 SC 449]: (2000) 1
SCC 224 : 2000 Lab IC 1033, the corporation was ordered to provide maternity leave to muster rolled daily wages
female labourers. It was a matter of social justice and also that of human rights under the Universal Declaration of
Human Rights Act, 1948 and Convention on Elimination of all Forms of Discrimination against Women. Various
international covenants and treaties also postulate such benefits to women employees.
4 Nedungadi Bank Ltd. v. K.P. Madhavankutty, (2000) I LLJ 561 : AIR 2000 SC 455.
5 State ofkarnataka v. Ravi Kumar, (2009) 13 SCC 746 [LNINDORD 2009 SC 245]; UP SRTC v. Ram Singh, (2008) 17
SCC 627.
6 Respondent—Chowkidar on daily wages succeeded before the labour court in his challenge of termination of his
service. The High Court only affirmed the Labour Court’s award. The Supreme Court observed that the long delay of 9
years in raising the dispute as well as the jurisdictional fact about applicability of the I.D. Act to the appellant which
claimed to be not an ‘industry’ were not considered by the labour court, the matter was remitted back to labour court,
Director, Food & Supplies; Punjab v. Gurmit Singh, (2007) II LLJ 813 (SC).
7 Oshiar Prasad v. Sudamdih Coal Washery, (2015) 4 SCC 71 [LNIND 2015 SC 62].
8 Raghubir Singh v. Haryana Roadways, (2014) 10 SCC 301 [LNIND 2014 SC 782].
Page 5 of 5
9 Karnataka Power Transmission Corpn. v. Amalgamated Electricity Supply Co., AIR 2001 SC 291 [LNIND 2000 SC
394]: (2001) 1 SCC 586 [LNIND 2000 SC 394].
10 Ariane Orgachem (P.) Ltd. v. Wyeth Employees Union, (2015) 7 SCC 561 [LNIND 2015 SC 298], order of the Deputy
Labour Commissioner was held to be void ab initio.
11 TISCO Ltd. v. State of Jharkhand, (2014) 1 SCC 536 [LNIND 2013 SC 822].
End of Document
Effect of Reference to National Tribunal
Courts or Tribunals
Learning Objectives
his workmen;
EFFECT OF REFERENCE TO NATIONAL TRIBUNAL— Updated On 08-01-2019
Where any reference has been made to a National Tribunal [sub-section (1A)] then notwithstanding anything
contained in the Act, any Labour Court or Tribunal will not have jurisdiction to adjudicate upon any matter which is
under adjudication before the National Tribunal. Accordingly—
Page 2 of 2
Effect of Reference to National Tribunal
(a) if the matter under adjudication before the National Tribunal is pending in a proceeding before a Labour
Court or Tribunal, such proceeding relating to such matter, shall be deemed to have been quashed on
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 during the pendency of the proceeding there to any Labour Court or Tribunal for
adjudication.
‘Labour Court’ or ‘Tribunal’ here includes any Court or Tribunal or other authority constituted under any law relating
to investigation and settlement of industrial disputes in force in any State (Explanation).
Where any industrial dispute, in relation to which the Central Government is not the appropriate Government, is
referred to the National Tribunal, then notwithstanding anything contained in section 15, 17, 19, 33A, 33B and 36A
the appropriate Government in reference to such dispute will be the Central Government. But, save as otherwise
expressly provided, any reference in any other provision to the appropriate Government in relation to that dispute
shall mean a reference to the State Government.
Proceedings not to Lapse on Death
The proceedings pending before a Labour Court, Tribunal or National Tribunal in relation to an industrial dispute
shall not lapse merely by reason of the death of any of the parties to the dispute being a workman. The Labour
Court, Tribunal or National Tribunal shall complete the proceedings and submit its award to the appropriate
Government.
A reference by the Government in the question of termination of service also includes the aspect of abandonment of
service by the workman. But in a case, the facts did not show any such conduct on the part of the workman. The
court said that the Tribunal had approached the matter in a very technical way. Compensation was awarded to the
legal representatives of the workman who died during the pendency of the proceedings.
No Dispute Award
An industrial dispute could not be closed even by reason of death of a workman. It is obligatory on the Tribunal to
answer a reference made under section 10(1)(c) on merit after proper adjudication. It cannot pass a ‘no dispute
award’ on failure of workman to appear before it.
End of Document
Reference is an Administrative Act
Courts or Tribunals
Learning Objectives
his workmen;
REFERENCE IS AN ADMINISTRATIVE ACT— Updated On 08-01-2019
The power of the appropriate Government to refer the industrial dispute or declining to refer the dispute, is an
administrative power.14 There are no statutory principles laid down in the Industrial Disputes Act, 1947 for regulating
the Government’s discretion in the matter. Therefore, the disputes often arise about the propriety of exercise of this
discretion. State of Madras v. C.P. Sarathy, 15 is the most important case on this object. It was held by the Supreme
Court that the Government would not be justified in making a reference under section 10(1) without satisfying itself
on the facts and circumstances brought to its notice that an industrial dispute existed or was apprehended in
relation to an establishment or a definite group of the establishment engaged in a particular industry. The court said
Page 2 of 2
Reference is an Administrative Act
that it was also desirable that the Government should, wherever possible, indicate the nature of the dispute in the
order of reference. It must be remembered that in making a reference under section 10(1) the Government
performs an administrative act. The fact that it had to form an opinion as to the factual existence of an industrial
dispute as a preliminary step to the discharge of its function did not make it any the less administrative in character.
The court could not, 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. No doubt, it would be
open to a party seeking to impugn the resulting award to show that what was referred by the Government was not
an industrial dispute within the meaning of the Act, and that, therefore, the Tribunal had no jurisdiction to make the
award. But, if the dispute was an industrial dispute as defined in the Act, its factual existence and the expediency of
making of a reference in the circumstances of a particular case were matters entirely for the Government to decide
upon, and it would not be competent for the Court to hold the reference as bad and quash the proceedings for want
of jurisdiction merely because there was, no material before the Government on which it could have come to an
affirmative conclusion on those matters. The Government must have sufficient knowledge of the nature of the
dispute to be satisfied that it is an industrial dispute within the meaning of the Act, as, for instance, that it relates to
retrenchment or reinstatement. But beyond this no obligation could be held to lie on the Government to ascertain
particulars of the disputes before making a reference under section 10(1) or to specify them in the order.
The Supreme Court has again emphasised in Indian Tea Assn. v. Ajit Kumar Bros., 16 that an order of reference is
in its nature an administrative act. It involves no lis and is made on subjective satisfaction of the Government.
Unlike judicial or quasi-judicial orders, it cannot be examined by the High Court closely to see if there was any
material before the Government to support its conclusion.
The Industrial Tribunal is the creation of a statute. It gets jurisdiction on the basis of the reference. It cannot go into
the question of the validity of the reference. In this case during the pendency of a writ petition before a High Court
for directing the State Government to make a reference, the State Government made the reference without hearing
the management and without bringing it to the notice of the court, it was held that it was incumbent upon the State
Government to recall the reference and to give due consideration to the High Court directions.17
The court which is competent to examine the validity of a reference is the High Court and not the Industrial
Tribunal.18
14 Empire Industries Ltd. v. State of Maharashtra, (2010) 4 SCC 272 [LNIND 2010 SC 251].
15 1953 SC 53 : (1952-53) 4 FJR 431. It is open to High Court to examine whether relevant considerations in making
reference had been taken note of or not, finding of High Court that relevant considerations have not been taken note of
cannot be disputed, Moolchand Khairati Ram Hospital K. Union v. Labour Commissioner, (2000) II LLJ 1411 (SC).
Where service of a casual labour employed for a specific project was terminated on completion of the project, the Industrial
Tribunal held the termination bad for violation of section 25-F of the I.D. Act, 1947. The Supreme Court remitted the matter back
to the Tribunal as the effect of section 2(oo)(bb) of the I.D. Act was completely lost sight of by the Tribunal, Microwave Project,
Kota v. Ramesh Chand, 2007 III LLJ 350 (SC).
16 AIR 2000 SC 915 [LNIND 2000 SC 298]: (2000) 3 SCC 93 [LNIND 2000 SC 298] : 2000 Lab IC 706.
17 National Engg. Industries Ltd. v. State of Rajasthan, AIR 2000 SC 469 [LNIND 1999 SC 1079]: (2001) 1 SCC 371.
18 Ibid.
End of Document
Reference as a Remedy
Courts or Tribunals
Learning Objectives
his workmen;
REFERENCE AS A REMEDY— Updated On 08-01-2019
For the enforcement of a right or an obligation under the Industrial Disputes Act, this remedy provided uno flatu is
an exclusive remedy. It is an alternative to other rights or remedies under general or common law.19 In the latter
case, civil courts will have jurisdiction.
Right of employer to challenge reference is not affected by High Court’s direction to pass appropriate orders in case
of failure report by conciliation officer.20
Page 2 of 2
Reference as a Remedy
19 Premier Auto Mobiles Ltd. v. K.S. Wadke, 1975 II LLJ 447 SC.
20 Philips India Ltd. v. Philips Employees’ Union, (2006) I LLJ 741 (SC).
End of Document
General Reference and its Validity
Courts or Tribunals
Learning Objectives
his workmen;
GENERAL REFERENCE AND ITS VALIDITY— Updated On 08-01-2019
In Raju’s Cafe, Coimbatore v. Industrial Tribunal Coimbatore, 21 the Madras High Court held that general reference
will be totally incompetent and invalid if it is of an industrial dispute between the workers and the management of
hotels in the whole district without specifying either the hotels by name or the matters in respect of which the
dispute has arisen.
Page 2 of 2
General Reference and its Validity
21 1956 Mad 115 : 1956 I LLJ 498.
End of Document
Power to Amend, Modify, Vary or Withdraw Order of Reference
Courts or Tribunals
Learning Objectives
his workmen;
POWER TO AMEND, MODIFY, VARY OR WITHDRAW ORDER OF REFERENCE— Updated On 08-01-2019
The Supreme Court held in the Minerva Mills case22 that the power under s. 10(1) read with s. 7 of the Act includes
the power to modify the notification and withdraw an industrial dispute from the tribunal and refer it to another
tribunal. In Textile Worker’s Union, Amritsar v. State of Punjab, 23 it was held by the Punjab High Court relying on
the above decision that the power to make notification under section 10(1) includes the power to add to, amend,
vary or rescind any such notification.
Page 2 of 3
A new section, 33B, was added by the Amendment Act, 36 of 1956, which specifically provides for powers to the
Government to withdraw any proceeding under the Act before a Labour Court, Tribunal or a National Tribunal and
transfer the same to another Labour Court, Tribunal or National Tribunal.
The question referred was whether the demand of badli workman for regularisation of their services in permanent
employment of the company was justified and what relief they were entitled to. The Tribunal concluded that 92 out
of 100 workman were entitled to be regularised and to have all the benefit and status of regular employees. A
Division Bench of the High Court held that the Tribunal Committed error in enlarging the scope of the reference and
that too without notice to the employer. The Supreme Court upheld the decision of the High Court and directed the
Tribunal to consider the reference in accordance with the law.24
Where the question referred was such that it could not be decided without examining a question which was not
referred, for example, the reference about the validity of a retrenchment but it was due to closure which was not
referred. The retrenchment would have been justified if the closure was bona fide. It was held that the tribunal could
look into the fact whether retrenchment was due to closure and whether the same was bona fide. 25
A reference has to be decided on the basis of the real issue and not on the basis of the works used.26
Where the reference was as to the propriety of commission agents and deposit collectors of banks to pay scales,
allowances and other service conditions available to regular clerical employees, it was held that the tribunal could
not direct the employer to consider them for regular absorption.27
Where employees of Nationalised Insurance Company challenged categorisation and non-categorisation of workers
by raising industrial dispute and the industrial tribunal rejected the reference stating that it cannot declare action of
management as unjustified, it was held that the industrial tribunal should have applied General Insurance Company
Scheme for rationalisation of pay with reference to concerned workman and found out whether categorisation was
correct or not. The award of the industrial tribunal was set aside.28
22 1953 SC 505 : 1954 I LLJ 119.
23 1957 Pun. 255.
24 Gouri Shankar Chatterjee v. Taxmaco Ltd., (2001) 2 SCC 257 [LNIND 2000 SC 1891].
25 J.K. Synthetics v. Rajasthan Trade Union Kendra, (2001) 2 SCC 87 [LNIND 2000 SC 1855] : AIR 2001 SC 531
[LNIND 2000 SC 1855]: (2001) 1 LLJ 561 [LNIND 2000 SC 1855].
26 AP SRTC v. Presiding Officer, Industrial Tribunal, (2001) 2 SCC 695 [LNIND 2001 SC 284] : AIR 2001 SC 1007
[LNIND 2001 SC 284]. It was a case involving transfer of the establishment, settlement of the position of the employees
under the new employment was held to be a part of the reference.
27 Indian Banks Assn. v. Workmen of Syndicate Bank, AIR 2001 SC 946 [LNIND 2001 SC 405]: (2000) 3 SCC 36 :
(2001) 1 LLJ 1045 [LNIND 2001 SC 405].
Page 3 of 3
28 Workmen v. Oriental Fire & General Insurance Company Ltd., (2001) I LLJ 1326 : AIR 2001 SC 1492 [LNIND 2001
SC 712].
End of Document
Validity of Reference for Workmen Working in Another State
Courts or Tribunals
Learning Objectives
his workmen;
VALIDITY OF REFERENCE FOR WORKMEN WORKING IN ANOTHER STATE— Updated On 08-01-2019
The appropriate Government will be that Government in whose jurisdiction the employer has his registered office.
Where an employee was working outside the State and his services were terminated, it was held that the
appropriate Government will be the Government in whose jurisdiction the company had its registered office and not
that Government in whose jurisdiction the services were terminated. Whereas if a workman who is a party to the
industrial dispute is employed in a branch office and the cause of action arose within the State in which the branch
office is situated, the Government of the State would be the appropriate Government for making a reference.
Page 2 of 2
Validity of Reference for Workmen Working in Another State
Two Governments cannot be appropriate Governments within the meaning of section 10(1) when the reference
arises in respect of a workman of an employer having more than one office in several States.29
In Yoyan, India Cements Employees Union v. Mgt. of India Cements Ltd., 30 the services of 300 and odd workers
employed by contractors were terminated. Since they were not been paid the same wages and not allowed the
same working conditions allowed by the principal employer to its own workers, an industrial dispute was raised by
the union for making the contract labour permanent by removing the intermediary contractors. The Government of
Tamil Nadu referred this dispute for adjudication to the Labour Court, Madurai. The principal employer raised a
preliminary objection that reference by Tamil Nadu Government was bad since the appropriate Government in
relation to cement industry was the Central Government. The Labour Court upheld the preliminary objection and
terminated the proceedings. Hence the employees’ union filed a civil appeal by special leave. It was held by the
Supreme Court that in view of the notification dated December 8, 1977 of the Government of India issued under
section 3(a) of the Industrial Disputes Act, both the Central and State Governments are appropriate Governments
under the Act. That being so, the notification issued by Government of Tamil Nadu referring the dispute for
adjudication was a valid notification. The stand taken by the management was not tenable. The order of the Labour
Court therefore, was set aside.
29 Fact Employees Association v. Fact Ltd., (1994) III LLJ (Suppl) 736 (Ker).
30 (1994) I LLJ 920 : AIR 1994 SC 558 [LNIND 1993 SC 890]: (1994) 1 SCC 572 [LNIND 1993 SC 890].
End of Document
Exclusion of Civil Courts’ Jurisdiction
Courts or Tribunals
Learning Objectives
his workmen;
EXCLUSION OF CIVIL COURTS’ JURISDICTION— Updated On 08-01-2019
It is well settled position of law that the jurisdiction of the Civil Court to try a suit of a civil nature is taken to be there
unless statutorily it has been taken away either expressly or by necessary implication. If the provisions of the
Industrial Disputes Act are examined, it is clear that they impliedly exclude the jurisdiction of the Civil Court to try
industrial dispute which could be referred to for adjudication under s., 10(1) of the Act. The Industrial Disputes Act is
a self-contained code providing for settlement of Industrial Disputes by special forums. When such special forums
are provided in the Act itself for adjudication of disputes arising under the Act, the jurisdiction of the Civil Court to try
Industrial Disputes is impliedly taken away.31 Nature of right sought to be enforced decides whether jurisdiction of
Page 2 of 2
Exclusion of Civil Courts’ Jurisdiction
civil court is excluded or not. If there is allegation of infringement of Industrial Employment (Standing Orders) Act,
1946, it was held by the Supreme Court that civil court’s jurisdiction may be held to be barred but if the suit is based
on violation of principles of common law or constitutional provisions or other grounds, civil court’s jurisdiction may
not held to be barred. In the present case, respondent’s dismissal was in violation of natural justice principles
without affording him an opportunity of hearing and defence. Therefore, it was held that such a right can be
enforced only by industrial dispute and not in a civil suit.32
It was held that security guards of Thermal Power Station of State Electricity Board will be governed by Industrial
Employment (Standing Orders) Act, 1946 and relevant rules framed by State Electricity Board. In case of their
dismissal from the Board they can raise industrial dispute. Civil suit seeking for their reinstatement will not be
maintainable.33
31 P. Kulasekaran v. Union of India, Southern Railway. (1993) III LLJ (Suppl) 656 (Mad).
32 Rajasthan SRTC v. Deen Dayal Sharma, (2010) 6 SCC 697 [LNINDORD 2010 SC 167].
33 Bihar SEB v. Ram Deo Prasad Singh, (2011) 12 SCC 632 [LNIND 2011 SC 883].
End of Document
Power of Appropriate Government to Decline Reference
Courts or Tribunals
Learning Objectives
his workmen;
POWER OF APPROPRIATE GOVERNMENT TO DECLINE REFERENCE— Updated On 08-01-2019
Though the Government is entitled to form an opinion as to whether an Industrial Dispute “exists or is
apprehended,” the power of the Government under section 10 read with section 12 is administrative and not judicial
or guasi-judicial. In exercising the power the Government is required only to examine whether the industrial dispute
exists or is apprehended. For this purpose the Government can prima facie examine the matter to find out whether
a dispute exists or not. The Government can refuse to make a reference only if it finds that the dispute sought to be
raised is vexatious or that the dispute if referred to adjudication will have great adverse consequences on the entire
industry in the region. In the garb of prima facie examination of the issue of existence or apprehension of the
Page 2 of 2
Power of Appropriate Government to Decline Reference
dispute, the Government cannot delve into the merits of the dispute and make an adjudication. The Government
cannot usurp the jurisdiction of the Labour Court/Industrial Tribunal to adjudicate the dispute. The power of
reference is not the same thing as an adjudication of the dispute itself on merits. Appropriate Government cannot
adjudicate the dispute on merits. In Telco Convoy Drivers Mazdoor Sangh v. State of Bihar, 34 the question before
the court was whether the convoy drivers were workmen of TELCO and whether the master and servant
relationship existed between convoy drivers and TELCO. It was held that there is no doubt that the appropriate
Government was not justified in deciding the dispute. Where the dispute was whether the persons raising the
dispute were workmen or not, the same could not be decided by the appropriate Government in exercise of its
administrative function under section 10(1) of the Industrial Disputes Act. As has been held in M.P. Irrigation
Karamchari Sangh v. State of M. P., 35 there may be exceptional cases in which the State Government may, on
proper examination of the demand, come to a conclusion that demands were either perverse or frivolous and did
not merit a reference. The Government should be very slow to attempt an examination of the demand with a view to
declining reference and the courts will always be vigilant whenever the Government attempts to usurp the powers of
the Tribunal for adjudication of disputes. To allow the Government to do so would be to render section 10 and
section 12(5) of the Act nugatory.
Appropriate Government cannot decline a reference on irrelevant and extraneous grounds and cannot decide
disputed questions of law and fact.36 Where the workers claimed that they were direct employees and not contract
labour, but the Government refused to refer on the ground that their union failed to establish that there was
employer-employee relationship, it was held that the Government, instead of deciding on its own, ought to have
referred the dispute for adjudication.37 The Government should be slow to examine the merits of the demand
(dearness allowance in this case). It should not usurp the powers of the tribunal.38 The Government cannot
adjudicate dispute on merits. The question whether convoy drivers were workmen or not was an issue to be
referred for adjudication.39
34 (1989) II LLJ 558 : AIR 1989 SC 1565 [LNIND 1989 SC 268].
35 (1985) I LLJ 519. Refusal to make reference on the ground that the inquiry was proper and also in accordance with the
proper procedure, has been held to be not valid and proper, Workmen of Syndicate Bank v. Government of India,
(1985) 1 Lab LJ 93 : AIR 1985 SC 1667 [LNIND 1984 SC 301].
36 V. Veerarajan v. Govt. of T.N., (1987) II LLJ 209 : AIR 1987 SC 695 [LNIND 1987 SC 49]. In this case there was
refusal to provide employment to 7 out of 154 workmen found guilty of misconduct or wilful disobedience of lawful
orders. The Government refused to refer the dispute. Holding the Government’s refusal to be not justified, the Supreme
Court said that the employer was a defence manufacturer and supplier and that there was industrial unrest followed by
violence and stoppage of work were not germane and relevant for the purpose of deciding whether to refer the dispute
for adjudication. The fact that the concerned workmen had accepted their guilt was an irrelevant factor when the case
of the workers was that all of them had pleaded guilty. There was no justification for employer to discriminate between
the 7 and remaining 154 who were taken back.
37 Workmen v. Rohtas Industries Ltd., (1998) 3 Lab LJ (Suppl) 702 (SC). Where the contract labour arrangement is a
sham, the workers can seek reference against the principal employer but if the arrangement is genuine then only
against the contractor. Ashok Leyland Ltd. v. Govt. of T.N., (1991) 1 Lab LJ 113 (Mad), security guards working under
contractor could not be equated with those working under management.
38 M.P. Irrigation Karamchari Sangh v. State of M.P., (1985) 1 Lab LJ 519 (SC).
39 Mazdoor Sangh v. State of Bihar, (1989) 2 Lab LJ 558 (SC).
End of Document
Delay
Courts or Tribunals
Learning Objectives
his workmen;
DELAY— Updated On 08-01-2019
Legislature in its wisdom has not mentioned any limitation about raising of industrial disputes mere delay in raising
an industrial dispute does not disentitle a workman from raising the dispute.40 Where the plea of delay by the
workman in moving against dismissal was not raised before the Labour Court and the High Court recorded a finding
that the workman had not submitted any explanation for the delay which he should have done even if not pleaded
by the management. The finding was held by the Supreme Court to be not justified. Article 137 of the Schedule to
the Limitation Act is not applicable to proceedings under the ID Act.41
Page 2 of 2
Delay
Where an industrial dispute was raised after 13 long years of the termination of the service and no reasonable
explanation was given for the delay, it was held that the decision of the Industrial Tribunal to provide no relief was
proper.42
When after termination of services in 1992, the employee was diligently pursuing the matter before employer and
Government authorities and Government ultimately made reference in 1999, delay was held to be sufficiently
explained.43
40 Mani Ram v. Presiding Officer, Labour Court, (1997) 2 Lab LJ 519 (P&H).
41 Ajaib Singh v. Sirhind Coop Marketing-cum-Processing Service Society, (1999) 1 Lab LJ 1260 (SC).
42 Indian Iron & Steel Co. Ltd. v. Prahlad Singh, (2001) 1 SCC 424 [LNIND 2000 SC 1424] : AIR 2001 SC 69 [LNIND
2000 SC 1424]: (2001) Lab 1C 26.
43 Kuldeep Singh v. Central Design Development and Facilities Center, (2010) 14 SCC 176 [LNIND 2010 SC 1180].
End of Document
Dismissal for Offence Involving Moral Turpitude
Courts or Tribunals
Learning Objectives
his workmen;
DISMISSAL FOR OFFENCE INVOLVING MORAL TURPITUDE— Updated On 08-01-2019
A workman was dismissed on account of his conviction for an offence involving moral turpitude in outraging the
modesty of a woman. The Central Government decided against reference. A single judge of the High Court directed
the Central Government to make reference. It was held by the Supreme Court that the directive was not in
accordance with the law. The order of dismissal was rightly passed by the employer. Recommendation made in Pa-
wan Kumar v. State of Haryana, 44 did not cover cases involving moral turpitude.45
Page 2 of 2
Dismissal for Offence Involving Moral Turpitude
44 (1996) 4 Scale 480 [LNIND 1996 SC 2868] : AIR 1996 SC 3300 [LNIND 1996 SC 2868]: (1996) 4 SCC 17 [LNIND
1996 SC 2868] : (1996) 2 LLJ 703.
45 (1997) 1 Lab LJ 49 (SC).
End of Document
Duty of Tribunal to Confine itself to Issues Raised by Parties
Courts or Tribunals
Learning Objectives
his workmen;
DUTY OF TRIBUNAL TO CONFINE ITSELF TO ISSUES RAISED BY PARTIES— Updated On 08-01-2019
In industrial adjudication, issues are of two types, those referred by Government for adjudication and set out in the
order of reference and incidental issues which are sometimes the issues of law or mixed issues of law and fact. The
Tribunal may as well frame preliminary issues on the point on which the parties are at variance. This will help the
Tribunal to go to the root of matter. But the Tribunal cannot travel beyond the pleadings and arrogate to itself the
power to raise issues which the parties to the reference are precluded or prohibited from raising. If the employer
does not question the status of the workman, the Tribunal suo motu cannot 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
Page 2 of 2
Duty of Tribunal to Confine itself to Issues Raised by Parties
workman within the meaning of that expression in the Act and it is not obligatory upon the employer necessarily to
raise the contention that the concerned workman was not within the meaning of that expression under the Act.46
46 Workmen v. Hindustan Lever Ltd., (1984) I LLJ 388 : AIR 1984 SC 576.
End of Document
General Conclusions on Exercise of Power of Reference
Courts or Tribunals
Learning Objectives
his workmen;
GENERAL CONCLUSIONS ON EXERCISE OF POWER OF REFERENCE— Updated On 08-01-2019
Some general principles regulating governmental power of reference may be stated as under:
1. Factual existence of a dispute is a prerequisite.47

Page 2 of 2
General Conclusions on Exercise of Power of Reference
2. Discretion is vested in the Government to choose the authority to whom the industrial dispute be referred
when there are more than one authority to coordinate jurisdiction.
3. Reference is an executive and an administrative act and not a judicial or guasi-judicial act. Even after
refusal, the Government can make reference.
4. The Government can refuse to refer a dispute. Where it concerns a Government project or a department, it
should get the matter examined by a competent Tribunal rather than unilaterally decide on its own.
5. A reference can neither be withdrawn, nor cancelled or superseded.
6. Prior notice of reference to parties is not necessary.48
7. Power to amend or add to any reference lies with the Government.
8. It is within the competence of courts to test the validity of a reference and interfere with it if called for. It can
issue a mandamus for reconsideration but not for reference.
9. A reference which is otherwise valid would not become invalid on account of any errors or omissions in
naming the parties to the dispute or total number of workmen.
10. The Government has no power to decide on merits of reference.
11. The appropriate Government is precluded from considering the merits of the dispute while testing the
question whether or not the same is to be referred to the Tribunal, when the demand for reference is
neither perverse nor frivolous. Also, under sec. 12(5) of the Act, it is obligatory on the part of the
Government to give reasons while rejecting the request for reference of a dispute to the Tribunal.
47 Where the applicant did not joint the employment proposed to him, the reference of his matter under the category of
“removal from service was held to be vitiated. The Government had in the first instance refused reference but
subsequently revised its opinion, Bongaigaon Refinery & Pharmaceuticals Ltd. v. Samajuddin Ahmed, (2001) 2 Lab LJ
1149 : (2001) 9 SCC 557 [LNIND 2001 SC 1934]. Existence or apprehension of an industrial dispute for an order of
reference is necessary. National Engineering Industries Ltd. v. State of Rajasthan, (2000) 1 SCC 371 [LNIND 1999 SC
1079] : AIR 2000 SC 469 [LNIND 1999 SC 1079]. Cement Corporation of India Ltd. v. Raghbir Singh, AIR 2002 SC
809, date of birth, proper certificate produced two years after retirement, back wages allowed only from the date of
application before the labour court and not for the entire period, interest also not allowed.
48 The Government is not obliged to issue notice to the employer or hear him or his objections before making reference
after reconsidering its earlier decision not to make a reference, Sultan Singh v. State of Haryana, (1996) 1 Lab LJ 879 :
AIR 1996 SC 1007 [LNIND 1995 SC 1290].
End of Document
Right of Employer to Lead Evidence
Courts or Tribunals
Learning Objectives
his workmen;
RIGHT OF EMPLOYER TO LEAD EVIDENCE— Updated On 08-01-2019
The right of the employer to lead evidence in support of his action is not a statutory right. It is a part of the
procedure laid down by the Supreme Court.49 An employee was dismissed after a domestic enquiry. The labour
court held the domestic inquiry to be bad at this stage the employer sought permission to lead evidence to justify
the action. The Supreme Court found that there was a conflict of decisions. The tino-judge Bench referred the
matter to a five-judge Bench.50
Page 2 of 2
Right of Employer to Lead Evidence
Reference of Industrial Dispute: Who is Entitled to Raise Dispute
An industrial dispute can be raised by any person who can be categorised as workman under the Industrial
Disputes Act, 1947. Before referring any industrial dispute to reference, the appropriate Government has to find out
whether the concerned person can raise an industrial dispute or not. Appellant company recruited respondent under
benevolent scheme of employment to candidates whose land was acquired by appellant company. Before the
joining of the respondent, the company found out that two brothers of him were already given employment under
scheme, so his letter of appointment was withdrawn and joining report was also not accepted. The respondent
raised an industrial dispute and the Government refused to make reference on the ground that the respondent was
not a workman as he did not actually joined service. Later on the Government referred the matter to industrial
tribunal on orders of High Court. The appellant company challenged the order and the single judge quashed the
order of reference holding reference to be misconceived. Division Bench again reversed the order of single judge
and on appeal, the Supreme Court held that reference under S. 10 of Industrial Disputes Act was not valid as
respondent had not entered employment of appellant. The Supreme Court held the reference to be wholly
unwarranted and uncalled for and observed that court should not extend its helping hand to non-deserving claimant.
49 Karnataka SRTC v. Lakshmidevamma, AIR 2001 SC 2090 [LNIND 2001 SC 1128]: (2001) 5 SCC 433 : (2001) 2 LLJ
199 [LNIND 2001 SC 1128]. The conflict was in decisions between Shambhu Nath Goyal v. Bank of Baroda, (1983) 4
SCC 491 [LNIND 1983 SC 267] : AIR 1984 SC 289 [LNIND 1983 SC 267]: (1983) 2 LLJ 415 [LNIND 1983 SC 267] and
Rajendra Jha v. Presiding Officer, Labour Court, (1984) Supp SCC 520.
50 Ibid.
End of Document
Arbitrational Machinery or Voluntary Reference of Disputes to Arbitration
[Section 10(A)]
Courts or Tribunals
Learning Objectives
his workmen;
ARBITRATIONAL MACHINERY OR VOLUNTARY REFERENCE OF DISPUTES TO ARBITRATION [SECTION 10(A)]— Updated

On 08-01-2019
Section 10A provides that where any industrial dispute exists or is apprehended and the employer and the workmen
agree to refer the dispute to arbitration, they may, at any time before the dispute has been referred under section 10
to a Labour Court or Tribunal or National Tribunal, by a written agreement, refer the dispute to arbitration. The
Page 2 of 3
Arbitrational Machinery or Voluntary Reference of Disputes to Arbitration [Section 10(A)]
reference shall be to such person or persons including the presiding officer of a Labour Court or Tribunal or
National Tribunal as an arbitrator or arbitrators as may be specified in the arbitration agreement.
Where an arbitration agreement provides for a reference of the dispute to an even number of arbitrators, the
agreement shall provide for the appointment of another person as umpire who shall enter upon the reference, if the
arbitrators are equally divided in their opinion, and the award of the umpire shall prevail and shall be deemed to be
the arbitration award for the purpose of this Act.
An arbitration agreement referred to in sub-section (1) shall be in such form and shall be signed by the parties
thereto in such manner as may be prescribed.
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 the receipt of such copy, publish the same
in the Official Gazette.
Where an industrial dispute has been referred to arbitration and the appropriate Government is satisfied that the
persons making the reference represent the majority of each party, the appropriate Government may, within the
time referred to in sub-section (3), issue a notification in such manner as may be prescribed. When any such
notification is issued, the employees and workmen who are not parties to the arbitration agreement but are
concerned in the dispute, shall be given an opportunity of presenting their case before the arbitrator or arbitrators.
The arbitrator or arbitrators shall investigate the dispute and submit to the appropriate Government the arbitration
award signed by the arbitrator or all the arbitrators, as the case may be.
Where an industrial dispute has been referred to arbitration and a notification has been issued under sub-section
3(A), the appropriate Government may, by order, prohibit the continuance of any strike or lock-out in connection
with such dispute which may be in existence on the date of the reference.
Nothing in the Arbitration Act, 1940 [now Arbitration and Conciliation Act, 1996] shall apply to arbitrations under this
section.
When once the dispute is referred for arbitration under sec. 10A. appropriate Government cannot refer the same
dispute for adjudication under section 10.52
Requirement of publication of agreement under sub-section (3) is mandatory and non-compliance with that
requirement renders award invalid and unenforceable. Absence of penal provisions for non-compliance does not
make a provision directory, Court should ascertain the underlying idea and pur5p3 ose to be achieved by a
provision to decide whether it is mandatory or directory.53
In Nani Gopal Sarkar v. Heavy Engg. Corpn. Ltd., 54 the question before the Supreme Court was that whether the
award passed by the expert-arbitrator was valid even if there was non-complying with the procedure prescribed
under section 10-A of the Act. It was held by the Supreme Court that the High Court was in error in taking the view
that the award was void, in as much as the respondents themselves had not taken the stand that such award was
not binding on them or that they did not want to enforce the same. The expert-arbitrator had recommended that
time bound promotion system be introduced in Heavy Engineering Corporation for all categories of employees and
promotion be given in order of seniority and not on the basis of need or vacancy. While implementing this policy,
promotion from supervisory level to executive level was given after 7 years of service in the supervisory level. In the
case of office superintendents and personnel assistants alone the promotion could not be postponed to another 7
years. It was to remove this anamoly that the arbitrator had recommended these posts as wastage posts. In any
view of the matter, promotion from supervisory level to executive level had to be given in 7 years and not 14 years.
Page 3 of 3
Arbitrational Machinery or Voluntary Reference of Disputes to Arbitration [Section 10(A)]
52 Karnal Leather Karamchari Sangathan v. Liberty Footwear Co., (1989) 2 Lab LJ 550 [LNIND 1989 SC 425] : AIR 1990
SC 247 [LNIND 1989 SC 425].
53 Karnal Leather Karamchari Sanghtan (Regd.) v. Liberty Foot Wear Co. (Regd.), (1989) II LLJ 550 : AIR 1990 SC 247
[LNIND 1989 SC 425].
End of Document
Alternative Remedy
Courts or Tribunals
Learning Objectives
his workmen;
ALTERNATIVE REMEDY— Updated On 08-01-2019
The Supreme Court in its decision in Jai Bhagwan v. Ambala Central Coop Bank Ltd., 55 stated the legal position as
follows: Raising an industrial dispute is a well recognised and legitimate mode of obtaining redress available to
workmen, which has received statutory recognition under the ID Act. There is no reason why the statute recognised
mode of redress should be denied to a workman by reason of the existence or availability of another remedy. Nor
one can understand how an industrial tribunal to whom a dispute has been referred for adjudication can refuse to
adjudicate upon it and surrender jurisdiction which it undoubtedly had to some other authority once a reference has
been properly made to an Industrial Tribunal, the dispute has to be duly resolved by it and it has no discretion to
Page 2 of 2
Alternative Remedy
decide whether to adjudicate or not. Such adjudication cannot be set aside on the ground that the workman had
failed to pursue some other remedy.
55 (1984) 1 Lab LJ 52 : AIR 1984 SC 286 [LNIND 1983 SC 274].
End of Document
Procedure and Powers of Conciliation Officers, Boards, Courts and
Tribunals [Section 11]
Laws > PART I THE INDUSTRIAL DISPUTES ACT, 1947 > Procedure, Powers and Duties of
Authorities
Learning Objectives
his workmen;
CHAPTER 5 Procedure, Powers and Duties of Authorities
PROCEDURE AND POWERS OF CONCILIATION OFFICERS, BOARDS, COURTS AND TRIBUNALS [SECTION 11]—
Updated On 08-01-2019
Procedure [Section 11]
Subject to any rules that may be made in this behalf, an Arbitrator, a Board, Court, Labour Court, Tribunal or
National Tribunal has to follow such procedure as the arbitrator or other authority concerned may think fit.
Page 2 of 3
Procedure and Powers of Conciliation Officers, Boards, Courts and Tribunals [Section 11]
A conciliation officer or a member of a Board or Court or the presiding officer of a Labour Court, Tribunal or National
Tribunal may for the purpose of inquiry into any dispute may enter the premises occupied by any establishment to
which the dispute relates. He has to give reasonable notice before exercising this power. The power may be
exercised for the purpose of inquiry into any existing or apprehended dispute.
Powers
(1) Every Board, Court, Labour Court, Tribunal and National Tribunal has the same powers as are vested in a
Civil Court under the Code of Civil Procedure, 1908, when trying a suit in respect of the following matters,
namely:
(a) enforcing the attendance of any person and examining him on oath;
(b) compelling the production of documents and material objects;
(c) issuing commissions for the examination of witnesses;

(d) in respect of such other matters as may be prescribed.
Every inquiry or investigation by a Board, Court, Labour Court, Tribunal and National Tribunal shall
be deemed to be a judicial proceeding within the meaning of sections 193 and 228 of the Indian
Penal Code, 1860.
(2) A conciliation officer may enforce the attendance of any person for the purpose of examination of such
person or call for and inspect any document which he has ground for considering to be relevant to the
industrial dispute or 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 such purposes, the conciliation officer shall
have the same powers as are vested in a Civil Court under the Code of Civil Procedure, 1908 in respect of
enforcing the attendance of any person and examining him or of compelling the production of documents.
(3) A Court, Labour Court, Tribunal and National Tribunal may, if it so thinks fit, appoint one or more persons
having special knowledge of the matter under consideration as an assessor or assessors to advise it in the
(4) All conciliation officers, members of a Board or Court and presiding officers of a Labour Court, Tribunal or
National Tribunal shall be deemed to be public servants within the meaning of section 21 of the Indian
Penal Code, 1860.
(5) Subject to any rules made under the Act, the costs of, and incidental to, any proceeding before a Labour
Court, Tribunal or National Tribunal shall be in the discretion of that Labour Court, Tribunal National
Tribunal. They shall have full power to determine by and to whom and to what extent and subject to what
conditions, if any, such costs are to be paid, and to give all necessary directions for such purposes. The
costs may, on application made to the appropriate Government by the person entitled, be recovered by
that Government in the same manner as an arrear of land revenue.
(6) Every Labour Court, Tribunal or National Tribunal shall be deemed to be Civil Court for the purposes of
sections 345, 346 and 348 of the Code of Criminal Procedure, 1973.
(7) Every award made or 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 Civil Procedure Code, 1908.
Page 3 of 3
Procedure and Powers of Conciliation Officers, Boards, Courts and Tribunals [Section 11]
(8) the Labour Court, Tribunal or National Tribunal shall 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 it. Labour court and industrial tribunal while adjudicating an industrial dispute have the
right to override contracts and create rights that are opposed to contractual rights
Reappreciation of Evidence by High Court
In connection with the award of a labour court, it has been held that the High Court cannot by reappreciating
evidence come to a different conclusion. Where charges against workmen are not established, reappraisal of
evidence cannot be made. The court also cannot go into the question as to whether the charges could have been
established by better or further evidence. Such is not the function of the court or any guasi-judicial authority.
Where the respondent (since dead) who was removed from service for negligent driving raised an industrial dispute,
the Labour Court found him guilty of negligent driving and modified the punishment to one of compulsory retirement,
the High Court set aside that order and ordered his reinstatement. In appeal, the Supreme Court set aside the order
of High Court and held that there is no justification for High Court to interfere with award of Labour Court based on
evidence before it.
Where the workman himself accepted the opinion of the Medical Board as to assessment of his age, there was no
necessity for the company to examine the Medical Officer. Labour Court’s award in favour of workman was found
by the High Court to be perverse and illegal, and therefore, was set aside by it. The Supreme Court in appeal held
that when the judgment of the Labour Court was perverse and against facts, the High Court was entitled to exercise
its jurisdiction under Article 226 of the Constitution of India and interfere with the perverse finding and set aside the
same.
Power of Review and Amendment of Pleadings
The labour court has power to review its own decision on merits and more so when an order is only procedural
circumstances in which parties can seek permission to adduce additional evidence were explained in Amarnath v.
Swatantra Bharat Mills. The court said that the facts and circumstances of this case were clearly covered by the
Supreme Court decision in Shambu Nath Goel’s case. Majority of the judges held that an opportunity could be
asked for at the stage of filing the written statement and not later. No such request was made in the instant case
and the application filed at the belated stage did not explain the reasons for the delay.
Where an application was made even before the evidence of workmen was started, it was held to be not a belated
application.
If the prayer to lead evidence in support of the order of dismissal was made by the employer before the closure of
the proceedings in the Tribunal, denial of opportunity to the employer to lead evidence could not be justified.
End of Document
Powers of Labour Courts, Tribunals and National Tribunals to give
appropriate Relief in case of Discharge or Dismissal of Workmen [Section
11A]
Authorities
Learning Objectives
his workmen;
POWERS OF LABOUR COURTS, TRIBUNALS AND NATIONAL TRIBUNALS TO GIVE APPROPRIATE RELIEF IN CASE OF DISCHARGE
OR DISMISSAL OF WORKMEN [SECTION 11A]— Updated On 08-01-2019
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 Court
Page 2 of 4
Powers of Labour Courts, Tribunals and National Tribunals to give appropriate Relief in case of Discharge or
Tribunal or National Tribunal is satisfied that the order of discharge or dismissal was not justified, it may, by its
award—
(i) set aside the order of discharge or dismissal and direct re-instatement of the workman on such terms and
conditions, as it thinks fit; or
(ii) give such other relief to the workman including the award of any lesser punishment in lieu of discharge or
dismissal as the circumstances may require.
In any proceeding under the section the Court or Tribunal has to rely only on the materials on record and may not
take fresh evidence in relation to the matter.
In Rama Kant Misra v. State of U.P., 13 the Supreme Court converted the punishment of dismissal into one of
withholding of two increments. The court said : The management has not shown that there was any blameworthy
conduct on the part of the employee (Joint Secretary of the Union of Workmen) during the period of 7 years of
service he rendered prior to the date of the misconduct and the misconduct consisted of language indiscreet,
improper and disclosing a threatening posture. When it is said that the language discloses a threatening posture, it
is the subjective conclusion of the person who hears the language because voice modulation of each person differs.
Improper and abusive language may show lack of culture. But merely the use of such language on an occasion
unconnected with the subsequent positive action and not preceded by blameworthy conduct could justify the
extreme penalty of dismissal.
In Baldev Singh v. Presiding Officer, Labour Court, 14 the labour court found that the punishment of dismissal was
harsh and, therefore, directed reinstatement but without back wages, Supreme Court upheld this conclusion. It was
consistent with and not contrary to the provisions of s. 11A.
In still another case,15 the Supreme Court laid down that in the case of a proven misconduct, the Labour Court
could not order reinstatement with back wages. The workman was entitled either to get back wages without
reinstatement or reinstatement without back wages.
There is no strait jacket formula for awarding back wages, discretion to award back wages has to be for cogent
reasons and not arbitrary or fanciful.16
Where the discharge or dismissal was due to loss of the employer’s confidence, the court did not interfere because
it could not substitute its own confidence and direct reinstatement. The court found that a properly enquiry was held
into the conduct of the store keeper in respect of the shortfall. The store keeper was not able to give any
explanation about the shortage. The award of less punishment, like denial of 4 increments, was substituted by the
labour court. The Supreme Court did not approve this approach. The court said that such interference was not
called for because the case involved loss of confidence.17
In another case18 of this kind a bank employee was dismissed from service on account of his admitted misconduct
of withdrawing money unauthorisedly from a customer’s account. The Industrial Tribunal ordered reinstatement
without back wages. A writ petition the bank filed by the bank against the award of the Tribunal was dismissed by
the High Court.19 It was held that a bank employee deals with public money and therefore cannot be treated
leniently as has been done by the Tribunal in the present case. Award of the Tribunal was therefore liable to be
modified by inserting an additional condition that the employee would not get any increment for ten years with
cumulative effect.
Page 3 of 4
In still another case,20 a conductor was dismissed for misconduct. The Labour court upheld the finding that the
employee was guilty, yet directed reinstatement without back wages. This was set aside by a single judge of the
High Court but the Division Bench reversed the judgment. The Supreme Court following one of its own earlier
decisions21 and held that the decision of the single judge was to be restored. The court said that a Labour Court is
not entitled to interfere with punishment of dismissal. Discretion under S. 11-A is to be exercised judicially. The
main duty of a conductor is to issue tickets, collect fare money and deposit it with the employer which he failed to
do. It was a misplaced sympathy to under his reinstatement.
The principles of section 11-A cannot be engrafted into disciplinary proceedings of Government servant or other
employees governed by rules and not by Industrial Disputes Act. Where a cashier of a bank was dismissed from
service, it was held that the High Court erred in law in interfering with punishment and in re-appreciating materials in
exercise of second appellate jurisdiction.22
Scope of Judicial Interference
The court should not interfere with the administration’s decision unless it is illogical or suffered from procedural
impropriety or is shocking to the conscience of the court.
Where a conductor in road transport service was removed from service on charges of not issuing tickets to
passengers and failure to collect fare, it was held that when a person holding post of trust is found guilty of breach
of trust, his removal from service is justified. The Supreme Court observed that the scope of interference with
quantum of punishment has been the subject-matter of various decisions of this Court. Such interference cannot be
a routine matter.
Lord Greene said in 1948 in the famous Wednesbury case, that when a statute gave discretion to an administrator
to take a decision, the scope of judicial review would remain limited. He said that interference was not permissible
unless one or the other of the following conditions was satisfied, namely the order was contrary to law, or relevant
factors were not considered, or irrelevant factors were considered, or the decision was one which no reasonable
person could have taken. These principles were consistently followed in the UK and in India to judge the validity of
administrative action. It is equally well known that in 1983, Lord Diplock in Council for Civil Services Union v.
Minister of Civil Service, (CCSU case) summarised the principles of judicial review of administrative action as
based upon one or other of the following viz., illegality, procedural irregularity and irrationality. He, however, opined
that “proportionality” was a “future possibility”.
In Om Kumar v. Union of India, this court observed, interalia, as follows:
The principle originated in Prussia in the nineteenth century and has since been adopted in Germany, France and
other European countries. The European Court of Justice at Luxembourg and the European Court of Human Rights
at Strasbourg have applied the principle while judging the validity of administrative action. But even long before that,
the Indian Supreme Court has applied the principle of “proportionality” to legislative action since 1950, as stated in
detail below.
By “proportionality”, we mean the question whether, while regulating exercise of fundamental rights, the appropriate
or least-restrictive choice of measures has been made by the legislature or the administrator so as to achieve the
object of the legislation or the purpose of the administrative order, as the case may be. Under the principle, the
Court will see that the legislature and the administrative authority “maintain a proper balance between the adverse
effects which the legislation or the administrative order may have on the rights, liberties or interests of persons
keeping in mind the purpose which they were intended to save.” The Legislature and the Administrative Authority
are, however, given an area of discretion or a range of choices but as to whether the choice made infringes the
rights excessively or not is for the Court. That is what is meant by proportionality”.
Page 4 of 4
13 (1982) 2 Lab LJ 472 [LNIND 1982 SC 149] (SC).
14 (1995) 3 Lab LJ (Suppl) 462 : AIR 1987 SC 104 : (1986) 4 SCC 519.
15 Mukund Engg. Works v. Bansi Purshottam, (1995) 2 Lab LJ 62 : 1994 Supp (2) SCC 725. A workman who violated
standing orders by consuming liquor while on duty was allowed to be reinstated but without back wages. Jaswant Singh
v. Pepsu Roadways Transport Corpn., (1984) 1 Lab LJ 33 [LNIND 1983 SC 259] (SC). A driver was dismissed for
making illegal demands on the conductor and inflicting grevious inujury on him. The order of the Tribunal reinstating
him was held to be a misplaced sympathy, Rajasthan State Road Transport Corpn. v. Habib Khan, (1993) 2 Lab LJ 328
(Raj—DB).
16 Hindustan Motors Ltd. v. Tapan Kumar Bhattacharya, (2002) II LLJ 1156 : (2002) 6 SCC 41 [LNIND 2002 SC 430].
17 UPSRTC v. Mohan Lal Gupta, (2000) 9 SCC 521 : (2000) 2 LLJ 1597.
18 Asstt. GM, SBI v. Thomas Jose, (2000) 10 SCC 280 : (2000) 2 LLJ 1599.
19 Rel. upon Scooters India Ltd. v. Labour Court, (1989) Supp 1 SCC 31.
20 Regional Manager, RSRTC v. Ghanshyam Sharma, (2002) 1 Lab LJ 234 : (2002) 10 SCC 330 [LNIND 2001 SC
1616].
21 Karnataka State Road Transport Corpn. v. B.S. Hullikatti, (2001) 1 Lab LJ 725 : (2001) 2 SCC 574 [LNIND 2001 SC
202].
22 Tripura Gramin Bank v. Tarit Baram Roy, (2001) I LLJ 1330 : (2001) 10 SCC 70.
End of Document
Examples Regarding [Section 11A]
Authorities
Learning Objectives
his workmen;
EXAMPLES REGARDING [SECTION 11A]— Updated On 08-01-2019
(1) Neeta Kaplish v. Presiding Officer, Labour Court. 29 In this case, it was held that the provisions of the Industrial
Disputes Act were amended by the Central Act 45 of 1971 and section 11-A was introduced w.e.f. December 15,
1971. This was done on the recommendation of the International Labour Organisation. Section 11-A was introduced
in the Industrial Disputes Act by the Parliament, by which it was provided that the tribunal would have not only the
power to set aside an order of dismissal and direct reinstatement of workman, but also power to award lesser
punishment. The proviso to s. 11-A further provides that the Tribunal would rely only on the material already on
record and shall not take any fresh evidence.
Page 2 of 5
The jurisdiction of the Labour Court or Tribunal to itself decide the merits of charges on fresh evidence remains
intact.
Proceedings of defective domestic inquiry would not constitute “fresh evidence” and “material on record”. Defective
Inquiry Proceeding has to be ignored altogether. The workman would be entitled to relief as claimed since the
management did not lead any fresh evidence on merits and the workman was justified in stating that he too would
not lead any fresh evidence. It was held by the Supreme Court that the claim of the workman cannot be rejected for
not leading evidence. Workman was entitled to be granted relief then and there.
(2) Bharat Forge Company Limited v. A.B. Zodge, 30 the Supreme court held in this case that if the prayer to lead
evidence in support of the order of dismissal was made by the employer before the closure of the proceeding in the
Tribunal, denial of opportunity to the employer to lead evidence before the Tribunal in support of the order of
dismissal cannot be justified.
(3) Chandra Shekara Chari H.S. v. Divisional Controller, KSRTC. 31 In this memorable case, fortunes of litigation
swayed for nearly a decade between the dismissed appellant-workman and the respondent-management and even
then it showed no sign of abatement the Supreme Court remanding the whole case back to the single Judge to
rehear it on merits, although the appellant-workman was not allowed to suffer during the further continuation of
litigation. The appellant-workman challenged his dismissal from service and succeeded before the Labour Court,
but failed in a writ petition filed by the respondent management challenging the Labour Court’s award. He also
failed in a writ appeal preferred by him from the single Judge’s order in the writ petition. Hence the present appeal
was preferred by the workman. The Supreme Court disposed of the appeal remanding the case to the single judge
to rehear it on merits.
The Supreme Court observed that the single judge’s judgement as well as that of the Division Bench in writ appeal,
could not be sustained for the simple reason that it was not open to the single Judge to re-appraise the evidence
once the Labour Court had found that the charges against the appellant were not establishment. The single Judge
had no jurisdiction, not even under section 11-A of I.D. Act, to enter into the question, which the single Judge
purported to do as to, whether the charges could have been establishment by better or further evidence. That was
not the function of the court or any guasi-judicial authority.
(4) Palghat BPL & PSP Thozhilali Union v. BPL India Ltd., 32 It was held by the Supreme Court in this case that any
act subversive of discipline committed outside the premises is also misconduct. Any act unrelatable to the service
committed outside the factory would not amount to misconduct.
The Labour Court had discretion under section 11-A of the I.D. Act to consider the quantum of misconduct and the
punishment. The Labour Court was justified in taking a lenient view in setting aside the order of dismissal. The
discretion exercised by the Labour Court was, in the opinion of the Supreme Court, proper and justified in the
circumstance of the case.
Labour court was directed to decide whether the workmen were gainfully employed from the date of dismissal till
reinstatement, in order that the management liability to pay back wages might be determined.
(5) Hindustan Machine Tools Ltd., Bangalore v. Mohd Usman. 33 It was held by the Supreme Court here that section
11-A confers powers on Labour Court to evaluate the gravity of misconduct and to assess whether punishment
imposed by the employer is commensurate with the gravity of the misconduct. This power is specifically conferred
on the Labour Court under s. 11-A. If the Labour Court after evaluating the gravity of the misconduct held that the
punishment of termination of service is disproportionately heavy in relation to misconduct it can exercise its
discretion. The Court, in the absence of any important legal principles, would not undertake to re-examine the
question of adequacy or inadequacy of material for interference in the decision of the Labour Court.
Page 3 of 5
(6) Rama Kant Mishra v. The State of U.P. 34 In this case, an employee, who was the joint secretary of the Union of
workmen having a clean record of service of 14 years was found guilty of conduct likely to cause breach of peace
threatening an employee within the premises and cause prejudice to good order and discipline, was dismissed from
service. The employee is said to have committed the misconduct, while explaining about the deduction made from
his wages for absence from the place of work, and late attendance. The Labour Court up held the dismissal. The
writ petition filed under Article 227 was dismissed by the High Court. On appeal under Article 136, the Supreme
Court held that to some extent misconduct is a civil wrong which is visited with civil and pecuniary consequences. In
order to avoid the charge of vindictiveness, justice, equity and fair play demand that punishment must always be
commensurate with the gravity of the offence charged. In the development of industrial relations norms, we have
moved far form the days when quantum of punishment was considered a managerial function and the courts had no
power to substitute their own decision in the place of that of the management. More often the Courts found that
while the misconduct was proved the punishment was disproportionately heavy. As the situation then stood courts
remained powerless and had to be passive sufferers incapable of curing the injustice. Parliament stepped in and
enacted sec. 11-A of the I.D Act.
It was further held by the Supreme Court that at present this Court is exercising jurisdiction under Article 136 over
the decision of the Labour Court. Therefore, this court can examine whether the Labour Court has properly
approached the matter for exercising or refusing to exercise its power under section 11-A.
The Supreme Court while converting the punishment of dismissal into one of withholding of two increments with
future effect, held, “that the management has not shown that there was any blameworthy conduct of the appellant
during the period of 14 year service he rendered prior to the date of misconduct and the misconduct consists of
language indiscreet, improper and disclosing a threatening posture...”
(7) Janatha Bazaar South Kanara Central Co-operative Wholesale Stores Ltd. v. Secretary, Sahakari Noukarara
Sangha, 35 In this case, the Labour Court found the charges of misappropriation and breach of trust against
dismissed workmen to be proved but directed reinstatement of workmen with 25% back wages and imposing
penalty of stoppage of 5 increments with cumulative effect, it was held that the Labour Court erred in setting aside
dismissal of workmen. Once misappropriation stood proved, it was held that showing sympathy was uncalled for.
(8) ARSRTC v. K. Pochiah, 36 Here the Labour Court upheld the order of dismissal issued to workman but High
Court upholding that award directed the employer to provide appointment in lower category as new entrant. It was
held by the Supreme Court that the High Court has no jurisdiction to issue such direction after upholding order of
dismissal. It can reduce severity of punishment only on finding that the punishment was disproportionate. It was
further held by the Supreme Court that no jurisdiction is vested in High Court to direct employer to re-employ
delinquent employee after upholding punishment.
(9) State Bank of India v. Tarun Kumar Banerjee 37 If industrial tribunal finds order of discharge or dismissal of
workman not justified, it can reappraise evidence adduced in domestic enquiry and decide question of misconduct
alleged against-workman. In this case, charge of misconduct was proved against workman and order of tribunal
was held to be not sustainable.
(10) Reserve Bank of India v. P.O. Central Government Industrial Tribunal-Cum-Labour Court, Bangalore, 38
Interference with punishment by industrial tribunal is not available in all cases. The tribunal had found the
respondent to be a habitual and chronic absentee. In the light of such conduct of the workman, no case was made
out for invoking section 11-A of the I.D. Act. It was held by the High Court that interference thereunder in such
matters would be misplaced sympathy affecting working of the Bank.
Powers Regarding Discovery, Inspection, etc.
Regarding the powers of the Tribunal with reference to discovery, production and inspection of documents, the
Page 4 of 5
Madras High Court held that the Tribunal is vested with the same powers as a Civil Court under the Civil Procedure
Code. The Punjab High Court held in PNB Ltd. v. Ram Kanwar, that the minutes of the meeting of the Board of
Directors of a Bank could not be ordered to be produced by the Industrial Tribunal as it could not be done by a Civil
Court under the C.P.C.
Order XI and section 30 of the CPC govern the powers of the Industrial Tribunal relating to discovery, production
and inspection. The Calcutta High Court held that until an affidavit of documents has been directed to be filed, the
Court would have no jurisdiction to order inspection.
Under section 11-A, the Labour Court is the sole judge of facts including the question of quantum of punishment
under the section. The Labour Court has the duly to consider whether the punishment is disproportionate to the
charges proved, in addition to its primary duly to adjudicate the tenability of the charge itself.
Where the charges are grave in nature, the Labour Court cannot embarrass the management and affect the morale
and discipline of the establishment by resorting to s. 11A and modifying the extent of punishment meted out by the
management to an erring workman.
The Labour Court can entertain an application for protection of existing rights under s. 33C(2). Proceedings under
this section are in the nature of execution proceedings. Whenever the question of determination of rights arises, the
Government must necessarily make reference under s. 10 of the Act.
Applicability of Rules of Evidence to Authorities
It has been held that, there being no provision under the rules that the rules of evidence laid down in the Indian
Evidence Act would be applicable to enquiries by an Industrial Tribunal. The Tribunal could on evidence gathered
by it on a visit to a factory base its award on materials not on the record.
The labour court should follow the judicial procedure. It cannot choose to depend upon unverified statements made
in the report of conciliation and other officers. Evidence tendered in the court should be based upon claim
statements. Inconsistent stand of party in the court should not bring in any result.
29 (1999) 1 LLJ 275 : (1999) 1 LLJ 275.
31 (1999) I LLJ 1322 : AIR 1999 SC 1843 [LNIND 1999 SC 1887].
32 (1996) II LLJ 335 : (1995) 6 SCC 237 [LNIND 1995 SC 886].
34 (1982) 2 LLJ 472 [LNIND 1982 SC 149] : AIR 1982 SC 1552 [LNIND 1982 SC 149].

Page 5 of 5
37 (2000) II LLJ 773 (SC).
38 2005 III LLJ 14 (Karn).
End of Document
Duties of Labour Courts, Tribunals and National Tribunals [Section 15]
Authorities
Learning Objectives
his workmen;
DUTIES OF LABOUR COURTS, TRIBUNALS AND NATIONAL TRIBUNALS [SECTION 15]— Updated On 08-01-
2019
Where an industrial dispute has been referred to a Labour Court, Tribunal or National Tribunal for adjudication, it
has to hold its proceedings expeditiously. It should submit its award to the Central Government within the period
specified in the order referring dispute or within the further period extended under S. 10(2A) proviso.49
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Duties of Labour Courts, Tribunals and National Tribunals [Section 15]
49 See Agra District Cooperative Bank Ltd. v. Presiding Authority, Labour Court, AIR 2001 SC 2396, mere coverage of a
dispute under s. 70 of the UP Co-operative Societies Act, 1965 does not bar the jurisdiction of the Labour Court. It was
further held that objections, if any to jurisdiction should have been raised at the time when the matter was before the
High Court and not when the matter was referred back to the labour court for reconsideration. Hussan Mithu
Mhasvadkar v. Bombay Iron & Steel Labour Board, (2001) 7 SCC 394 [LNIND 2001 SC 1973], a larger issue should be
considered first, e.g., whether the given organisation is an industry or not.
End of Document
Form of Report or Award [Section 16]
Authorities
Learning Objectives
his workmen;
FORM OF REPORT OR AWARD [SECTION 16]— Updated On 08-01-2019
The report of a Board or a Court has to be in writing and signed by all the members of the Board or Court, as the
case may be.
Any member of the Board or Court is not prevented from recording any minute of dissent from a report or from any
recommendation made in it.
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Form of Report or Award [Section 16]
The award of a Labour Court, Tribunal or National Tribunal has to be in writing and signed by its presiding officer.
End of Document
Publication of Reports and Awards [Section 17]
Authorities
Learning Objectives
his workmen;
PUBLICATION OF REPORTS AND AWARDS [SECTION 17]— Updated On 08-01-2019
Every report of a Board or Court together with any minute of dissent recorded in it, every arbitration award and
every award of a Labour Court, Tribunal or National Tribunal has to be published by the appropriate Government. It
has to be published within a period of thirty days from the date of its receipt by the appropriate Government in a
manner it thinks fit.
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Publication of Reports and Awards [Section 17]
The award published as abovestated is final and cannot be called in question by any Court in any manner
whatsoever but is subject to the provisions of section 17A.
End of Document
Commencement of Award [Section 17A]
Authorities
Learning Objectives
his workmen;
COMMENCEMENT OF AWARD [SECTION 17A]— Updated On 08-01-2019
An award (including an arbitration award) becomes enforceable on the expiry of thirty days from the date of its
publication where—
Page 2 of 4
(a) 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 the appropriate Government is of opinion; or
(b) in any case where the award has been given by a National Tribunal the Central Government is of 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 award, the appropriate Government may declare that the award shall not become enforceable on the
expiry of said period of thirty days. This declaration has to be made by the notification in the Official Gazette. [Sub-
section (1)].
The fact of rejection or modification of the award has to be laid before the legislature of the State or the Parliament.
Where such a declaration has been made, the appropriate Government or the Central Government may within 90
days from the date of publication of award make an order rejecting or modifying the award. If the order has been
made by a State Government the award has to be laid with a copy of the order before the legislature of the State.
Where the order is made by the Central Government, then it has to be laid before the Parliament with a copy of the
order. [sub-section (2)].
Where any award as rejected or modified by an order 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. Where no
order is made in pursuance of a declaration, the award becomes enforceable on the expiry of the period of ninety
days [sub-sections (3)].
Subject to the provisions abovestated regarding the enforceability of an award, the award comes into operation with
effect form such date as may be specified in the award. But where no such date is specified, it comes into operation
on the date when the award becomes enforceable under sub-section (1) or sub-section (3), as the case may be.
Ex-parte Proceedings
It has been held that the Tribunal has powers to proceed ex-parte in the absence of any of the parties to the
dispute. The Industrial Tribunal retains its jurisdiction to deal with an application for setting aside an ex-parte award
only until expiry of 30 days from publication of the award. Thereafter, the tribunal is relegated to the position of
functus officio.
Nature of Industrial Tribunal’s Jurisdiction
Industrial Tribunals and Labour Courts are creatures of the relevant statutes. They being comparatively new to the
existing set-up of courts, questions about the nature of their jurisdiction have often been arisen. In Bharat Bank Ltd.,
Delhi v. The Employees of the Bharat Bank Ltd., and the Bharat Bank Employees’ Union, Delhi, it was held on the
preliminary point that the word ‘Tribunal’ in Article 136 has to be construed liberally and not in any narrow sense
and an Industrial tribunal, inasmuch as it discharge functions of judicial nature in accordance with law, comes within
the ambit of Article 136 of the Constitution of India. The Industrial Tribunal set up under section 7 of the ID Act
possesses all the necessary attributes of a court of justice and as such an application for special leave against its
decision could be entertained and granted.
“Their powers are derived from statute that creates them and they have to function within the limits imposed there and to
act according to its provisions. Those provisions invest them with many of the trappings” of a court and deprived them of
arbitrary and absolute discretion and power. “When the Constitution of India converted this country into a great sovereign
democratic republic, it did not invest it with the mere trappings of democracy and leave it with merely its outward forms of
behaviour but invested it with the real thing, the true kernel of which is the ultimate authority of the courts to restrain all
exercise of absolute and arbitrary power, not only by the executive and by officials and lesser tribunals, but also by the
Page 3 of 4
legislatures and even by the Parliament itself. The constitution established a ‘Rule of Law’ in this land that carries with it
restraints and restrictions that are foreign to despotic power.”
The tribunals under the Act and other State Acts very broadly follow the pattern of the civil courts. Once the
reference is made by the Government, the Tribunal has to take the pleadings of the parties in writing and to draw up
issues. Then it has to take evidence, it hears arguments and finally pronounces ‘its judgment’ in an open court. It is
evident from this that though these tribunals are not bound by all the technicalities of civil courts, they must
nevertheless follow the same general pattern. Now the only point in requiring pleadings and issues is to ascertain
the real dispute between the parties in order to narrow the area of conflict and to see just where the two sides differ.
It is not open to the Tribunals to fly off at a tangent and, disregarding the pleadings, to reach any conclusions that
they think are just and proper.”
The respondent-workmen were appointed in 1977 as muster roll employees on daily wage basis. They raised
dispute more than once before the Industrial Tribunal seeking regularisation of their service besides relief against
their retrenchment. The Tribunal held them deemed to be regularised after three years of their joining of service.
The decision was confirmed by High Court. In appeal by the employer-corporation, the Supreme Court observed
that though the Industrial Adjudicator, unlike a Civil Court could vary the terms of contract of employment to
maintain industrial peace, as contended by the respondents, it could not do something which was violative of Article
14 of the Constitution of India. If the case was one which was covered by the concept of regularisation, same could
not be viewed differently. There could not be a case for regularisation without there being employer-employee
relationship. Concept of regularisation was linked with Article 14 of the Constitution.
Non-enforceability of Award
It is not necessary to enforce the award. The discretion lies in the hands of the appropriate Government or the
Central Government to restrict the enforcement of the award on the expiry of the period of thirty days. If the
appropriate Government is of opinion in any case where the award has been given by a Labour Court or Industrial
Tribunal in relation to an industrial dispute to which it is a party, or if the Central Government is of opinion in any
case where the award has been given by the National Tribunal, that it will be inexpedient on public ground affecting
national economy or social justice to give effect to the whole or any part of the award, the appropriate Government
or the Central Government may declare that the award will not become enforceable on the expiry of the period of
thirty days. The declaration has to be made by notification in the Official Gazette [Section 17A(1) Proviso].
Interference by Higher Courts in Awards
The High Court can interferes in the awards under Articles 226 and 227 of the Constitution of India while the
Supreme Court can interfere under Articles 132 and 136 of the Constitution of India.
Rejection or Modification of Awards Affecting National Economy
Where any declaration of non-enforceability has been made in relation to an award, the appropriate Government or
the Central Government may, within ninety days from the date of publication of award, make an order rejecting or
modifying the award. On the first available opportunity, the Government has to 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.
Where any award as rejected or modified by an order is laid before the Legislature of a State or before Parliament,
such award become enforceable on the expiry of fifteen days from the date on which it is so laid. Where no order is
made in pursuance of a declaration the order becomes enforceable on the expiry of period of ninety days [section
17A (2) and (3)].
Page 4 of 4
Operation of Awards
Subject to the abovestated provisions of Section 17A(1) and (3) regarding enforceability of an award, the award
comes into operation with effect from such date as may be specified therein. Where no date is so specified, it
comes into operation on the date when the award becomes enforceable under sub-section (1) or (3), as the case
may be.
End of Document
Payment of Full Wages to Workman Pending Proceedings in Higher Courts
[Section 17B]
Authorities
Learning Objectives
his workmen;
PAYMENT OF FULL WAGES TO WORKMAN PENDING PROCEEDINGS IN HIGHER COURTS [SECTION 17B]—
The section provides for payment of full wages to workmen during the pendency of proceedings in higher courts.
The section says that—
Page 2 of 3
Payment of Full Wages to Workman Pending Proceedings in Higher Courts [Section 17B]
(i) where in any case, a Labour Court, Tribunal or National Tribunal by its award directs reinstatement of any
workman, and
(ii) the employer prefers any proceedings against such award in a High Court or the Supreme Court,
(iii) the employer shall be liable to pay to such workman,
(iv) full wages last drawn by him during the period of pendency of such proceedings either in the High Court or
the Supreme Court,
(v) such wages will be inclusive of any maintenance allowance admissible to him under any rule if the
workman had not be employed in any establishment during such period and an affidavit to that effect had
been filed by such workman in such court.
The proviso says that where it is proved that such workman had been employed and had been receiving adequate
remuneration during any such period (or part thereof) to the satisfaction of the High Court or the Supreme Court,
the Court shall order that no such wages shall be payable under this section for such period (or the part).
Where the appellant employer placed before the court copies of vouchers showing payment of salary to the
respondent by a transport company where the workman had worked after dismissal from appellant but the High
Court failed to consider them at the time of deciding the dispute, matter was remanded by the Supreme Court for
fresh adjudication in accordance with law.55
The section is applicable only when challenge to the award is pending, the award which became final prior to the
enforcement of the section can not be reopened by resort to the section.56
The provision of section 17-B does not require employee to file affidavit at every point of time that he was not
gainfully employed.57
Where the High Court directed disposal of application under section 17-B and writ petition filed under Article 226 of
the Constitution of India regarding payment of wages together, it was held that application under section 17-B
should be disposed of before principal writ petition.58
Section 17-B does not preclude High Court or the Supreme Court from granting better benefits than contemplated
by it but the amount over and above payable under the section may be subject to recovery by the employer, if
employer ultimately succeeds in writ petition.59
The object of section 17-B is to relieve to certain extent hardship caused to workman due to delay in
implementation of award. Only plain and material meaning should be given to words “full wages last drawn” and no
extended meaning can be given.60
Where the labour court had awarded full back wages to the employee without enquiring as to whether he was
gainfully employed during period between termination of service and superannuation, the Supreme Court held that
in view of the fact that appellant company has been referred to BIFR and according to appellant, it was insolvent
and had stopped all manufacturing activity, it was unlikely that the employee would get payment for some time.
Therefore, it was held that fresh enquiry would unnecessarily delay the matter; the employee was granted wages
calculated earlier.61 Where the workman in his application asserted that he was unemployed after his termination
whereas the appellant employer submitted a certificate of workman’s current employer, it was held that the
workman was not entitled to any relief due to deliberate suppression and misrepresentation.62
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Payment of Full Wages to Workman Pending Proceedings in Higher Courts [Section 17B]
Where full payment is made to the worker and all conditions of section 17-B are complied with, reinstatement of
worker is held to be not necessary in the circumstances.63
55 Rajasthan Gramin Bank v. Bishan Lal Bairwa, (2010) 13 SCC 248 [LNIND 2009 SC 818].
56 Bharat Singh v. Management of New Delhi Tuberculosis Centre, AIR 1986 SC 842 [LNIND 1986 SC 105].
57 Narendra Kumar v. Taj Services Ltd., (2001) II LLJ 417 (SC).
58 Workmen v. Hindustan Vegetable Oils Corpn., Ltd., (2000) II LLJ 792 (SC).
59 Regional Authority, Dena Bank v. Ghanshyam, (2001) II LLJ 252 (SC).
60 Dena Bank v. Kiriti Kumar T. Patel, (1998) I LLJ (SC).
61 Guest Keen Williams Ltd. v. BR Govindaswamy, (2010) 15 SCC 747.
62 Mengal Nagpur Cotton Mills v. Bharat Lal, (2011) 1 SCC 635 [LNIND 2009 SC 824].
63 UP SEB v. Sone Lal, (2009) 16 SCC 301.
End of Document
Persons on Whom Settlements and Awards are Binding [Section 18]
Authorities
Learning Objectives
his workmen;
PERSONS ON WHOM SETTLEMENTS AND AWARDS ARE BINDING [SECTION 18]— Updated On 08-01-2019
A settlement arrived at by agreement between the employer and workman otherwise than in the course of
conciliation proceeding is binding on the parties to the agreement.
An arbitration award which has become enforceable will be binding on the parties to the agreement who referred
the dispute to arbitration subject to the provisions of sub-section(3).
Page 2 of 4
A settlement arrived at in the course of conciliation proceedings under the Act or an arbitration award in a case
where a notification has been issued under subsection (3A) of section 10A or an award of a Labour Court, Tribunal
or National Tribunal which has become enforceable shall be binding on—
(a) all parties to the industrial dispute;64
(b) 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 summoned without proper cause;
(c) where a party referred to in clause (a) or clause (b) is an employer, his heirs, successors or assigns in
respect of the establishment to which the dispute relates;
(d) 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 in any part of it [section 18(3)].
Any settlement which has been arrived at by agreement between the employer and workman otherwise than is the
course of conciliation proceedings shall be binding on the parties to the agreement.
Section 18 declares the extent of binding effect of settlement and awards. If by a particular decision or award
certain workmen have been held entitled to some benefits, it does not mean that by operation of this section those
who do not stand on the same footing should in the same circumstances also benefit by the same considerations.
Section 18 would apply where a particular award or decision does not apply only to a particular section of the
workers and where the award is not intended for a limited class. Section 18 does not lay down that in spite of the
fact that particular number of the old workmen are to get certain benefits, new entrants will be equally entitled to the
same benefits though they have been by necessary implication excluded from the operation of the award. Where
the dispute regarding the increase in working hours was referred for adjudication, the award granting additional
wages for such increased hours from the date of such increase could not be availed of by workmen employed
subsequently to the date of such increase.
In its decision in National Engineering Industries Ltd. v. State of Rajasthan, 65 the Supreme Court attempted a
comparison of persons bound and those not bound:
There is an underlying assumption that the settlement reached with the help of the Conciliation Officer must be fair
and reasonable. Sections 18(1) and 18(3) divide settlements into two categories, namely, (1) those arrived at
outside the conciliation proceedings, and (2) those arrived at in the course of conciliation proceedings. A settlement
which belongs to the first category has a limited application since it merely binds the parties to the agreement. The
settlement belonging to the second category has an extended application since it is binding on all the parties to the
industrial disputes, all others who were summoned to appear in the conciliation proceedings and on all persons
employed in the establishment or part of the establishment, as the case may be, to which the dispute related on the
date of the dispute and on all others who joined the establishment subsequently. A settlement arrived at in the
course of conciliation proceedings with a recognised majority union will be binding on all workmen of the
establishment, even those who belonged to the minority union which had objected to the same. When a settlement
is arrived at during the conciliation proceedings it is binding on the members of the workers’ union as provided in S.
18(3)(d) of the Act. It would ipso facto bind all the existing workmen who are all parties to the industrial dispute and
who may not be members of unions that are signatories to such settlement under S. 12(3) of the Act. The Act is
based on the principle of collective bargaining for resolving industrial disputes and for maintaining industrial peace.
Page 3 of 4
Arbitration Award and its Binding Effect
In an ordinary dispute, if the parties submit it to arbitration, the award of the arbitrator is binding on them under the
general law and cannot be challenged except on grounds specified in law. If the dispute is an industrial dispute and
the submission to arbitration is a part of the settlement arrived at a conciliation proceeding, the decision of the
arbitration stands on a higher footing and is binding under the express statutory provision contained in section 18 of
the Industrial Disputes Act, 1947. When an arbitrator appointed by the parties in settlement during conciliation
proceedings relating to the dismissal of certain workmen orders their reinstatement, it cannot be modified by a
tribunal on the ground that compensation and not reinstatement is the proper order.
Settlement between parties regarding transfer of office-bearers of Central Executive Committee of recognised trade
unions can be enforced without raising an industrial dispute by way of suit or writ petition if relief sought for is
against authority or remedy permissible under law, not necessarily under section 10 of the Act.
Tribunal’s Power to Add Parties
It has been held that under clause (b) the power of the tribunal to summon parties other than the original parties to
an industrial dispute can be implied and, therefore, the industrial tribunal could add any person or establishment as
parties to the proceedings whose presence is necessary or proper for the due and just adjudication of the dispute.
The power conferred under clause (b) is analogous to the power of a Civil Court under Order 1 Rule 9 of the Code
of Civil Procedure.
Award Governing Previous Employees will not Bind Corporation
Under the ordinary law of contract an agreement is binding only on those persons who are parties to it, but this is
not applicable in cases of industrial disputes where the principle of collective bargaining has been accepted.
According to sec. 18 this general principle is not applicable in case of industrial disputes. A few persons should not
be permitted to jeopardise the interests of majority of workers. From the use of the expression ‘establishment’ in the
Industrial Disputes Act, it is fairly clear that the establishment must exist in some definite and identifiable form. The
binding nature of the settlements and awards continues only so long as it can be said that the establishment
continues. With the extrication of the establishment the binding nature of the settlements and awards would cease.
Award of a Labour Court and Industrial Tribunal normally binds only parties. A successor-in-interest to a party under
agreement of merger is bound by proceedings which have taken place till merger. It has no right to recall a witness
for cross-examination. Dismissal of application for recalling witness for cross-examination cannot be a ground for
setting aside tribunal’s order.
Settlement reached during conciliation proceedings is binding not only on member of signatory unions but also on
workmen whose unions having participated in proceedings, refused to sign settlement. A settlement ipso facto
binds all workmen who were parties to the Industrial dispute. Provisions in Chapter V-A override only ‘any other law’
but not “any other part of the Act.”
Regarding the applicability of settlement to employees appointed after expiry of the settlement, it was held in a case
that it was not ap7p1 licable. Termination of settlement can be implied, it need not always be express.
Where the settlement was entered into by the employer-bank with one union and the Central Government made
reference for adjudication of legality of term of settlement at the instance of another party which was not a party to
the settlement, it was held that the settlement not being one entered into before Conciliation Officer or Labour Court
will be binding only on parties to it. It was further held that as the reference in question did not refer to any dispute,
existing or apprehended between the bank and the second union, the reference for adjudication was held not
justified.
Page 4 of 4
64 Indian Rare Earths Ltd. v. Promod Chandra Panigrahi, (2006) I LLJ 1080 : (2005) 13 SCC 379.
65 (2000) 1 SCC 371 [LNIND 1999 SC 1079] : AIR 2000 SC 469 [LNIND 1999 SC 1079].
End of Document
Period of Operation of Settlement and Awards [Section 19]
Authorities
Learning Objectives
his workmen;
PERIOD OF OPERATION OF SETTLEMENT AND AWARDS [SECTION 19]— Updated On 08-01-2019
It has been held that settlements can be divided into two categories, those arrived at outside the conciliation
proceedings and those arrived at in the course of conciliation proceedings. A settlement arrived at in the course of
conciliation with a recognised majority union will be binding on all workers of the establishment irrespective of any
objection.73
A settlement comes into operation on such date as is agreed upon by the parties to the dispute. If no date is agreed
Page 2 of 3
upon, settlement comes into operation on the date on which the memorandum of the settlement is signed by the
parties to the dispute.
Such settlement remains binding for such period as is agreed upon by the parties. Where no such period is agreed
upon, it remains binding for a period of six months from the date on which the memorandum of settlement is signed
by the parties to the dispute. It continues to bind the parties after the expiry of the aforesaid period 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 other parties to the settlement.
An award remains in operation for a period of one year from the date on which the award becomes enforceable
under section 17A. However, the appropriate Government may reduce the period and fix such other period as it
thinks fit.
The appropriate Government may, before the expiry of the period, extend the period of operation by any period not
exceeding one year at a time as it thinks fit so. But the total period of operation of any award is not to exceed three
years from the date on which it came into operation. These provisions do not apply to any award, which by its
nature, terms or other circumstances does not impose any continuing obligation on the parties bound by the award
after the award has been given effect to the award continues to be binding on the parties until a period of two
months has elapsed from the date on which notice is given by any party bound by the award to the other parties
intimating its intention to terminate the award, notwithstanding the expiry of period of operation.74
The period of operation of award can also be shortened by the appropriate Government. Where the appropriate
Government considers that since the award was made, there has been a material change in the circumstances on
which it was based, the Government may refer the award or part of it to a Labour Court or to a Tribunal or to a
National Tribunal, if the award was that of a Labour Court, Tribunal or National tribunal respectively, for decision
whether the period of operation should not, by reason of such change, be shortened. The decision of the Labour
Court, Tribunal or National Tribunal on such reference is the final decision.
No notice given by one party to another party regarding intention to terminate the award or settlement has effect,
unless it is given by a party representing the majority of persons bound by the award or settlement.
It was held in a Supreme Court case that a settlement reached between workers and management is binding not
only for the agreed period but also even after expiry of the period 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.75 [s. 19(7)].
It is not the requirement of s. 19(2) of the Act that there should be a formal notice terminating a settlement. A notice
can be inferred from the correspondence between the parties.76
Explaining the object of these provisions the Supreme Court observed : A settlement once entered into between the
parties shall be operative until the same is terminated as provided in S. 19 of the Act. The object of such a provision
is to ensure that once a settlement is entered into then industrial peace prevails bringing about cordialities between
the parties during the period agreed upon. The same position should continue by extension of the settlement by
operation of law.77
An award passed by Labour Court or Industrial Tribunal is binding till it is substituted by another award or court
order or court compromise indicating such substitution or it is replaced by another settlement or terminated by either
party under s. 19(6).78
Preclosure Settlement
Page 3 of 3
A preclosure settlement does not have any binding effect upon the company which has taken over the undertaking
under a scheme of amalgamation.
Reference during Pendency of Settlement
Where a material change occurs in the circumstances during the subsistence of the settlement, a reference can be
justifiably made.
Settlements How Long Binding?
It was held by the Calcutta High Court that where in a settlement arrived at by mutual consent or agreement, a
period has been fixed for continuance of the settlement, it is binding until a notice in writing is given terminating the
agreement and until two months have expired from the date of notice of termination. However, the Supreme Court
held that even after termination of award by one of the parties under this sub-section and even after the expiry of
the notice period of two months, a fresh dispute on the same subject-matter can only be canvassed before another
tribunal if there are changes in circumstances. This decision was arrived at by applying the principle analogous to
res judicata and also on the basis that awards are intended to have long-term operation and the giving of notice of
termination of award should not be treated as a mere stage in the prosecution of a prolonged struggle. It has also
been held that, even after the termination of the award by a notice under the sub-section, such termination has not
the effect of extinguishing the rights under the award and that rights and obligations arising out of the award shall
continue even after the notice of termination, and will continue to govern the relations of parties till it is substituted
by a new contract, settlement or award.
73 All India Textile Janta Union v. The Labour Commission, 1994 LLR 203 (P&H—DB).
74 Bank of India v. Presiding Officer, (2002) 1 Lab LJ 232 (SC), Industrial Dispute (Banking Companies) Decision Act,
1955, s. 4, Sastri Award, Desai Award, which remained in force even after the period stated in S. 19(3) and remained to
till the parties intimates the intention to terminate.
75 (1997) II LLJ 631 (SC).
76 Kannanio Properties Ltd. v. State of W.B., (1997) III LLJ 398 (SC).
77 National Textile Corpn. (APKKM) Ltd. v. Sree Yellamma Cotton, Woollen and Silk Mills Staff Assn., (2001) 2 SCC 448
[LNIND 2001 SC 178] : AIR 2001 SC 652 [LNIND 2001 SC 178].
78 T. N. Terminated Full time Temporary LIC Employees Assn. v. LIC, (2015) 9 SCC 62 [LNIND 2015 SC 179].
End of Document
Commencement and Conclusion of Proceedings [Section 20]
Authorities
Learning Objectives
his workmen;
COMMENCEMENT AND CONCLUSION OF PROCEEDINGS [SECTION 20]— Updated On 08-01-2019
A conciliation proceeding is deemed to have commenced on that date on which a notice of strike or lock-out under
section 22 is received by the conciliation officer or on the date of the order referring the dispute to a Board of
conciliation, as the case may be.
A conciliation proceeding is deemed to have concluded—

Page 2 of 2
Commencement and Conclusion of Proceedings [Section 20]
(a) where a settlement is arrived at, when a memorandum of the settlement is signed by the parties to the
dispute;
(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) when a reference is made to a Court, Labour Court, Tribunal or National Tribunal under section 10 during
the pendency of conciliation proceedings.
Proceedings before an arbitrator under section 10A or before a Labour Court, Tribunal or National Tribunal are
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 are to be deemed to have concluded on the date on which the award becomes
enforceable under section 17A.
End of Document
Certain Matters to be kept Confidential [Section 21]
Authorities
Learning Objectives
his workmen;
CERTAIN MATTERS TO BE KEPT CONFIDENTIAL [SECTION 21]— Updated On 08-01-2019
Any information obtained by a conciliation officer, Board, Court, Labour Court, Tribunal or National Tribunal or an
arbitrator in the course of any investigation or inquiry as to a trade union or as to any individual business, cannot be
included in any report or award, which is not available otherwise than through the evidence given before such body,
if the trade union or person, firm or company engaged in individual business, has made a request in writing, that
such information be treated confidential. If the information is such which is given only in evidence before the
authorities under the Act, then the party about whom the information is given may request the authorities to keep
the information confidential. A conciliation officer or any individual member of the Board or Court or the presiding
Page 2 of 2
Certain Matters to be kept Confidential [Section 21]
officer of the Labour Court, Tribunal or National Tribunal or the arbitrator or any person present at the proceeding or
concerned in the proceeding cannot disclose such information. The information can be disclosed only after the
consent in writing of the secretary of the trade union or the person, firm or company engaged in individual business.
It has been held by the Labour Appellate Tribunal that this section does not prevent a party from getting inspection
of any document produced by the opposite party and marked confidential which such opposite party intends to use
in the case. However, this section would not permit the authority to refer to any information given in confidence in its
award or report.
End of Document
Prohibition of Strikes and Lock-outs [Section 22]
Laws > PART I THE INDUSTRIAL DISPUTES ACT, 1947 > Strikes and Lock-Outs
Learning Objectives
his workmen;
CHAPTER 6 Strikes and Lock-Outs
PROHIBITION OF STRIKES AND LOCK-OUTS [SECTION 22]— Updated On 08-01-2019
Strikes and lock-outs are prohibited under section 22. The conditions specified in this section are mandatory and
factual justifiability of a strike will not render an illegal strike as legal. Any person employed in a public utility service
is not allowed to go on strike in breach of contract—
(a) without giving to the employer notice of strike, within six weeks before striking; or
Page 2 of 3
(b) within fourteen days of giving such notice; or
(c) before the expiry of the date of strike specified in any such notice; or
(d) during the pendency of any conciliation proceedings before a conciliation officer and seven days after the
conclusion of such proceedings.
An employer carrying on any public utility service is not allowed to resort to, lock-out any of his workmen—
(a) without giving them notice of lock-out, within six weeks before locking-out; or
(b) within fourteen days of giving such notice; or
(c) before the expiry of the date of lock-out specified in any such notice; or
(d) during the pendency of any conciliation proceedings before a conciliation officer and seven days after the
conclusion of such proceedings.
The notice of lock-out or strike is not necessary where there is already in existence a strike or lock-out in the public
utility service. But the intimation of such lock-out or strike has to be send by the employer on the day on which it is
declared, to the authority specified by the appropriate Government. The authority may be specified either generally
or for a particular area or for a particular class of public utility services.
The notice of strike has to be given by prescribed number of persons to prescribed number of persons in the
prescribed manner. The notice of lock-out also has to be given in the prescribed manner.
If on any day an employer receives from any person employed by him any notice of strike or gives to any person
employed by him any notice of lock-out, within five days of it he has to report to the appropriate Government or
authority prescribed by the Government the number of such notices given or received on that day.
The requirements of s. 22 are mandatory. The date on which the workmen proposed to go on strike should be
specified in the notice. If in the meanwhile the date of strike specified in the notice expires, a fresh notice becomes
necessary and other consequences will follow only from the date of fresh notice. A new notice becomes necessary
even if it is necessitated by the failure of conciliation proceedings which commenced after the notice.1
The object of giving notice of strike is to enable the other party to make amends or to come to terms or redress the
grievance or to approach the authorities to intervene and stop, if it is possible, the threatened action.
Commencement of the action, whether strike or lock-out, earlier to expiry of the period of notice does not prevent
the other party from responding to the requisitions in the notice during the remaining period of notice. Therefore,
illegality attaches only to that period which remained to expire before the commencement of the action. In this case,
strike was commenced 11 hours before the expiry of the strike notice. It was illegal only for that period and legal for
the remaining period.2
1 Mineral Miners’ Union v. Kudremukh Iron Ore Co. Ltd., (1989) 1 Lab LJ 277 (Kant).
Page 3 of 3
2 Maharashtra General Kamgar Union v. Balkrishna Pen P. Ltd., (1989) 1 Lab LJ 319 (Bom).
End of Document
General Prohibition of Strikes and Lock-outs [Section 23]
Learning Objectives
his workmen;
GENERAL PROHIBITION OF STRIKES AND LOCK-OUTS [SECTION 23]— Updated On 08-01-2019
No workman who is employed in any industrial establishment can 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 Conciliation Board and seven days after the
conclusion of such proceedings;3
Page 2 of 3
(b) during the pendency of proceedings before a Labour Court, Tribunal or National Tribunal and two months
after the conclusion of such proceedings; or
(bb) 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 sec. 10A(3A); or
(c) 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 right to form associations or unions is a fundamental right under Article 19(1)(c) of the Constitution of India.
Section 8 of the Trade Unions Act provides for registration of a trade union if all the requirements of the enactment
are fulfilled. The trade unions with sufficient membership strength are able to bargain more effectively with the
management.
This bargaining power would be considerably reduced if the union is not permitted to demonstrate its power by
means of a strike. A strike is only a form of demonstration. The right to demonstrate and, therefore, the right to
strike, is an important weapon in the armoury of workers.4 This right has been recognised by almost all the
democratic countries.5 Though not raised to the high pedestal of a fundamental right, it is recognised as a mode of
redress 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), 10-4(4A), 22 and 23
of the Industrial Disputes Act, 1947. Section 10(3) empowers the appropriate Government to prohibit the
continuance of the strike, if it is in connection with a dispute referred to any of the Authorities created under the Act
for settlement.
Section 10A(4A) confers similar power on the appropriate Government where the industrial dispute which is the
cause of the strike is referred to arbitration under notification issued under section (3A).6
Unless the strike is legal and justified, workmen would not be entitled to wages for the period of strike. A strike in
public utility concern by workmen without resolving the dispute as per the machinery provided under the Act or
under the contract of employment, rulers or regulations is prima facie unjustified. While the legality of the strike is
based on examining whether there is breach of provisions of I.D. Act, the question of justifiability of strike has to be
examined by taking into consideration factors such as service conditions, nature of demands, cause which led to
the strike, urgency of the cause or the demands of the workmen, reason for not resorting to the dispute resolving
machinery under the Act, etc. Such examination would be done by industrial adjudicator and not by the High Court
under Article 226 of the Constitution of India.7
If the strike is only legal but not justified or if the strike is illegal though justified, the workmen are entitled to wages
for the period of strike. In all cases of illegal strike the employer is entitled is deduct wages for the period of strike
and also to take disciplinary action. This is so particularly in public utility concerns. If the strike is legal and justified
the workmen would be entitled to wages for the period of strike. The question as to whether the strike is legal and
justified has to be decided by the industrial adjudicator.8 The Supreme Court further observed in this case that
justifiability of strike or lock-out should be examined on the anvil of the interests which such action tends to affect.
Strike or lock-out is to be resorted to only in unavoidable circumstances and to compel the other party to see the
justness of the demands and is not intended to cause hardship to the society.9 Workers are under a reciprocal duty
not to cause nuisance or physical danger to their employers or others. They must follow the procedure prescribed
by s. 22. But there could not be an injunction in an absolute manner preventing the defendants from going on strike.
That being a fundamental right, could not be restrained.10
It is incorrect to say that unless workmen resort to violence, strike cannot be held to be unjustified. Resort to strike
without recourse to negotiation or conciliation is not justified.11
Page 3 of 3
3 Where the employees of a bank went on strike 7 days before the conclusion of conciliation, the strike was held to be
illegal. The employees were not entitled to wages for the period of the strike, ANZ Grindlays Bank v. S.N. Khatri, (1995)
2 Lab LJ 877 (Bom), following Syndicate Bank v. K. Umesh Naik, (1994) 2 Lab LJ 836. Where a lock out was declared
in response to an illegal strike, the same was held to be justified and workmen not entitled to wages, HAL Employees
Union v. The Presiding Officer, (1996) 2 Lab LJ 930 (SC). Non-resumption of duty by unretrenched workmen was not
sufficient to hold the strike to be illegal, Rajasthan Trade Union Kendra v. J.K. Synthetics Ltd., (1996) 2 Lab LJ 347.
4 Audco India Ltd. v. Audco India Employees Union, (1989) 2 Lab LJ 200 (Mad). The court pointed out that the right
should be exercised peacefully. Workmen have no right to prevent or obstruct other workers, or customers, etc., to
have ingress to or egress from the factory and also to prevent the movement of vehicles and raw materials and finished
goods from and to the factory for the functioning of its working processes. Gathering and picketing outside premises
should be peaceful and lawful and should not violate court orders.
5 See Amulendu Gupta v. LIC, (1982) 2 Lab LJ 352 (Cal), where it was observed that strike is a recognised weapon to
exert force on the employer. It was also held in this case that a writ court is competent to decide on the basis of the
material on record whether the strike was justified or not. Management of Baldev Soap Factory v. Delhi Admn., (1995)
2 Lab LJ 376 (Del), participation in strike does not result in dismissal by itself. The award of the labour court granting six
months pay to each workman in addition to 40% wages from the date of dismissal to the date of award was not illegal.
It could not be interfered with. Ranbaxy Laboratories v. Presiding Officer, Labour Court, Patiala, (1996) 2 Lab LJ 403
(Punj), punishment of dismissal or termination of service should be imposed upon only such workers as had not merely
participated in the illegal strike but had fomented it and had been guilty of violence or doing acts detrimental to the
maintenance of law and order. A distinction has to be drawn between those who were responsible for creating the
trouble and those who merely acted as dumb cattle and did not take any active part in fomenting the trouble; Ranbaxy
Laboratories Ltd. v. Presiding Officer, Labour Court, Patiala, (1996) 2 Lab LJ 403 (Punj); Glaxo Laboratories
Employees Union v. Glaxo India Ltd., (1996) 3 Lab LJ 266 (Guj), finding of the tribunal that the workmen resorted to
unjustified strike and management was justified in asking undertaking could not be interfered with in proceedings under
Art. 227.
6 B.R. Singh v. Union of India, (1989) II LLJ 591 (SC). For an account of the relationship between the right to strike and
the Gandhian method of resistance to what one sincerely considers to be wrong or evil, see Gwalior Rayons Silk Mfg.
(Weaving) Co. Ltd. v. Distt. Collector, Alleppey, (1982) 1 Lab LJ 356 (Ker).
7 (1994) II LLJ 836 (SC).
8 Syndicate Bank v. Umesh Nayak, (1994) II LLJ 836 (SC).
9 Ibid.
10 Standard Chartered Bank v. Chartered Bank Employees Union, (1996) 2 Lab LJ 52 (Del).
11 Hindustan Cables Ltd. v. Labour Court, (1997) III Lab LJ (Suppl) 325 (AP).
End of Document
Illegal Strikes and Lock-outs [Section 24]
Learning Objectives
his workmen;
ILLEGAL STRIKES AND LOCK-OUTS [SECTION 24]— Updated On 08-01-2019
A strike or a lock-out is illegal if—
(i) it is commenced or declared in contravention of section 22 or section 23; or
(ii) it is continued in contravention of an order made under section 10(3) or sec. 10A(4A).
Page 2 of 2
Illegal Strikes and Lock-outs [Section 24]
Where a strike or lock-out in pursuance of an industrial dispute has already commenced and is in existence at the
time of the reference of the dispute to a Board, an arbitrator, Labour Court, Tribunal or National Tribunal, the
continuance of such strike or lock-out shall not be deemed to be illegal provided that such strike or lock-out was not
at its commencement in contravention of the provisions of the Industrial Disputes Act or the continuance thereof
was not prohibited under section 10(3) or section 10A(4A).
A lock-out declared in consequence of an illegal strike or a strike declared in consequence of an illegal lock-out
shall not be deemed to be illegal.
Where a strike is commenced before the expiry of 14 days notice, it will be illegal but only for the unexpired notice
period and, thereafter, the strike would be legal.12
12 Maharashtra General Kamgar Union v. Balkrishna Pen P. Ltd., (1989) 1 Lab LJ 319 (Bom). Following the ratio in
Churakulam Tea Estate v. Its Workmen, (1969) 2 Lab LJ 407, the employees cannot be denied their wages when once
it is found that the strike was neither illegal nor unjust. State Bank’s Staff Union v. SBI, (1991) 1 Lab LJ (Mad—DB).
End of Document
Prohibition of Financial Aid to Illegal Strikes and Lock-outs [Section 25]
Learning Objectives
his workmen;
PROHIBITION OF FINANCIAL AID TO ILLEGAL STRIKES AND LOCK-OUTS [SECTION 25]— Updated On 08-01-
2019
No person shall knowingly expend or apply any money in direct furtherance or support of any illegal strike or lock-
out.
Punishment for Illegal Strikes
Even though the workers have a right to go on strike but it is not their fundamental right. In case of illegal strike the
Page 2 of 2
Prohibition of Financial Aid to Illegal Strikes and Lock-outs [Section 25]
guilty party has to undergo punishment. A distinction has been tried between illegal but justified strikes and illegal
and unjustified-strikes. In Crompton Greaves v. The Workmen, it was held that the workers will be entitled to wages
for the strike period when the strike is legal as well as justified. A strike is legal if it does not violate any provisions of
the Act. A strike cannot be said to be unjustified unless the reasons for it are entirely perverse or unreasonable.
Where as many as 93 of the workmen were retrenched by the company without informing the Labour
Commissioner, before whom the conciliation talks were going on, it was held that the strike cannot be said to be
unjustified.
In a case, a question was raised “whether the employer can dismiss a workman for joining a strike which is not
illegal but unjustified”. It was held that right to strike is recognized by implication. A strike may be unjustified for
many reasons, for example, demands may be unreasonable, or they may be made with extraneous motives. The
strike does not put an end to the employee-employer relationship and an employer cannot discharge a workman for
mere participation in a strike which is not illegal, or in an illegal strike where there was no appropriate provision in
the standing orders.
Where the contract, standing orders or service rules are silent about the question of workers’ entitlement to wages
during the strike period, the management has the power to deduct wages for absence from duty when the absence
is a concerted action on the part of the employees and where the absence is not disputed irrespective of the fact
whether the strike was legal or illegal.
If the strike is illegal, the workmen are not entitled to wages or compensation and they are also liable to punishment
by way of discharge or dismissal. The Supreme Court observed, “It is difficult to understand how a strike in a public
utility service, which is clearly illegal could at the same time be justified. These two conclusions cannot in law exist,
the law has not made any distinction between an illegal strike which may be said to be justified and one which is not
justifiable.” The Supreme Court further observed that in case of illegal strike the question of quantum of punishment
is very important. To decide the quantum of punishment, a distinction has to be made between violent strikers and
peaceful strikers. Violent strikers are to be dealt with more severely and the punishment of discharge, dismissal etc.
can be imposed upon them.
Where the management was prepared to pay bonus as per the Bonus Act and it had also announced the
introduction of a production Bonus Scheme and was actively taking part in the conciliation proceedings, made
certain proposals to representatives of workmen but workmen decided to go on strike, it was held that the strike of
the workmen for demand of ex gratia payment of bonus was not of urgent and serious nature and could not be said
to be justified. Therefore, the workmen were not entitled to any wages for the period of strike.
In another case, the same questions was considered whether the workmen who proceed on strike, whether legal or
illegal are entitled to wages for the period of strike. The Supreme Court held that the cessation or stoppage of work,
whether by the employees or the employer, is detrimental to the production, economy and to the well-being of the
society as a whole. It is for this reason that the industrial legislation while not denying the right of strike to workmen
has tried to regulate it along with the right of the employer to lock-out and has also provided a machinery for
peaceful investigation, settlement, arbitration and adjudication of the dispute between them. When there is a
machinery for settlement of disputes but employees or employers resort to strike or lock-out without having
recourse to the prescribed means strike or lock-out is unjustified and when there is a breach of rules, it would be
illegal. Therefore, the strike or lock-out as a weapon has to be used sparingly for redressal of urgent and pressing
grievance when either no means are available or the available means have failed. The justness or otherwise of the
action of the employer or employees has, therefore, to be examined on the anvil of the interests of the society which
such action tends to affect.
End of Document
Application of Sections 25C to 25E
Laws > PART I THE INDUSTRIAL DISPUTES ACT, 1947 > Lay-Off, Retrenchment, Transfer and
Closure
Learning Objectives
his workmen;
CHAPTER 7 Lay-Off, Retrenchment, Transfer and Closure
The Industrial Disputes Act, 1947 as originally enacted had no provision regarding compensation of payment to the
workmen who were laid-off or retrenched. In 1953, due to closure of textile industries, to prevent unrest among the
workmen due to retrenchment and laying-off the Industrial Disputes (Amendment) Ordinance, 1953 was
promulgated by the President of India. This Ordinance was repealed and replaced by the Industrial Disputes
(Amendment) Act, 1953 which added sections 25-A to 25-J to the original Act. In 1961, again there was an
amendment and new sections 25-FF and 25-FFF were substituted for old section 25-FF. These two sub-sections
were again amended in 1964 and the employers became liable to pay compensation in cases of lay-off,
retrenchment and bona fide transfer or closure of the undertaking with these amendments.
The Chapters VA and VB provide for lay-off, retrenchment, transfer and closure compensation to the workmen
under specified conditions and controls on resort to these measures.
Page 2 of 2
Application of Sections 25C to 25E
APPLICATION OF SECTIONS 25C TO 25E— Updated On 08-01-2019
According to sections 25A(1), sections 25C to 25E provisions regarding lay-off and retrenchment do not apply—
(a) to industrial establishments to which Chapter VB applies; or
(b) to industrial establishments which are of a seasonal character or in which work is performed only
intermittently.
If a question arises whether an industrial establishment is of a seasonal character or whether work is performed
there only intermittently, the decision of the appropriate Government shall be final.
According to the Explanation to section 25A “Industrial establishment”, for the purposes of these sections, means—
(i) a factory as defined in section 2(m) of the Factories Act, 1948; or
(ii) a mine as defined in section 2(j) of the Mines Act, 1952; or
(iii) a plantation as defined in section 2(f) of the Plantations Labour Act, 1951.
Lay off compensation cannot be claimed by workmen in establishments employing less than 50 even under section
10(1) reference.1
In the normal course of things, if there is violation of the provisions of Chapter V-A or of the principles of natural
justice, the remedies provided under the Act should be pursued. The power under Article 226 of the Constitution
should be sparingly used.2
1 Castophene Mfg. Co., 1972 II LLJ 417 (Bom) : 1973 LIC 510.
2 Satish Kumar Bhambani v. Union of India, (1997) 3 Lab LJ (Supp) 442 (Raj).
End of Document
Definition of Continuous Service [Section 25B]
Closure
Learning Objectives
his workmen;
Page 2 of 5
DEFINITION OF CONTINUOUS SERVICE [SECTION 25B]— Updated On 08-01-2019
A workman is said to be in continuous service for a period if he is, for that period, in uninterrupted service. The
uninterrupted service includes service which may be interrupted on account of—
(a) sickness, or
(b) authorised leave, or
(c) an accident, or
(d) a strike which is not illegal, or
(e) a lock-out, or
(f) a cessation of work which is not due to any fault on the part of the workmen.
Where a workman is not in continuous service, for a period of one year or six months, he shall be deemed to be in
continuous service under an employer—
(a) for a period of one year, if he has actually worked under the employer for not less than—
(i) one hundred and ninety days in the case of a workman employed below ground in a mine; and
(ii) two hundred and forty days, in any other case;3
(b) for a period of six months, if the workman, has actually worked under the employer for not less than—
(i) ninety-five days, in the case of workman employed below ground in a mine; and
(ii) one hundred and twenty days, in any other case.
According to the Explanation, the number of days on which a workman has actually worked under an employer are
to include the days on which—
Page 3 of 5
(i) 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 the Act or under any other law applicable to the
industrial establishment;
(ii) 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 a female, she has been on maternity leave; the total period of such maternity leave not
exceeding twelve weeks.4
The burden of proof of continuous service lies on the workmen. Where Labour Court and High Court proceeded on
the basis as if the burden of proving that the concerned employee (workman) had not worked for 240 days in the
year immediately preceding the termination was on the employer it was held untenable by the Supreme Court,5
Some earlier decisions were referred to by the Supreme Court in this case, “in Range Forest Officer v. S.T.
Hadimani, 6 the Tribunal come to the conclusion that the service had been terminated without giving retrenchment
compensation. In arriving at the conclusion that the respondent had worked for 240 days the Tribunal stated that
the burden was on the management to show that there was justification in termination of the service and that the
affidavit of the workman was sufficient to prove that he had worked for 240 days in a year. The Supreme Court
observed that the “Tribunal was not right in placing the onus on the management without first determining on the
basis of cogent evidence that the respondent had worked for more than 240 days in the year preceding his
termination. It was the case of the claimant that he had so worked but this claim was denied by the appellant. It was
then for the claimant to lead evidence to show that he had infact worked for 240 days in the year preceding his
termination. Filing of an affidavit is only his own statement in his favour and that cannot be regarded as sufficient
evidence for any Court or Tribunal to come to the conclusion that a workman had, in fact, worked for 240 days in a
year. No proof of receipt of salary or wages for 240 days or order or record of appointment or engagement for this
period was produced by the workman. On this ground alone, the award is liable to be set aside.”
The abovestated decision was followed in Essen Deinki v. Rajiv Kumar, 7 and in Rajasthan State Ganganagar S.
Mills Ltd. v. State of Rajasthan.8 In Municipal Corporation, Faridabad v. Siri Niwas, 9 it was held by the Supreme
Court that the burden was on workman to show that he was working for more than 240 days in the preceding one
year prior to his alleged retrenchment. This decision of the Supreme Court was referred to in the case of M.P.
Electricity Board v. Hariram 10 citing the following observation of the Supreme Court, “A Court of law even where
provisions of the Indian Evidence Act apply, may presume or may not presume that if a party despite possession of
the best evidence had not produced the same, it would have gone against his contention. The matter, however
would be different where despite direction by a court the evidence is withheld. Presumption as to adverse inference
for non-production of evidence is always optional and one of the factors which is required to be taken in
consideration in the background of the facts involved in the lis. The presumption, thus, is not obligatory because
notwithstanding the intentional non-production, other circumstances may exist upon which such intentional non-
production may be found justifiable on some reasonable ground.”
In Manager, Reserve Bank of India, Bangalore v. S. Mani, 11 Batala Cooperative Sugar Mills Ltd. v. Sowaran Singh,
12 and Surendra Nagar District Panchayat v. Deyabhai Amar Singh, 13 the same position was reiterated. In a more
recent judgement in R.M. Yellatti v. Asst. Executive Engineer, 14 it was held that “analysing the above decision of
this Court, it is clear 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 abovestated judgments,
we find that this court 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 adducing cogent evidence,
both oral and documentary. In cases of termination of daily wage earner, there will be no letter of appointment or
termination. There will also be no receipt or proof of payment. Thus, in most cases the workman (claimant) can only
call upon the employer to produce before the Court the nominal muster roll for the given period, the letter of
appointment or termination, if any, the wage register, the attendance register etc. Drawing of adverse inference
ultimately would depend thereafter on facts of each case. The above decisions, however, make it clear 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 above
Page 4 of 5
judgments further lay down that mere non-production of muster rolls 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.
Lastly, the above judgments lay down the basic principle, namely, that the High Court under Article 226 of the
Constitution will not interfere with the concurrent findings of fact recorded by the Labour Court unless they are
perverse. This exercise will depend upon facts of each case”. This position was again reiterated in ONGC Ltd. v.
Shyamal Chandra Bhowmik. 15
After referring to all the above stated decisions, the Supreme Court held that in the instant case, the Labour Court
and the High Court also lost sight of the fact that the xerox copies of the appellant’s attendance and salary registers
were produced. The respondents had not adduced any evidence except making the oral statement that they had
worked for more than 240 days. The decisions of the Labour Court and the High court were held to be untenable.16
It has been held by the Supreme Court that for labour related matters, terms “calendar year” and “block of twelve
months” are used interchangeably. Therefore, it would be sufficient if it can be established by the worker that he
had rendered service for more than 240 days in a block of twelve months.17
“Actually Worked”
For the purposes of section 25B, a workman can claim that he has actually worked in the eye of law, even though
he may not have worked with hammer, sickle or pen, only if he is paid or is entitled to be paid wages under a
contract of employment or under some provision of law. Otherwise he is not entitled to raise such a claim. The
words “actually worked” must contemplate all those days during which he was in employment of the employer and
for which he had been paid wages either express or implied contract or by compulsion of statute or Standing
Orders.
It is thus clear that Sundays and other paid holidays have to be taken into account for the purpose of reckoning the
total number of days on which the workman could be said to have actually worked. In the present case, the
Panchayat Samiti submitted as breaks were Sundays and paid holidays and no other day and accordingly the
workman worked for requisite days.
3 A person who has worked for 240 days during a period of 12 months has been held entitled to the benefits of section
25F, even though his work was not continuous but interrupted, Digwadih Colliery v. Workmen, (1965) II LLJ 118 (SC);
Gen. Mang. Haryana Roadways v. Rudhan Singh, 2005 III LLJ 4 (SC), whereas employee putting in only 11 months of
service but working for more than 240 days in such period of 11 months is, not held entitled to the benefits of section
25F, Sur Enamel & Stamping Works v. Workmen, (1963) II LLJ 367 (SC). Burden of proof to prove continuous service
of 240 days lies on the workman, Ajnal Cooperative Sugar Mills Ltd. v. Sukhraj Singh, (2009) 17 SCC 326 [LNIND 2007
SC 757].
4 Sundays and other paid holidays should be taken into account for reckoning the number of days on which a workman
is said to have actually worked, Workmen v. American Express International Banking Corpn., (1985) 2 Lab LJ 539
[LNIND 1985 SC 267] (SC). For the purposes of Employees Family Pension Scheme, 1971, reckonable service
includes the period of lay off. Ratnamma v. Regional PF Comm., (1992) 2 Lab LJ 882 (Kant).
5 Surendranagar District Panchayat v. Gangaben Laljibhai, (2006) III LLJ 320 : (2006) 9 SCC 132 [LNIND 2006 SC
455].
7 (2002) III LLJ 1111 : AIR 2003 SC 38 [LNIND 2002 SC 668].

Page 5 of 5
8 (2004) III LLJ 832 : (2004) 8 SCC 161 [LNIND 2004 SC 922].
12 (2006) I LLJ 12 (SC).
13 (2006) I LLJ 424 (SC).
14 (2006) I LLJ 442 : AIR 2006 SC 355.
16 Surendranagar District Panchayat v. Ganaben Laljibhai, (2006) III LLJ 320 (SC); Chief Engineer, Ranjit Sagar Dam v.
Sham Lal, (2006) III LLJ 326 : AIR 2006 SC 2682 [LNIND 2006 SC 454]; Surendranagar Panchayat v. Jethabhai
Pitamberbhai, (2006) I LLJ 268 (SC).
17 HS Rajshekara v. State Bank of Mysore, (2012) 1 SCC 285 [LNINDU 2011 SC 6].
End of Document
Definition of Lay-Off
Closure
Learning Objectives
his workmen;
Page 2 of 5
DEFINITION OF LAY-OFF— Updated On 08-01-2019
Lay-off has been defined by section 2(kkk) as follows:
“Lay-off (with its grammatical variations and cognate expressions) means the failure, refusal or inability of an
employer to give employment to a workman whose name is borne on the muster rolls of his industrial establishment
and who has not been retrenched. The failure, refusal or inability of an employer may be on account of, of any of
the following:—
(a) shortage of coal, power or raw materials, or
(b) the accumulation of stocks, or
(c) the breakdown of machinery, or
(d) natural calamity, or
(e) for any other connected reason.
The explanation attached to the section says that every workman shall be deemed to have been laid off for that day
when following conditions are satisfied:—
(i) his name is borne on the muster rolls of the industrial establishment,
(ii) he presents himself for work at the establishment at the time appointed for the purpose during normal
working hours on any day, and
(iii) he is not given employment by the employer within two hours of his so presenting himself.
If he is not given any such employment even after so presenting himself, he shall not deemed to have been laid off
for the second half of the shift for the day and shall be entitled to full basis wages and dearness allowance for that
part of the day.
Lay-off is a statutory right given under section 25C of the Act. Looking to the whole scheme of Chapter V-A of the
Industrial Disputes Act the power of the employer to lay-off is implicit. It determines not merely the right of the
workman to receive compensation but also the wider rights and liabilities with regard to lay off itself.
Requirements of Lay-off
The essential requirements of a lay-off are:

Page 3 of 5
(a) There must be failure or refusal or inability of the employer to continue employees in his employment.
(b) The employees laid-off must be on the muster-rolls of the establishment on the date of lay-off.
(c) The reasons for deprivation of employment must be shortage of coal, raw material, power or accumulation
of stocks or breakdown of machines or some such reason.
(d) It should not be retrenchment.
“Or for any Other Reason”
It is settled law that it is in the managerial discretion of employer to organise his business in the manner he
considers best. It is not competent for a workman to challenge the propriety of the same so long as the business is
organised in a bonafide manner. While reorganising business if surplus employees are asked to quit, no employer
can be burdened with carrying on with the economic dead waste. Retrenchment has to be accepted as an
inevitable consequence. In this case, all the statutory requirements appeared by overwhelming evidence to be fully
satisfied. The court said that lay off can take place on any one or more reasons specified in the definition and it can
also be on account of “any other reason” not mentioned in section 2(kkk) of the Act. It may be on account of
shortage of coal, power or raw material, or accumulation of stocks or breakdown of machinery or for any other
reason. “Any other reasons” need not necessarily be the same as those specified in the definition. These words
have to be construed to mean reasons similar or analogous to the reasons specified in the definition.
Periods of Lay-off
According to section 2(kkk), lay-off can be only for a short duration and not for a protracted period. Definition of lay-
off contemplates four periods of lay-off:—
(i) Lay-off for a day occurring when work is denied within two hours of his presenting himself for work.
(ii) Lay-off for one-half of day occurring when work is denied in the first half of the shift but the workman is
called on the second half of the shift.
(iii) Lay-off for more than a day but not amounting to retrenchment.
Lay-off compensation is not “wages” under section 2(22) of the Employees State Insurance Act.
Forms and Methods of Lay-off
Lay-off has been termed as stoppage of work under the standing orders. As soon as the work is stopped it is not
necessary that a termination of employment be effected. If the lay-off is for short period and is on account of failure
of plant or a temporary curtailment of production, the employment is treated as continued and the period of lay-off is
treated as compulsory leave either with or without pay. No formal termination of employment is necessary or can be
effected. Where the lay-off is for an indefinitely long period, it may be effected by termination of services after giving
the employees due lay-off notice or notice pay in lieu thereof. It does not terminate employment. The employee
continues on the muster-roll and has to be reinstated on resumption of work.
Duties Cast on the Employer in Connection with a Lay-off

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The following duties cast on the employer in connection with a lay-off:
(a) It must be justified lay-off effected bona-fide and not mala-fide.
(b) The employer must maintain a muster-roll of workmen.
(c) The stoppage of work if resorted to during working hours must be notified by notice put up on the notice
board and must be in accordance with the standing orders.
(d) The period of detention of workmen if stoppage occurs during working hours should not exceed two hours
after the commencement of the stoppage.
(e) If the unemployment caused by lay-off is for short period the unemployment should be treated as
compulsory leave either with or without wages.
(f) If the lay-off is for an indefinitely long period, the services may be terminated by due notice or payment of
notice-pay in lieu of notice.
(g) The employees must be informed of the following things:
(i) whether the employees are to remain on place of work or leave it;
(ii) when work shall be resumed;

(iii) the time when the workers are to present themselves for work during normal working hours. The period
of lay-off should not be left indefinite. Where the workers did not suffer any loss, because of an
irregularity, it was held that the employer could not be penalised.
Where it is not possible to specify the period of lay-off, the worker should be given three weeks’ time to rejoin duty
when work is resumed. Where the workers are called back to work in batches the union should be consulted as
otherwise it may be construed by the union as discrimination.
Workmen laid off as a consequence of strike by other workmen are not entitled to lay-off compensation.
The compensation must be paid at the rate and for period specified in sec. 25-B of the Industrial Disputes Act.
Law Governing Lay-off
Lay-off provisions are given under Chapters V-A and V-B of the Industrial Disputes Act, 1947. By virtue of sec. 25-J,
these provision have an overriding effect on other laws like Industrial Employment (Standing Orders) Act, 1946 or
other state industrial relations laws so far as rights and liabilities are concerned. The rights of the employees under
the following provisions are not affected by the chapter:
(i) any right which a workman has under the Minimum Wages Act, 1948 or any order or notification issued
thereunder; or
Page 5 of 5
(ii) any right under any operative award; or
(iii) any right under any contract with the employer; or
(iv) any provisions concerning any law for the time being in force in any state for the settlement of industrial
disputes.
End of Document
Quantum of Lay-off Compensation [Section 25(C)]
Closure
Learning Objectives
his workmen;
Page 2 of 3
QUANTUM OF LAY-OFF COMPENSATION [SECTION 25(C)]— Updated On 08-01-2019
The rules regulating lay-off compensation and payments are as under:
(1) If the lay-off occurs during working hours and results in the detention of the workmen not exceeding one
hour the workmen so detained shall not be paid for the period of detention. [Standing Orders 12(2)].
(2) If the period of detention exceeds one hour, the workmen so detained shall be paid wages for the whole of
the time during which they are detained as a result of stoppage. [Standing Orders 12(2)].
(3) Where the workman during the period of twelve months is laid-off, he shall be paid by the employer for all
days during which he is so-laid-off, except for such weekly holidays as may intervene compensation at the
rate of fifty percent of the total of the basic wages and dearness allowance that would have been payable
to him had he not been so laid off.
Prior to the amendment there was a lacuna in section 25-C of the Act to the effect that if lay-off was for an unbroken
period of a whole year the employees concerned would get compensation for 45 days only but if it was for broken
periods they might receive more compensation. Under this section lay-off is payable for a period which may extend
to any length of time and is not limited to the period of 45 days mentioned in the proviso. A single lay-off for a period
exceeding 45 days cannot be brought within proviso (b) to sec. 25-C. In such a case only proviso (a) to the section
will apply and the laid-off workmen will be entitled to compensation only for 45 days. Where there was one
continuous lay-off for the entire period, proviso (b) could have no application. But some tribunals have held to the
contrary which view, however, does not seem to be not correct.
Section 25-C was re-enacted by Industrial Disputes Act, 1965 which can be divided into following points:—
(1) whenever a workman (other than a badli workman or a casual workman),
(2) whose name is borne on the muster rolls of an industrial establishment, and
(3) who has completed not less than one year of continuous service under an employer whether continuously
or intermittently, is laid off,
(4) except for such weekly holidays as may intervene,
(5) he shall be paid by the employer for all days during which he is so laid-off, compensation equal to fifty
percent of the total of the basic wages and dearness allowance,
(6) that would have been payable to him had he not been so laid off.
If during any period of twelve months, a workman is so laid off for more than forty-five days, no such compensation
shall be payable in respect of any period of the lay-off after the expiry of the first forty-five days, if there is an
agreement to that effect between the workman and the employer.
Page 3 of 3
It shall be lawful for the employer in the abovestated case to retrench the workman in accordance with the
provisions of section 25F at any time after the expiry of the first forty-five days of the lay-off. When he retrenches
the workman, any compensation paid to the workman for having been laid-off during the preceeding 12 months may
be set-off against the compensation payable for retrenchment.30
When lay-off has been imposed by the management in an establishment or in any department thereof, the entire
body of workmen working there may be affected by lay-off. Therefore, their grievance in connection with lay-off
compensation pertaining to the period of lay-off would not be necessarily an individual grievance but would be
grievance of the class of workmen as a whole affected by such lay-off. If there is a binding settlement embodying an
agreement on behalf a class of workmen through their union in connection with lay-off compensation, it would
obviously be binding on all the members of the union and if such settlement based on agreement is arrived at
during conciliation proceedings it would be binding to the entire class of workmen covered by industrial dispute
regarding lay-off compensation. The individual workman can raise his grievance under s. 25-C only if statutory right
of lay-off under s. 25-C is not hedged in by any binding effect of an agreement entered into by its own union with
the management, whether in or outside conciliation proceedings or even by other unions that may arrive at such
settlement during the course of conciliation proceedings. Then only individual workman can have full play under s.
25-C for indicating his right of lay-off compensation.31
“Badli Workman”
Badli workman” means a workman who is employed in an industrial establishment in the place of another workman
whose name is borne on the muster rolls of the establishment. But he ceases to be regarded as “badli workman” if
he completes one year of the continuous service in the establishment.
30 Deduction of lay-off compensation from the amount payable under retrenchment compensation is not permissible,
Ramasamuz Narsing Upadhaya v. Vinubhai M. Mitra, (1982) 2 Lab LJ 186 (Bom). Lay-off compensation under section
25C must be considered as salary under the Bonus Act, 1965, (1993) 3 Lab LJ (Supp) 118 (Ker). Sweeper on daily
wages who did not work for statutory period of 240 days was held not entitled to reinstatement with benefits, HUDA v.
Jagmal Singh, (2006) III LLJ 152 : (2006) 5 SCC 764 [LNIND 2006 SC 510].
31 P. Virudhachalam v. Lotus Mills, (1998) I LLJ 389 (SC).
End of Document
Retrenchment [Section 2(oo)]
Closure
Learning Objectives
his workmen;
Page 2 of 5
RETRENCHMENT [SECTION 2(OO)]— Updated On 08-01-2019
“Retrenchment” means—
(i) the termination by the employer of the service of a workman for any reason whatsoever,
(ii) otherwise than as a punishment inflicted by way of disciplinary action,

(iii) but retrenchment 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 the non-renewal of the contract of employment
between the employer and the workman on its expiry or if such contract is terminated under a
stipulation in that behalf contained in it; or
(c) termination of the service of a workman on the ground of continued ill-health.33
Retrenchment means discharge of surplus labour or staff in a continuing industry. It means the removal of “the dead
weight of uneconomic surplus.” It is not necessary that removal of surplus must only be when the establishment
runs in losses. It may operate at any level of profits. The legislature has used the expression ‘for any reason
whatsoever’ which means: “It does not matter why you are discharging the surplus if the other requirements of the
definition are fulfilled, then it is retrenchment.”34 It has been held by the Supreme Court that every termination would
amount to retrenchment.35
The definition of retrenchment in section 2(oo) does not make any difference between regular and temporary
appointment or appointment on daily wage basis or appointment of a person not possessing requisite
qualifications.36
The expression “retrenchment” is not to be understood in its narrow, natural and contextual meaning but is to be
understood in its wider literal meaning to include termination of service of workmen for any reason whatsoever.37
Where the appointment of a workman is made for a fixed period, termination of his services in accordance with the
terms of such appointment does not become illegal and the provisions of section 25F will not come into operation.38
All terminations are retrenchment, unless they fall within any of the exceptions mentioned in section 2(oo). The
termination can be struck down for non-compliance with section 25F of the Act.39 Section 25F applies to
probationers also.
Page 3 of 5
Where a seasonal worker ceases to do work owning to closure of the season, such cessation of work will not
amount to retrenchment under the section 25F.40
The expression ‘retrenchment’ connotes terminating the workman’s services for any reason whatsoever, other than
those expressly excluded in section 2(oo). The work should not be understood in its conventional exposition but in
its contemporaneous exposition, giving it a wider meaning so as to include termination for any reason whatsoever.41
What does not Amount to Retrenchment
The definition of retrenchment given in section 2(oo) of the Industrial Disputes Act makes it clear that retrenchment
is a type of termination of service and as such cases which would not amount to termination would be out of the
scope of retrenchment. Termination of employment contract by efflux of time or expiry of contracted period would
not be retrenchment. Termination on bona fide closure of business would also be no retrenchment. Unless
excluded, termination for any reason amounts to retrenchment.
The definition specially includes the following cases of terminations:
(a) Termination of service as a punishment inflicted by way of disciplinary action, e.g., discharge for
inefficiency, or suspension for dishonesty, or termination for behaviour prejudicial to the concern.
(b) Voluntary retirement of workmen where they left their services on receiving notices of retrenchment and did
not attend work during notice period.
(bb) Terminations under expressly stipulated contracts or non-renewal of contracts of employment on expiry of
such contract.
(c) Retirement on reaching superannuation age. Two requirements must be complied with in order to bring a
case under this clause: (a) there must be a stipulation on the point of retirement in the contract of
employment; and (b) the stipulation must be in regard to the age of superannuation.
(d) Termination of service on the ground of continued ill-health, e.g., an employee suffering from incipient
cataract and senile debility, physical unfitness, infirmity on account of old age resulting in incapacity for
work, or on ground of leprosy for sometime. Non-absorption of workmen going on strike is also not
retrenchment.
Where a worker suffers an accident during the course of employment rendering him unfit for job, termination of
services on that ground would be illegal and in contravention of section 25F of the Act.
Even where the management terminates the services of a workman, under the terms of the Standing Orders, such
termination will be held illegal under section 25F of the Act if the order is passed without conducting a domestic
enquiry or giving the workman an opportunity to set out his case.
Where a workman is appointed against leave vacancy, termination of such workman’s services after the return of
the permanent worker to duty, does not constitute retrenchment under section 25F, unless the temporary worker
had completed two hundred and forty days of service during the twelve months period.
Where a project undertaken by an employer is not of perennial nature, and the project is likely to be finished after
Page 4 of 5
some time, it cannot be held that giving postings to an employee on a tenure basis amounts to unfair labour
practice. Such action of the employer does not fall within the ambit of section 2(oo) (bb) of Act.
Discharge on account of closure of undertaking is not a retrenchment.
Position of Casual Employee
A casual worker employed for a long period of time does not automatically become a permanent employee. Having
regard to the long period of employment of a casual employee, he may claim to be treated on a permanent basis on
a permanent post. The mere fact that the provisions of section 25F have to be complied with in respect of casual
employee does not necessarily mean that such casual employee automatically becomes a permanent employee.
The possibility of a casual workman not being given work is implicit in the casual nature of his employment. The
concept of lay-off would be inapplicable to the case of a casual workman and this has been recognised under
section 25C of the Act, where the casual workman has been excluded specifically from the category of workmen
entitled to lay off compensation. Casual employees, apart from being a separate category under the standing
orders, even for the purposes of the Act they cannot be treated as if they are permanent employees. In the case of
casual workmen there is the possibility of a break in employment and non-provision of work for a given period.
There is nothing in definition in section 2(oo) to suggest the exclusion of temporary workers from the definition.
They are included in the definition to attract the provisions of section 25H.
The Supreme Court has been of the view that disengagement of temporary employees working on daily wages
could not be construed as retrenchment.
The ordinary principle of grant of reinstatement with full wages when termination is found to be illegal cannot be
applied mechanically in all cases. Such a principle may be applied where services of a regular or permanent
workmen are terminated illegally and/or mala fide and/or by way of victimization, unfair labour practices etc.
Monetary compensation given to daily-wagers when their services were terminated ille5g0 ally for some procedural
defects was held to be sufficient by the Supreme Court.
33 Delhi Cloth & General Mills Ltd., (1978) 1 Lab LJ 1 [LNIND 1977 SC 280] and L. Rodert D’Souza v. Executive
Engineer, Southern Rly., (1982) 1 Lab LJ 330 (SC). Where the termination of service does not fall in any of the
excluded categories, it would be ipso facto retrenchment Gammon India Ltd. v. Niranjan Das, (1984) 1 Lab LJ 233
[LNIND 1983 SC 361] (SC). Termination of the service of an employee who overstayed his leave period was held to be
retrenchment. Hemraj v. State Industrial Court, Indore, (1994) 3 Lab LJ (Suppl) 327 (MP); MPKKM Panchayat (HMS) v.
Western Coal Fields Ltd., (1999) 1 Lab LJ 772 (MP); Termination of probation on the ground of unsuitability is
retrenchment, Management of Karnataka State Road Transport Corpn. v. Boralah, M., (1984) 1 Lab LJ 110 (SC);
Hutchiah v. Karnataka State Road Transport Corpn., (1983) 1 Lab LJ 30 (Kant). A person engaged against leave
vacancy for more than 240 days and paid salary on monthly basis, termination of her service was held to be
retrenchment, award of reinstatement with full back wages was upheld as valid, Administrator, MC v. Presiding Officer,
Labour Court, (1999) 2 Lab LJ 14 (P&H—DB); Termination of services on ground of medical unfitness is not
retrenchment, Hindustan Industries Ltd. v. Labour Court, (2002) IV LLJ (Suppl) 837 SC. Defective or sub-normal vision
or eye-sight in case of bus drivers would be covered by “ill health” under section 2(oo)(c), Anand Bihari v. Rajasthan
SRTC, (1998) II LLJ (Suppl) 1209 (SC).
34 Hari prasad Shiv Shanker v. A.D. Divelkar, (1957) SCR 57 (SC).
35 State Bank v. N. Sundaramony, (1975) I LLJ 453.
36 Srirangam Cooperative Urban Bank Ltd. v. Presiding Officer, Labour Court, Madurai, (1996) 2 Lab LJ 216 (Mad—DB).
Page 5 of 5
37 Punjab Development & Reclamation Corpn. Ltd. v. Presiding Officer, Labour Court, (1990) II LLJ (SC).
38 State of Rajasthan v. Rameshwar Lal Gahlot, 1996 I LLJ 888 (SC). Where employment of persons under welfare
scheme (Jawahar Rozgar Yojna) on daily wages and temporary basis was co-terminus with the scheme itself,
termination was held to be no retrenchment and no relief of reinstatement was granted for non-compliance under
section 25-F; Surendra Kumar Sharma v. Vikash Adhikari, (2003) II LLJ 1094 (SC).
39 Rajesh Kumar v. State of M.P., (1993) III LLJ 249 (MP).
40 Morinda Co-op. Sugar Mills Ltd. v. Ram Kishan, (1996) I LLJ 870 (SC).
41 Punjab Land Development & Reclamation Corpn. Ltd. v. Presiding Officer, (1990) II LLJ (SC). Termination without
complying with the requirements of section 25F is void ab initio. The affected employee would be entitled to
reinstatement with full back wages and allowances, Narotam Chopra v. Labour Court, (1994) 3 Lab LJ (Supp) 252
(SC); P.R. Ramchandran v. T.N. Water Supply & Drainage Board, (1996) 1 Lab LJ 823 (Mad). See Municipal
Corporation of Delhi v. Prem Chand Gupta, (2000) 10 SCC 115 [LNIND 1999 SC 1851] : (2000) 1 Lab LJ 533,
retrenchment before the amendment of 1984 out governed by the present provisions. Where employer was not able to
prove conditions rendering termination of service to be not one of retrenchment, termination was held to be
retrenchment and workman concerned where held entitled to notice and compensation as per section 25-FFF, as it was
one of closing down on account of completion of work, S.M. Nilajkar v. Telecom District Manager, (2003) II LLJ 359 :
AIR 2003 SC 3553.
End of Document
Termination or Non-Renewal in accordance with Contract [Section 2(oo)]
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Learning Objectives
his workmen;
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TERMINATION OR NON-RENEWAL IN ACCORDANCE WITH CONTRACT [SECTION 2(OO)]— Updated On 08-01-

2019
The Supreme Court observed in State Bank of India v. N. Sundramoney, 51 that the termination contemplated in
section 2(oo) embraces not merely the act of termination by the employer but the fact of termination howsoever
produced. In every case the court has to scrutinise all the facts, the nature and terms of employment, duties of
employee to see whether there is arbitrariness in the exercise of power, and if it is so, to infer an unfair labour
practice.52
The abovestated observation of the Supreme Court was relied upon in a case and it was held that the contract of
employment should be fair, proper and bona fide. The Labour Court has jurisdiction to examine each and every
case and protect workmen against exploitation by employers.53 Where certain persons were appointed for three
months till regularly selected candidates joined, termination of their appointment on the expiry of the stipulated time
was held to be not illegal.54 The sub-clause has been held to be constitutionally valid.55
Termination of service of workmen appointed for specific purpose and period after the expiry of the period and
fulfilment of purpose does not amount to retrenchment.56 Where service was terminated before expiry of probation
period but terms of employment stipulated right to terminate training without assigning reason, it was held that in
such circumstances the issue of notice before terminating did not arise.57
In a case, a person engaged as Junior Technician on ad hoc basis for 89 days was reappointed after gap of one or
two days, it was held termination and reappointment on regular basis was not bonafide but with a view to defeat her
rights under section 25-F, consequently section 2(oo) was not attracted.58
The Supreme Court has held that re-employment of retrenched casual labourers is to be considered for appointing
on daily wages in preference to others waiving age bar, if necessary.59
Retrenchment Distinguished from Other Concepts
In retrenchment the business is continued and only a section or group of workers is discharged but in closure there
is a discharge of all the employees. In the former the business or industry continues while in the latter it does not.
Compared with strike and lockout, in retrenchment no employment relationship subsists while in strike and lockout
in continues. Retrenchment is distinct from lay-off in as much as in lay-off, the employment relationship is not
terminated but merely suspended. Retrenchment is different from gratuity and other retirement benefits also.
Gratuity or pension or provident fund is a retiral benefit given to an employee by reason of length of service.
51 (1976) 1 Lab LJ 478 [LNIND 1976 SC 13] (SC).
52 Bhikhu Ram v. Presiding Officer, Industrial Tribunal-cum-Labour Court, Rohtak, (1996) 3 Lab LJ (Supp) 1126 (P&H).
53 Dilip Hanumant Rao Shirke v. Zilla Parishad, (1990) 1 Lab LJ 445 (Bom).
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54 State of Rajasthan v. Rameshwar Lal Gahlot, (1996) 1 Lab LJ 888 (SC). Termination in terms of stipulation in contract
of employment, not retrenchment, Municipal Council, Samrala v. Raj Kumar, (2006) II LLJ 553 : (2006) 3 SCC 81.
55 Terminated Full Time Temporary LIC Employees Welfare Assn. v. Senior Divisional Manager LIC, (1993) 1 Lab LJ
1030 (Mad—FB).
56 Haryana State F.C.C.W. Store Ltd. v. Ram Niwas, (2002) II LLJ 1153 : AIR 2002 SC 2495 [LNIND 2002 SC 409].
57 Kalyani Sharp India Ltd. v. Labour Court, (2001) I LLJ 1346 : AIR 2002 SC 300.
58 Haryana State Electronics Development Corporation Ltd. v. Mamni, (2006) II LLJ 744 : AIR 2006 SC 2427 [LNIND
2006 SC 338].
59 Municipal Corpn. of Bilaspur v. Veer Singh Rajput, (1998) 2 Lab LJ 627 (SC).
End of Document
Conditions Precedent to Retrenchment of Workmen [Section 25F]
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Learning Objectives
his workmen;
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CONDITIONS PRECEDENT TO RETRENCHMENT OF WORKMEN [SECTION 25F]— Updated On 08-01-2019
According to section 25F, no workman employed in any industry who has been in continuous service for not less
than one year60 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 fifteen
days’ average pay [for every completed year of continuous service] or any part thereof in excess of six
months;61 and
(c) notice in the prescribed manner is served on the appropriate Government, or such authority as may be
specified by the appropriate Government by notification in the Official Gazette.62
Before effecting a retrenchment the employer must comply with the following conditions:
(a) The retrenchment must be by termination of employment.63
(b) The employee must be given one months notice in writing indicating the reasons for retrenchment and
retrenchment must be effected after expiry of period of notice or the employee should be given wages for
the notice period in lieu of such notice [section 25F(a)].64 The notice must specify a certain date for
retrenchment, otherwise a mere writing would not be a notice.65
(c) The employee should be paid at the time of retrenchment, compensation equivalent to fifteen days average
pay for every completed year of service or any part thereof in excess of six months. Having accepted the
notice pay and compensation, the workman cannot recede from the position. It is a question of fact
whether the employee accepted the propriety of retrenchment and on that basis accepted the payment.
Where the employee, after getting cheque did not encash it and protested immediately, it was held that no
estoppel would operate.66 Notice and tender must be part of the same transaction. Where workman were
asked to collect dues on the same day, it was held to be a sufficient compliance.67
(d) The employer must serve on the appropriate Government a notice in the prescribed from (From P for
Central Government) by registered post in the manner laid down in Rule 76 of the Industrial Disputes
(Central) Rules, 1957. In the Hospital Mazdoor Sabha, 68 case it was held that this being a condition
precedent retrenchment would be illegal but in Bombay Union of Journalists v. State of Bombay, 69 the
High Court modified the view and held that it was not a condition precedent as under Rule 80 of the
Bombay Industrial Disputes Rules notice to Government may be sent within seven days of retrenchment.
Under the Madras Industrial Disputes Rules, the notice of retrenchment to be given by an employer shall
be in Form “R” and such notice shall be served on the State Government by registered post and where
notice is given to the workman, the notice shall be sent to the State Government not less than twenty-one
days before the date of retrenchment and where no notice is given to the workmen and they are paid one
month’s wages in lieu thereof, the notice shall be sent to the State Government on the date on which such
wages are paid. Copies of the notices shall also be sent by registered post to the Conciliation Officer
having jurisdiction over the area and to the Commissioner of Labour, Madras. These requirements are of
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mandatory nature and if the requirements are not complied with, the retrenchment cannot be treated as a
valid retrenchment and it has to be held to be invalid, illegal, and inoperative. The workmen will be deemed
to be in employment. Notice as required by change in service conditions under section 9A of the Act does
not become necessary in the case of retrenchment.70
The principle of 26 working days followed in payment of gratuity cannot be imported for determining retrenchment
compensation under section 25-F of I.D. Act.71
An order of retrenchment passed in violation of section 25-F can be set aside but an award of reinstatement cannot
be passed for daily wagers. Award of compensation of Rs. 2 lakhs each to daily wagers was found to be
appropriate by the Supreme Court and the order of reinstatement was set aside.72
Non-compliance of section 25-F and its clauses (a) and (b) will render retrenchment a nullity. The employer is under
the burden to provide tangible evidence of compliance with the section. Where the employer could not produce
evidence showing that the compensation was offered on the day of retrenchment and also could not explain the
delay in sending demand draft after three months of termination of service, it was held by the Supreme Court that
the employer had failed to prove the compliance.73
It is sufficient if the workman can prove that the employer violated the rule of ‘last come and first go’ principle
without any tangible reason.74 It is not necessary for him to prove that he worked for 240 days in continuous
service.75
Employers’ Obligations and Duties in Retrenching Employees
(i) Maintenance of Muster Roll.—The employer must maintain a muster- roll as required under section 25-D of
the ID Act.
(ii) Seniority-list.—Rule 77 of the Industrial Disputes (Central) Rules, 1957 requires that the employer should
prepare a list of all workmen in the particular category from which the retrenchment is contemplated arranged
according to seniority of their service in the category. A copy of this list should be affixed on a notice board at a
conspicuous place in the premises of the industrial establishment at least seven days before the actual date of
retrenchment.
(iii) Rule 77 Mandatory—Requirement of Rule 77 is mandatory and its violation renders retrenchment illegal.
(iv) Compliance with Section 25G—The retrenchment should be in compliance with the statutory provisions in
section 25-G. The normal rule is to retrench first of all the junior-most employees in a particular category. If the
employer has sufficient reasons to depart from this rule, only then it may be departed from and reasons for such
departure must be recorded.
(v) Notice of Change under Section 42(1) of the Bombay Industrial Relations Act—Retrenchment of
permanent employees falls within item I of Sch. II of the Bombay Industrial Relations Act as it would result in
reduction of employees. A notice of change under section 42(1) of the Act would therefore be necessary before
effecting retrenchment.
(vi) Re-employment—The retrenched employees have a statutory right of re-employment if the employer
proposes to take into employment in future any persons and the retrenched staff has a right of preference over
other persons. Section 25-H gives statutory sanction to this rule. Under rule 78 of the Industrial Disputes (Central)
Rules, the employer has to comply with requisites mentioned in the rule. This right is given to citizens of India only.
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Notice of Retrenchment
An offer to the employee to collect is dues without specifying whether the amount offered included the amount due
under section 25F was held to be invalid. The termination of service was also held to be illegal. The employee was
not employed by the employer during the past-25 years, an order of reinstatement was held to be not proper.
Reasonable compensation was ordered to be paid in lieu of back wages and reinstatement.
60 Artificial breaks which were not due to the fault of the workman amounted to colourable exercise of power,
retrenchment, Ashok Kumar v. U.P. Leather Development & Marketing Corpn., (1998) 1 Lab LJ 789 (All). Termination
of service for loss of confidence, retrenchment, Ramchandra Vithuji Kothare v. Industrial Court, (1986) 1 Lab LJ 363
(Bom). Where before the commencement of an illegal strike 240 days were completed, workmen would be entitled
compensation, (1986) 1 Lab LJ 34 (SC). Worked for three years with one or two days breaks, held requirement
complied with, compensation necessary, Krishan Kumar Dubey v. U.P. State Food & Essential Commodities Corpn.,
(1994) 3 Lab LJ 254 (SC). Workman who had continuously worked for more than 240 days in a year was held entitled
to protection and the same could not be denied on the ground that he was a daily rated wager, Rattan Singh v. Union of
India, (1998) 3 Lab LJ (Supp) 714 (SC); Conditions precedent to retrenchment of workmen are in parimateria with s. 6N
of U.P. Industrial Disputes Act, 1947, Bhuvnesh Kumar Dwivedi v. Hindalco Industries Ltd., (2014) 11 SCC 85.
61 While working out monetary benefit with regard to the arrears of back wages and other monetary benefits, credit will
have to be given for what the employee has received as and by way of salary and all other allowances, while re-
employed afresh, Hari Mohan Rastogi v. Labour Court, (1984) 1 Lab LJ 32 (SC).
62 Where no notice served to the State Government, employee was directed to be reinstated, Raj Kumar v. Director of
Education, AIR 2016 SC 1855 [LNIND 2016 SC 164].
63 See Narsingh Pal v. Union of India, (2000) 3 SCC 588 [LNIND 2000 SC 541] : AIR 2000 SC 1401 [LNIND 2000 SC
541]: (2000) 1 Lab LJ 1388, accceptance of retrenchment compensation cannot justify an invalid order of termination.
64 A casual employee who had completed 240 days of service in preceding 12 months cannot be terminated without a
notice or compensation in lieu of notice, Ramesh Kumar v. State of Haryana, (2010) 2 SCC 543 [LNIND 2010 SC 60];
Where no evidence produced by the appellant company to prove that one month’s salary was paid in lieu of notice and
no notice was served on the State government, retrenchment was held to be invalid, Mackinnon Mackenzie & Co. Ltd.
v. Employees Union, (2015) 4 SCC 544 [LNIND 2015 SC 120]; Non-compliance of conditions of s. 25F, 25 G and 25 H
renders the termination order void ab initio, Gauri Shanker v. State of Rajasthan, (2015) 12 SCC 754 [LNINDU 2015
SC 70]; Where order of retrenchment held invalid, relief of reinstatement with full back wages was restored, Ajaypal
Singh v. Haryana warehousing Corpn, (2015) 6 SCC 321 [LNINDORD 2014 SC 19179].
65 B.C. Swami, Re, (1973) LIC 742 : (1973) II LLJ 589; Where reinstatement of workman without back wages was
ordered in case of non-compliance with notice of termination and payment of retrenchment compensation, the decision
was upheld, Director of Horticulture v. H.A. Kumar, (2014) 13 SCC 746 [LNINDORD 2013 SC 2147].
66 Film Distributors Employees Association v. Metro Goldwyr, (1959) I LLJ 211.
67 Davengere Cotton Mills, Re, (1973) I LLJ 306 : 1973 LIC, other decisions to the same effect, Straw Board Mfg. Co’s,
(1962) I LLJ 420; Management of Kodumudi Growers Coop Bank Ltd. v. Presiding Officer, Labour Court, Coimbatore,
(1999) 1 Lab LJ 497 (Mad—DB), order of retrenchment and payment of compensation should be made simultaneously.
Merely asking the worker to come and collect one months wages in lieu of notice from office does not satisfy the
statutory requirement. Tender of retrenchment compensation should be for precise amount and make simultaneous
with termination of service. Failure to tender retrenchment compensation alongwith the order of termination would be
violative of section 25F. Payment of compensation is condition precedent for valid retrenchment. Retrenchment
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compensation is not required to be paid or tendered along with notice, it has to paid only before or at time of
retrenchment, Promod Jha v. State of Bihar, (2003) II LLJ 159 (SC).
68 (1957) I LLJ 55.
69 (1961) II LLJ 727 (HC).
70 R.B. Sewak Ram Maternity Hospital v. Presiding Officer, Labour Court, (2000) 10 SCC 490, nurses dealt with because
of non-registration under an Act. The termination was in violation of section 25F. The nurses were directed to obtain the
necessary registration.
71 Guru Jambheshwar Univeristy, Hissar v. Dharam Pal, (2007) I LLJ 1006 (SC).
72 BSNL v. Man Singh, (2012) 1 SCC 558 [LNIND 2011 SC 2551].
73 Anoop Sharma v. Public Health Division, Haryana, (2010) 2 SCC 497 [LNINDORD 2010 SC 218].
74 Violation of ‘last come and first go’ rule has to be pleaded and proved by retrenched workman, Ajaypal Singh v.
Haryana Warehousing Corpn, (2015) 6 SCC 321 [LNINDORD 2014 SC 19179].
75 Harjinder Singh v. Punjab State Warehousing Corporation, (2010) 3 SCC 192 [LNINDORD 2010 SC 252].
End of Document
Re-employment of Retrenched Workmen [Section 25H]
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Learning Objectives
his workmen;
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RE-EMPLOYMENT OF RETRENCHED WORKMEN [SECTION 25H]— Updated On 08-01-2019
This section provides for preferential reemployment of retrenched workmen. The section comes into play when
there is a proposal to employ any persons after a retrenchment. The employer has to give an opportunity in the
prescribed manner to such of the retrenched workers who are the citizens of India. This is to enable them to offer
themselves for re-employment. Those who so offer themselves have to be taken in preference to other persons.78
Rules 77 and 78 of the Central Rules prescribe the mode of re-employment.
At least ten days before the date on which vacancies are to be filled up, the employer shall arrange for the display
on a notice board in a conspicuous place in the premises of the industrial establishment details of those vacancies
and shall also give intimation of those vacancies by registered post to every one of all the retrenched workmen
eligible to be considered for the purpose, at the address given by him at the time of retrenchment or at any time
thereafter.79
Where the number of such vacancies is less than the number of retrenched workmen, it shall be sufficient if
intimation is given by the employer individually to the seniormost retrenched workmen in the list referred to in Rule
77, the number of such seniormost workmen being double the number of such vacancies.
Where the vacancy is of duration of less than one month there shall be no obligation on the employer to send
intimation of such vacancy to individual retrenched workmen.
If a retrenched workmen, without sufficient reason being shown in writing to the employer, does not offer himself for
re-employment on the date or dates specified in the intimation sent to him by the employer under the sub-rule, the
employer may not intimate to him the vacancies that may be filled on any subsequent occasion.
Immediately after complying with the provisions of the rule stated above, the employer shall also inform the trade
unions connected with the industrial establishment, of the number of vacancies to be filled and names of the
retrenched workmen to whom intimation has been sent under the sub-rule.
The provisions of the sub-rule need not be complied with by the employer in any case where intimation is sent to
every one of the workmen mentioned in the list prepared under Rule 77.80
The interplay of these rules with the rest of the provisions of the Act was the subject matter of comment in the
decision of the Supreme Court in Central Bank of India v. S. Satyam. 81 The benefit of application of section 25F
can be claimed by a workman only if he has been in continuous service for not less than one year as defined in
section 25B. Any other retrenched workman cannot avail the benefit of section 25F. Section 25G prescribes the
procedure for retrenchment and ordinarily applies the principle of “last come first go.” Section 25H then provides for
re-employment of retrenched workmen.82 Rule 77 requires the employer to maintain a seniority list of workmen in
that particular category from which retrenchment is contemplated. The category of workmen to whom section 25F
applies is distinct from those to whom it is inapplicable. Rule 78 speaks of the retrenched workmen who are eligible
for filling vacancies and here also those falling in the category of section 25F are entitled to be placed higher than
those who do not fall in that category. A workman falling in the lower category because of not being covered by
section 25F can claim consideration for re-employment only if an eligible workman above him in the seniority list is
not available.
The plain language of section 25H speaks only of re-employment of “retrenched workmen”. Section 25F does not
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restrict the meaning of retrenchment as given in section 2(oo) but qualifies the category by prescribing a certain
working period. Chapter V-A deals with all retrenchment while section 25F confines itself to a restricted category.
Section 25G prescribes the principle of retrenchment of “last come first go” and is not confined only to workmen
fulfilling the requirement of section 25F.
Section 25H is couched in a wide language and is capable of application to all retrenched workers and not merely
to those covered by section 25F. The provision for re-employment of retrenched workmen merely gives preference
to a retrenched workman in the matter of re-employment over other persons. It is enacted for the benefit of
retrenched workmen and there is no reason to restrict the ordinary meaning which promotes the object of the
enactment without causing any prejudice to a better placed retrenched workman.
Where fresh agreement was entered into between management and workmen after termination of service on
closure of Dalmia Dadri Cement, it was held that benefits of increments and high salary could not be claimed as a
matter of right, for service rendered in erstwhile employment upon fresh appointment.83
Order of reinstatement was held to be not justified after 25 years of retrenchment in case of a worker who was
engaged as a daily wa8g4er and worked intermittently for a period of seven years before his retrenchment.84
78 The provision had no retrospective application, Rai Sahib Ramdayal Ghasiram Oil Mills v. Labour Appellate Tribunal,
AIR 1964 SC 567 [LNIND 1962 SC 415]: (1963) 2 Lab LJ 65 [LNIND 1962 SC 415].
79 In Association of Chemical Workers v. A.T. Alaspur, (1998) 3 Lab LJ (Suppl) 800 (SC), directions were issued that on
the abolition of the contract labour system, workers who possessed qualifications should be absorbed in future
vacancies.
80 Rule 78, The Industrial Disputes (Central) Rules, 1957.
81 (1996) 2 Lab LJ 820 (SC).
82 The contents of the provisions have been stated above.
83 Cement Corporation of India v. P.O. Industrial Tribunal-cum-Labour Court, (2001) II LLJ 231 : (2002) 94 FLR 455.
84 In-charge Officer v. Shanker Shetty, (2010) 9 SCC 126 [LNIND 2010 SC 813]; Issue relating to validity of appointment
cannot be raised in absence of any pleading or reference, Durgapur Casual Workers Union v. Food Corporation of
India, (2015) 5 SCC 786 [LNIND 2014 SC 1005].
End of Document
Effect of Takeover on Right of Re-employment
Closure
Learning Objectives
his workmen;
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Effect of Takeover on Right of Re-employment
EFFECT OF TAKEOVER ON RIGHT OF RE-EMPLOYMENT— Updated On 08-01-2019
The employees of a colliery were retrenched and paid compensation under section 25F. subsequently the colliery
was taken over by a Government company. It was held that the retrenched employees had not become disentitled
to claim re-employment under section 25H.85 In a case, a worker was retrenched as a result of closure of
undertaking taken over by Government and he asked for retrenchment compensation and received it. He was also
given fresh appointment as clerk from 1981 and was also given additional benefit of grade IV from 1985 to 1986. It
was held by the Supreme Court that he is not entitled to claim any advantage for period of service rendered prior to
retrenchment.86
85 Workman v. Employers, Industry Colliery of Bharat Coking Coal Ltd., AIR 2001 SC 1994 [LNIND 2001 SC 749]:
(2001) 4 SCC 55 [LNIND 2001 SC 749] : (2001) 1 LLJ 1400 [LNIND 2001 SC 749].
86 Cement Corporation of India Ltd. v. Industrial Tribunal cum Labour Court, (2010) 15 SCC 754.
End of Document
Compensation to Workmen in Case of Transfer of Undertakings [Section
25FF]
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Learning Objectives
his workmen;
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Compensation to Workmen in Case of Transfer of Undertakings [Section 25FF]
COMPENSATION TO WORKMEN IN CASE OF TRANSFER OF UNDERTAKINGS [SECTION 25FF]— Updated On 08-

01-2019
Where the ownership or management of an undertaking is transferred, whether by agreement or by operation of

law, from the employer to a new employer, every workman who has been in continuous service for not less than
one year in that undertaking immediately before such transfer becomes entitled to notice and compensation in
accordance with the provisions of section 25F, as if the workman had been retrenched.
Nothing in this section applies to a workman in any case where there has been a change of employers by reason of
the transfer, if—
(a) the service of the workman has not been interrupted by such transfer;
(b) the terms and conditions of service applicable to the workman after such transfer are not in any way less
favourable to the workman than those applicable to him immediately before the transfer; and
(c) the new employer is, under the terms of such transfer or otherwise, legally liable to pay to the workman, in
the event of his retrenchment, compensation on the basis that his service has been continuous and has not
been interrupted by the transfer.87
Section 25FF of the I.D. Act by itself does not terminate the contract of employment and only provides for
compensation if the transfer either by the terms of transfer or by provisions of law results in the termination of
contract of employment.88
When transfer is fictitious or benami, section 25-FF has no application and workmen can claim continuity of service
with successor. Where transferor and transferee are a State or State instrumentality, the court can examine and
review arrangement under which undertaking is proposed to be transferred and continuity of service can be ordered
if there is complete succession to the business or undertakin89g. The court can ensure in such that no injustice
results from the change-over.89
In a case of transfer of a company as a going concern to another company, workmen unsuccessfully contested the
transfer and failed to avail the benefit of voluntary retirement scheme floated by the transferor company within the
stipulated time. After the transfer, they requested for VRS but it was declined. The State Government also refused
their application for reference of the dispute on the ground that interest of workmen was in no way affected by the
transfer of ownership of the company. In this regard, decision of the High Court in not accepting the challenge to
State refusal and directing payment of retrenchment compensation as per normal rules and conditions of service
was upheld by the Supreme Court. High Court was held to be rightly observing that workmen cannot be forced to
work under different management.90
Termination on Expiry of Contract
The section is not applicable to cases of termination of service on the expiry of the period of service which is for a
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Compensation to Workmen in Case of Transfer of Undertakings [Section 25FF]
fixed period. Termination of service on expiry of fixed term does not amount to retrenchment. Therefore, such an
employee cannot claim compensation under section 25-H. Mere use of the expression ‘daily wages’ for
appointment of service for a fixed period does not make the appointment ‘casual’.
Writ Remedy
The proper remedy against a settlement, whether fair or unfair, is by way raising an industrial dispute and not by
way of a writ petition.
87 See Bhola Nath Mookerjee v. Govt. of W.B., (1997) 2 Lab LJ 59 (SC), take over of a unit by West Bengal State
Electricity Board, employees accepting jobs offered to them, not entitled to retrenchment benefits. NTC (South
Maharasthra Ltd. v. Rashtriya Mill Mazdoor Sangh, (1993) 1 Lab LJ 954 (SC), takeover of textile mills under statutory
provisions, continuity of service maintained. Gurmail Singh v. State of Punjab, (1991) 2 Lab LJ 76 (SC), takeover,
continuity of service.
88 N.T.C. (S. Maharashtra) Ltd. v. Rashtriya Mill Mazdoor Sangh, (1993) I LLJ 954 (SC).
89 Gurmail Singh v. State of Punjab, (1999) II LLJ 76 (SC).
90 Sunil Kr Ghosh v. K. Ramchandran, (2012) 2 SCC (L&S) 921.
End of Document
Closure and Compensation [Section 25FFF]
Closure
Learning Objectives
his workmen;
Page 2 of 3
CLOSURE AND COMPENSATION [SECTION 25FFF]— Updated On 08-01-2019

Definition of Closure
The permanent closing down of a place of employment or part thereof is closure. According to the Bombay and
Madhya Pradesh Industrial Relations Act, the ‘closure’ means the closing of any place or part of a place of
employment or the total or partial suspension of work by any employer or the total or partial refusal by an employer
to continue to employ persons employed by him whether such closing, suspension or refusal is or is not in
consequence of an industrial dispute.
Closure and lockout are two different things. In closure the employer does not merely close down the place of
business but finally closes the business itself, whereas in a lock-out, the employer closes the place of business
only.
Closure is Fundamental Right
Closure is a fundamental right. It is a fundamental right of a citizen to carry on or close down business, industry or
work if he chooses and nobody can be compelled to carry on his business against his will.
Closure must be, when effected, permanent. This does not mean that the employer is barred from re-starting the
closed business or because the business is restarted, it was not closed with the intention of closing permanently. It
would be a question of fact whether the closure, when effected, was intended to be a permanent or temporary
closure. Refusal to employ a single worker may be a closure. The right is subject to liability of payment of
compensation to the workmen as provided by section 25FFF of the Industrial Disputes Act, 1947 and also to obtain
permission in cases covered by Chapter VB of the Act.
Closure implies termination of services, i.e. refusal to employ. It is not correct to say that the definition of closure
covers only those cases where the relationship of master and servant continues like that in “lock-outs.”
A closure of a section or department or a branch or a part of undertaking is a “closure” and is valid. It is not
retrenchment. Closure may also be effected in stages.
Closure and Lock-out
A closure and a lock-out may be distinguished in the following important respects:
Firstly, in closure there is severance of employment relationship while in lockout there is no severance but there is
only suspension.
Secondly, lock-out is caused by the existence or apprehension of an industrial dispute. A closure need not be in
consequence of an industrial dispute.
Thirdly, a lock-out is intended for the purpose of compelling the employees directly affected by the lock-out,
suspension or refusal or any other employees of his or aiding any other employer in compelling person employed
by him, to accept any term or conditions of affecting employment. In other words, a lockout is a tactic in bargaining.
While a closure is shutting employment and thereby ending bargaining. It is irrelevant what the intention in closing
is.
Page 3 of 3
The Supreme Court has explained this distinction in the following words: “The theoretical distinction between a
closure and a lock-out is well-settled. In the case of a closure the employer does not merely close down the place of
business, but he closes the business itself and so the closure indicates the final and irrevocable termination of the
business itself. Lock-out, on the other hand, indicates closure of the place and not the closure of business
itself............Though the destination between the two concepts is thus clear in theory, in actual practice it is not
always easy to decide whether the act of closure really amounts to a closure properly so called, or whether it is a
disguise for a lockout. In dealing with this question industrial adjudication has to take into account several relevant
facts and these facts may be proved before the industrial tribunal either by oral or by documentary evidence, and by
evidence of conduct and circumstances. In the instant case, the textile mill was closed by the employers with the
object of teaching the workmen a lesson for the incident of assault. It was resorted to as a measure of retaliation. It
was illegal as no prior notice as required by the law was given. It was unjustified as it was retaliatory.
Even assuming that it was a closure and not lock-out the industrial tribunal had the jurisdiction to consider as to
whether it was justified or not. The closure having been found unjustified by the industrial tribunal, the award
granting the relief to the concerned workmen could not be interfered with in the writ petition.
Closure and Discharge
They materially differ. In closure there is severance of status of employment which may be unconnected with the
conduct of the employee, but in discharge the severance of employment is connected with the conduct of the
employee and is by way of punishment or as a result of disciplinary proceedings.
End of Document
Sixty Days’ Notice to be Given of Intention to Close Down [Section 25FFA]
Closure
Learning Objectives
his workmen;
Page 2 of 2
Sixty Days’ Notice to be Given of Intention to Close Down [Section 25FFA]
SIXTY DAYS’ NOTICE TO BE GIVEN OF INTENTION TO CLOSE DOWN [SECTION 25FFA]— Updated On 08-
01-2019
An employer who intends to close down an undertaking shall serve, at least sixty days before the date on which the
intended closure is to become effective, a notice, in the prescribed manner, on the appropriate Government stating
clearly the reasons for the intended closure of the undertaking:3
This requirement does not apply to—
(a) an undertaking in which—
(i) less than fifty workmen are employed, or

(ii) less than fifty workmen were employed on an average per working day in the preceding twelve months.
(b) an undertaking set up for the construction of buildings, bridges, roads, canals, dams or for other
construction work or project.
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 to comply with the above requirement, by order
direct that provisions regarding notice shall not apply in relation to such undertaking for the specified period.
Provisions of section 25FFA are mandatory which require rigid compliance. Statutory protection is given to
workmen with avowed object to protect retrenched workmen since livelihood of workmen and their family members
would be adversely affected on account of retrenchment. Non-compliance of s. 25FFA renders actions of
retrenching workmen void and ab initio as same is inchoate and invalid.4
3 Provisions of the section have been held to be constitutionally valid and also reasonable, Bamwari Lolya v. State of
Maharashtra, (1994) 3 Lab LJ (Suppl) 306 (Bom).
4 Mackinnon Mackenzie & Co. Ltd. v. Employees Union, (2015) 4 SCC 544 [LNIND 2015 SC 120].
End of Document
Compensation to Workmen in Case of Closing Down [Section 25FFF]
Closure
Learning Objectives
his workmen;
Page 2 of 4
COMPENSATION TO WORKMEN IN CASE OF CLOSING DOWN [SECTION 25FFF]— Updated On 08-01-

2019
Where an undertaking is closed down for any reason whatsoever, every workman who has been in continuous
service for not less than one year in that undertaking immediately before such closure shall be entitled to notice and
compensation in accordance with the provisions of section 25F, in the same way as if the workman had been
retrenched.5
A unit or part of undertaking having no functional integrity with other units, if closed, it amounts to a closure under
section 25-FFF. A staff nurse in the appellant Society’s Maternity Hospital filed a claim petition alleging termination
of her service to be illegal for non-compliance of sections 25-F and 25-G of the Industrial Disputes Act. The
industrial tribunal upheld her claim and directed her reinstatement with back wages which was affirmed by the High
Court. In the appeal by the Society, the Supreme Court observed that Maternity Hospital was functioning as a
district entity. Due to financial stringency it had to be closed. Other units of the appellant were functioning as
separate entities. The mere fact that those units were not closed down could not lead to the inference that
termination of respondent’s service was illegal for non-compliance of section 25-F.
The Supreme Court further held that in order to attract section 25-FFF it was not necessary that the entire
establishment of an employer should be closed. If a unit or part of an undertaking which had no functional integrity
with other units was closed it would amount to ‘closure’ as defined in section 2(cc) read with section 25-FFF of the
Industrial Disputes Act, 1947.
The Supreme Court held the respondent entitled only to compensation as per section 25-FFF and not reinstatement
with back wages as per section 25-F of the I.D. Act, 1947.6
Where the undertaking is closed down on account of unavoidable circumstances beyond the control of the
employer, the compensation to be paid to the workman shall not exceed his average pay for three months.7
According to the Explanation, an undertaking which is closed down by reason merely of—
(i) financial difficulties (including financial losses); or
(ii) accumulation of undisposed stocks; or
(iii) the expiry of the period of the lease or licence granted to it; or
(iv) in case where the undertaking is engaged in mining operations, exhaustion of the minerals in the area in
which operations are carried on,
it 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.
Where an undertaking engaged in mining operations is closed down by reason merely of exhaustion of minerals in
Page 3 of 4
the area in which such operations are carried on, workman referred to in that sub-section are not entitled to any
notice or compensation in accordance with the provisions of section 25F, if—
(a) the employer provides the workman with alternative employment with effect from the date of closure at the
same remuneration as he was entitled to receive, and on the same terms and conditions of service as were
applicable to him immediately before the closure;
(b) the service of the workman has not been interrupted by such alternative employment; and
(c) the employer is, under the terms of such alternative employment or otherwise, legally liable to pay to the
workman, in the event of his retrenchment, compensation on the basis that his service has been
continuous and has not been interrupted by such alternative employment [Section 25FFF(1A)].
For the purposes of sub-sections (1) and (1A), the expressions “minerals” and “mining operations” have the same
meaning as is respectively assigned to them in section 3(a) and (b) of the Mines and Minerals (Regulation and
Development) Act, 1957.
Where any undertaking set-up for the construction of buildings, bridges, roads, canals, dams or other construction
work is closed down on account of the completion of the work within two years from the date on which the
undertaking was set up, no workman shall be entitled to any compensation under clause (b) of section 25F, but if
the construction work is not so completed within two years, he shall be entitled to notice and compensation under
that section for every completed year of continuous service or any part thereof in excess of six months.
The industrial tribunal can only consider the question of bona fides. It has no power to enquire into the motives of
closure in order to find out whether the closure is justified or not when indiscipline is established.8 The Tribunal
cannot go into the motives or has reasons of closure.9
When there are two units, out of which one closes, it has to be seen whether the other unit was an independent
establishment. Functional integrality between two units of an industrial establishment has to be established by
relevant tests. Nature and character of undertaking have to be looked into; mere unity of ownership, management
and control is not of much significance.10
It has been held by the Supreme Court that if the workmen had worked for 240 days during the period of 12 months
immediately preceding the date of closure, they would be entitled to compensation notwithstanding the legality of
strike.11
Notice of termination reciting that services were not required because of reduction in business would be conclusive
in determining the question whether it was a retrenchment. It was held that on a true construction of the notice, it
would appear that the employee had become surplus on account of reduction in the value of work and that
constitutes retrenchment.12
Usual Industrial unrest leading to demands and refusals, strikes and lockouts cannot be considered to be
“unavoidable circumstances beyond the control of the employer.”13
Where the undertaking is closed down not on account of unavoidable circumstances but due to financial difficulties,
it was held that labour court can examine claims under section 25-FFF, if application under section 33-C(2) was
made to it.14
Page 4 of 4
Control on Retrenchment, Closure and Lay-off
By the Amendment Act of 1976 prior approval of the appropriate Government has been necessary in the case of
lay-off, retrenchment and closure in industrial establishments where 300 or more workmen are employed. In the
interests of rehabilitation of workmen and for maintenance of supplies and services essential to the life of the
community, a provision is also made in the Act for restarting the undertakings which were already closed down
otherwise than on account of unavoidable circumstances beyond the control of the employer.
5 Employer has to prove conditions rendering termination of service to be not one of retrenchment, where no such proof
was present, termination was held to be retrenchment and the workmen concerned were held entitled to notice and
compensation as per section 25-FFF, as it was one of closing down on account of termination of work, S.M. Nilajkar v.
Telecom District Manager, Karnataka., (2003) III LLJ 359 : AIR 2003 SC 3553 : (2003) 4 SCC 27.
6 District Red Cross Society v. Babita Arora, (2007) III LLJ 777 : AIR 2007 SC 2879 [LNIND 2007 SC 956].
7 Managing Director, Haryana Seeds Development Corpn. v. Presiding Officer, (1997) 2 Lab LJ 823 : AIR 1997 SC
3086 [LNIND 1997 SC 865], closure on account of floods, amounted to retrenchment of labour; senior employees were
entitled to make representation and claim appointment afresh if juniors were subsequently re-employed. Even if the
undertaking is closed for reasons beyond its control, section 25-O is applicable, Hindalco Industries Ltd. v. Union of
India, (2004) I LLJ 450 : AIR 2004 SC 989; Management of Standard Motor Products of India Ltd. v. A. Parthasarthy,
(1986) 1 Lab LJ 34 (SC), those who completed 240 days before illegal strike, entitled to benefits. Isha Steel Treatment
v. Assn. of Engg. Workers, (1987) 1 Lab LJ 427 [LNIND 1987 SC 246] (SC), closing down of one of the factory units
held to be justified depsite unity of ownership, supervision, control and some other common features.
8 Savani Transport (P.) Ltd. v. Savani Transport Employees’ Assn., (1994) LLR 578 (Ker).
9 Indian Hume Pipe Co. Ltd., (1969) I LLJ 242 (SC).
10 Hindustan Steel Works Construction Ltd. v. Hindustan Steel Works Construction Ltd. Employees Union, (1997) III LLJ
(Suppl) 1224 : AIR 1995 SC 1163 [LNIND 1995 SC 233].
11 Management of Standard Motor Products of India Ltd. v. A. Parthasarthy, (1986) I LLJ 34 (SC).
12 Gammon India Ltd. v. Niranjan Dass, (1984) I LLJ 233 : AIR 1984 SC 500 [LNIND 1983 SC 361].
13 Rameshwar Dass v. State of Haryana, (1987) I LLJ 514 : AIR 1987 SC 713 [LNIND 1987 SC 172].
14 Inland Steam Navigation Workers Union v. Union of India, (2001) I LLJ 730 : (2001) 3 SCC 47 [LNIND 2001 SC 285].
End of Document
Effect of Laws Inconsistent with Chapter v [Section 25J]
Closure
Learning Objectives
his workmen;
Page 2 of 2
Effect of Laws Inconsistent with Chapter v [Section 25J]
EFFECT OF LAWS INCONSISTENT WITH CHAPTER V [SECTION 25J]— Updated On 08-01-2019
The provisions of this Chapter shall have effect notwithstanding anything inconsistent with it contained in any other
law including standing orders made under the Industrial Employment (Standing Orders) Act, 1946 [Section 25J(1)].
Provided that where under the provisions of any other Act or rules, orders or notifications issued under it or under
any Standing Order 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 the 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 matters under the Act.
For the removal of doubts, it has been declared that nothing contained in Chapter VA 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, insofar as they relate to lay-off and
retrenchment, shall be determined in accordance with the provisions of Chapter VA.
The provisions override any other law but not any other part of the Act itself. The Supreme Court pointed out in P.
Virudhachalam v. Management of Lotus Mills, 15 that the section nowhere provides that Chapter V-A of the Act shall
have effect notwithstanding anything inconsistent contained in any other Chapter of the Act as well as any other
law.
The use of the word “any other law” would include statutory rules framed under Article 309 of the Constitution of
India to regulate terms and conditions of Government employment. The word “law” has to be given a general and
wide meaning to include Rules framed under Constitutional provisions. The Rules framed under Article 309 are
legislative in character and they are laws for all purposes.16
Section 25-J provides that the provisions of Chapter V-A would have overriding effect irrespective of any other law
including Standing Orders. Chapter V-A deals with lay-offs and retrenchment. The introduction of a retirement age
is neither one nor the other. There is no substantive provision in Chapter V-A of the Act which pertains to the period
of service of an employee. Consequently, Section 25-J has no application at all to the present case because it
involved only termination on completion of the service period.17
15 P. Virudhachalam v. Management of Lotus Mills, (1998) 1 Lab LJ 389 : AIR 1998 SC 554.
16 Union of India v. Presiding Officer, Central Govt. Industrial Tribunal, (1998) 1 Lab LJ 994 (MP).
17 Harmohinder Singh v. Kharga Canteen, Ambala Cantt., (2001) 5 SCC 540 : AIR 2001 SC 2681.
End of Document
Application of Chapter vb [Section 25K]
Laws > PART I THE INDUSTRIAL DISPUTES ACT, 1947 > Special Provisions Relating to Lay-
Off, Retrenchment and Closure in Certain Establishments
Learning Objectives
his workmen;
CHAPTER 8 Special Provisions Relating to Lay-Off, Retrenchment and Closure in

Certain Establishments
APPLICATION OF CHAPTER VB [SECTION 25K]— Updated On 08-01-2019
The provisions of this Chapter apply to such an industrial establishment:—
(a) which is not of a seasonal character or in which work is performed only intermittently
Page 2 of 2
Application of Chapter vb [Section 25K]
(b) in which not less than one hundred workmen were employed on an average per working day for the
preceding twelve months.
If a question arises whether an industrial establishment is of a seasonal character or whether work is performed
there only intermittently, the decision of the appropriate Government shall be final1 [Section 25K].
1 Government of India v. Workmen of State Trading Corpn., (1998) 2 Lab LJ 40 : AIR 1989 SC 1532, closure of the unit
of the State Trading Corpn., the Government could not be directed to absorb labour because there was no relationship
of master and servant between the Government and the workmen. Where the order of State Government declared
appellant’s establishment as one of seasonal character only on the basis of drastic reduction in sugarcane crushing
activity, the order was held to be not sustainable, Spl. Officer & Joint Registrar, Co-op. Societies v. Workmen of
Vanivilas Sugar Factory, (2001) I LLJ 1381 : (2001) 2 SLT 695.
End of Document
Definitions [Section 25L]
Learning Objectives
his workmen;

DEFINITIONS [SECTION 25L]— Updated On 08-01-2019
For the purposes of this Chapter— “industrial establishment” means—
(i) a factory as defined in section 2(m) of the Factories Act, 1948 2;

Page 2 of 2
Definitions [Section 25L]
(ii) a mine as defined in section 2(1)(j) of the Mines Act, 1952; or
(iii) a plantation as defined in section 2(f) of the Plantations Labour Act, 1951;
The Central Government shall be the appropriate Government in relation to—
(i) any company in which not less than fifty one percent, of the paid-up share capital is held by the Central
Government, or
(ii) any corporation [not being a corporation referred to in section 2(a)(i)] established by or under any law
made by Parliament.
This will be so notwithstanding the provisions in section 2(a)(ii).
2 The term premises in the definition of factory not only covers buildings but even open lands, Lal Mohammad v. Indian
Rly. Construction Co., (1999) 1 Lab LJ 317 : AIR 1999 SC 355 [LNIND 1998 SC 1073]. A contractor running a canteen
in factory, his labour is separate from that of factory, bound to apply under section 25-O, SRF Ltd. v. Govt. of T.N.,
(1996) 3 Lab LJ (Suppl) 370 (Mad).
End of Document
Prohibition and Prior Permission for Lay-Off [Section 25M]
Learning Objectives
his workmen;

PROHIBITION AND PRIOR PERMISSION FOR LAY-OFF [SECTION 25M]— Updated On 08-01-2019
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 Chapter V-B applies shall be laid-off by his employer except with the prior3
permission of the appropriate Government or authority specified by the appropriate Government by notification in
the Public Gazette. Such permission is not necessary where the lay-off is due to shortage of power or to natural
calamity, and the case of a mine, such lay-off is due also to fire, flood, excess of inflammable gas or explosion.4
Page 2 of 3
An application for permission has to be made by the employer in the prescribed manner stating clearly the reasons
for the intended lay-off and a copy of such application has to be served simultaneously on the workmen concerned
in the prescribed manner [sub-section(1)].
Where the workmen (other than badli workmen or casual workmen) of an industrial establishment, being a mine,
have been laid-off for reasons of fire, flood or excess of inflammable gas or explosion, the employer, within a period
of thirty days from the date of commencement of such lay-off, has to apply, to the appropriate Government or the
specified authority for permission to continue the lay-off in the prescribed-manner [sub-section (3)].
Where an application for permission has been made, the appropriate Government or the specified authority may
grant or refuse to grant such permission. An order in this respect will be passed, after making such enquiry 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. The Authority has to pay regard to the genuineness and adequacy of the reasons
for the lay-off, the interests of the workmen and all other relevant factors. The order has to be in writing with a
statement of reasons. A copy of the order has to be communicated to the employer and the workman.
Where an application for permission has been made 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 sixty
days from the date on which such application is made, the permission shall be deemed to have been granted on the
expiration of the period of sixty days.
An order of the appropriate Government or the specified authority granting or refusing to grant permission shall, be
final and binding on all the parties concerned and shall remain in force for one year from its date. But this is subject
to provisions of sub-section(7) which provides for the reference being made to the Tribunal where the Tribunal has
to pass its awards within a period of thirty days from the date of reference.
The appropriate Government or the specified authority may review its order granting or refusing to grant permission
or refer the matter or cause it to be referred for adjudication to a Tribunal either—
(i) on its own motion, or
(ii) on the application made by the employer or any workman.
Where a reference has been made to a Tribunal, the Tribunal has to pass its award within a period of thirty days
from the date of the reference.
The 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 in any of
the following cases:—
(i) where an application for permission has been made under sub-section (1), or
(ii) where no application for permission has been made within the period specified in it under sub-section (3),
or
Page 3 of 3
(iii) where the permission for any lay-off has been refused.
Notwithstanding anything contained in the foregoing provisions of this section, the appropriate Government may, if it
is satisfied that owing to such exceptional circumstances an accident in the establishment or death of the employer
or the like, it is necessary so to do, by order, direct that the provisions of sub-s (1), or sub-s (3) shall not apply in
relation to the establishment for such period as may be specified in the order [section 25M(9)].
The provisions of section 25C (other than its second proviso) shall apply to cases of lay-off referred to in this
section [section 25M(10)].
An Explanation appended to the section says that for the purposes of the section, a workman shall not be deemed
to be laid-off by an employer if the employer offers any alternative employment (which in the opinion of the
employer does not call for any special skill or previous experience and is, therefore, within the competence of the
workman) in the same establishment from which he has been laid-off or in any other establishment belonging to the
same employer, situate in the same town or village, or situate within such distance form 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 appointment also.
3 Statutory permission has to be taken before laying off, Ashok Kumar Jain v. State of Bihar, (1995) 2 Lab LJ 685 :
(1995) 1 SCC 320 [LNIND 1994 SC 1211].
4 “We have upheld the vires of section 25M in the decision rendered in Civil Appeal No. 807/1982. Therefore, section
25M is not ultra vires and prosecution for violation of the section is maintainable, Ashok Kumar Jain v. State of Bihar,
(1995) 2 Lab LJ 685 : (1995) 1 SCC 320 [LNIND 1994 SC 1211].
End of Document
Conditions Precedent to Retrenchment of Workmen [Section 25N]
Learning Objectives
his workmen;

CONDITIONS PRECEDENT TO RETRENCHMENT OF WORKMEN [SECTION 25N]— Updated On 08-01-2019
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,—
Page 2 of 4
(a) the workman has been given three 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 the authority specified by that Government by
notification in the Official Gazette has been obtained on an application made in this behalf [section 25N(1)].
An application for permission 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 manner5 [section 25N(2)].
Where an application for permission has been made, the appropriate Government or the specified authority may
refuse to grant it. The Government may make such enquiry as it thinks fit and give a reasonable opportunity of
being heard to the employer, the workmen concerned and the person interested in such retrenchment. Regard
should be had of the genuineness and adequacy of the reasons stated by the employer, the interests of the
workmen and all other relevant factors. Reasons for grant of or refusal to grant permission should be recorded in
writing. The order has to be communicated to the employer and workmen.
Where an application for permission has been made 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 sixty
days from the date of application, the permission applied for shall be deemed to have been granted on the
expiration of the period of sixty days.
An order of the appropriate Government or the specified authority granting or refusing to grant permission is final
and binding on all the parties concerned and remains in force for one year from its date.
The Government may review its orders or refer the matter or cause it to be referred to a Tribunal for adjudication.
The Government or the specified authority may do so either on its own motion or on the application made by the
employer or any workman.
Where a reference has been made to a Tribunal it shall pass an award within a period of thirty days from the date of
the reference.6
Where no application for permission under sub-section (1) is made, or where the permission for any retrenchment
has been refused, the retrenchment shall be deemed to be illegal from the date on which the notice of retrenchment
was given to the workman. 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.
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, direct that the provisions of subsection
(1) shall not apply in relation to such establishment for such period as may be specified in the order.
Where permission for retrenchment has been granted or is deemed to be granted every workman who is employed
in that establishment immediately before the date of application for permission shall be entitled to receive,
compensation which shall be equivalent to fifteen days’ average pay for every completed year of continuous service
or any part thereof in excess of six months [section 25N(9)]
By the introduction of section 25-N of the Act prior scrutiny of the reasons for retrenchment has been enacted to
prevent avoidable hardship to the employees resulting from retrenchment by protecting existing employment and
Page 3 of 4
check the growth of unemployment which would otherwise be the consequence of retrenchments in industrial
establishments employing large number of workmen. The section is also intended to maintain higher tempo of
production and productivity by preserving industrial peace and harmony. The section gives effect to the mandate
contained in the Directive Principles of the Constitution. Therefore, the restrictions imposed by the section 25-N on
the right of the employer to retrench workmen is in general public interest.
While exercising power under Section 25-N(2), the appropriate Government exercises powers which are guasi-
judicial in nature and not purely administrative.7
It would be permissible for the appropriate Government to grant permission for retrenchment of only some of the
workmen proposed to be retrenched and to refuse permission for the rest of the workmen.
In enacting Chapter VB the intention of the Parliament was to alter the existing law relating to lay-off, retrenchment
and closure in relation to large Industrial establishments falling within the ambit of Chapter VB because the existing
law enabled large scale lay-offs, retrenchments and closure by large companies and undertakings resulting in all
round demoralising effect on workmen.
Though the appropriate Government is required to act judicially while granting or refusing permission for
retrenchment of workmen, it is not invested with the judicial power of the Court and it cannot be regarded as a
Tribunal within the meaning of Article 136 of the Constitution. No appeal would therefore lie to the Supreme Court
against an order passed under section 25-N(2).8
Absence of a provision for appeal or revision against an order under section 25-N(2) is not of much consequence
especially when it is open to an aggrieved party to invoke the jurisdiction of the High Court under Article 226 of the
Constitution of India. The remedy of judicial review under Article 226 is an adequate protection against-arbitrary
action in the matter of exercise of power by the Government under section 25-N(2) of the Act.9
Where appellants were drawing regular wages as applicable to permanent workers and reporting regularly for work,
the management was not taking any work from them since 2003, most of the workers had already gone on VRS but
neither management nor workers could agree on offers made by either side, the SC invoking Article 142 directed to
give Rs. 10 lakhs to appellants taking into consideration the age factor of appellants that interest of justice would be
met if they are paid lump sum amount towards settlement of all their dues. However, this amount did not include
their claim of provident fund and gratuity.10
5 The scheme of section 25N is Constitutionally valid. The restriction imposed on the right of the employer is in general
public interest. The power under the section is quasi-judicial and not purely administrative. The Authority has got the
power under the section to grant permission for retrenchment only of some of the workers proposed to be retrenched
and refuse permission for the rest. The Authority is not vested with judicial power while functioning under sub-section
(2). No appeal lies to the Supreme Court. Workers of Meenakshi Mills Ltd. v. Meenakshi Mills Ltd., (1992) 2 Lab LJ 294
: AIR 1994 SC 2696 [LNIND 1992 SC 411]. The Supreme Court further observed that the power has to be exercised
on objective consideration of relevant facts after giving an opportunity to all parties. Sufficient guidance is given in the
Act on the manner of exercise of the power. Conditions of employment or industry in the State can be taken into
account. The power does not infringe the fundamental right under Article 19(1)(g). The duty to pass a speaking order is
a sufficient safeguard against arbitrary action. Delegation of power to the appropriate Government to specify authority
does not render the provisions of section 25N arbitrary or unreasonable. J.K. Synthetics v. Rajasthan Trade Union
Kendra, AIR 2001 SC 531 [LNIND 2000 SC 1855]: (2001) 2 SCC 87 [LNIND 2000 SC 1855] : (2001) 1 LLJ 561 [LNIND
2000 SC 1855], the Supreme Court directed the decision in Meenakshi to be followed, the provision having been held
to be constitutionally valid.
Page 4 of 4
6 When it was open to the appellants to avail a reference under sub-s. (6) and they did not choose to do so but chose
the remedy of writ petition, they could not be heard to make a grievance that the High Court should not have gone into
the question of non-compliance of section 9A, (1998) 3 Lab LJ (Suppl) 711 (SC).
7 A reference under section 10(1) cannot be used to circumvent or bypass the statutory scheme provided under section
25-N, Empire Industries Ltd. v. State of Maharashtra, (2010) 4 SCC 272 [LNIND 2010 SC 251].
8 Workmen of Meenakshi Mills Ltd. v. Meenakshi Mills Ltd., (1992) II LLJ 294 : AIR 1994 SC 2696 [LNIND 1992 SC
411]. The units of a construction company are independent units. Workmen of one unit cannot claim absorption in
another unit on completion of work in that unit. Indian Railways Construction Co. Ltd. v. Lal Mohd., (1998) 2 Lab LJ 214
(All). Where there was no proof that the application was made by the employer or workmen, the permission granted on
the basis of such an application was held to be not according to law, while the relief of reinstatement was not granted,
Rs. 10,000 were directed to be paid to each workman in addition to retrenchment compensation, Shiv Kumar v. State of
Haryana, (1995) 1 Lab LJ 1162 : (1994) 4 SCC 445 [LNIND 1994 SC 474]. Compensation to workmen in statutory
canteens, who could not be absorbed as they were ineligible according to the criteria, was held to be considered under
section 25-N and their reemployment under section 25-H, Indian Petrochemicals Corporation Ltd. v. Shramik Sena,
(2001) I LLJ 1040 : AIR 2001 SC 857 [LNIND 2001 SC 241].
9 Workmen of Meenakshi Mills Ltd. v. Meenakshi Mills Ltd., [1992] II LLJ 294 : AIR 1994 SC 2696 [LNIND 1992 SC
411]. The units of a construction company are independent units. Workmen of one unit cannot claim absorption in
another unit on completion of work in that unit. Indian Railways Construction Co. Ltd. v. Lal Mohd., (1998) 2 Lab LJ 214
(All). Where there was no proof that the application was made by the employer or workmen, the permission granted on
the basis of such an application was held to be not according to law, while the relief of reinstatement was not granted,
Rs. 10,000 were directed to be paid to each workman in addition to retrenchment compensation, Shiv Kumar v. State of
Haryana, (1995) 1 Lab LJ 1162 : (1994) 4 SCC 445 [LNIND 1994 SC 474]. Compensation to workmen in statutory
canteens, who could not be absorbed as they were ineligible according to the criteria, was held to be considered under
section 25-N and their re-employment under section 25-H. Indian Petrochemicals Corporation Ltd. v. Shramik Sena,
(2001) I LLJ 1040 : AIR 2001 SC 857 [LNIND 2001 SC 241].
10 Ghanshyam Sukhdeo Gaikwad v. Baja Auto Ltd., AIR 2016 SC 2255.
End of Document
Procedure for Closing Down an Undertaking [section 25-O]
Learning Objectives
his workmen;

PROCEDURE FOR CLOSING DOWN AN UNDERTAKING [SECTION 25-O]— Updated On 08-01-2019
An employer who intends to close down an undertaking of an industrial establishment to which Chapter VB applies,
has to apply, in the prescribed manner, for prior permission at least ninety days before the date on which the
intended closure is to become effective, to the appropriate Government. He has to state clearly the reasons for the
intended closure of the undertaking. A copy of the application has also to be served simultaneously on the
representatives of the workmen in the prescribed manner.
Page 2 of 4
This sub-section does not apply to an undertaking set up for the construction of buildings, bridges, roads, canals,
dams or for other construction work [Section 25-0(1)].
Where an application for permission has been made appropriate Government, makes such enquiry as it thinks fit
and gives a reasonable opportunity of being heard to the employer, the workmen and the persons interested in
such closure. The Government pays regard to the genuineness and adequacy of the reasons stated by the
employer, the interests of the general public and all other relevant factors. It has to state its reasons in writing to
granting or refusing to grant its permission. A copy of the order has to be communicated to the employer and
workmen [Section 25-0(2)].
Where an application has been made and the appropriate Government does not communicate the order granting or
refusing to grant permission to the employer within a period of sixty days from the date on which the application was
made, the permission applied for shall be deemed to have been granted on the expiration of the period of sixty
days.
An order of the appropriate Government granting or refusing to grant permission shall be final and binding on all the
parties. It remains in force for one year from its date.
The appropriate Government 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 or refer the matter to a Tribunal for adjudication.
Where a reference has been made to a Tribunal, it has to pass an award within a period of thirty days from the date
of reference.
Where no application for permission has been made within the prescribed period, 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. 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.
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 to do so, it may 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.
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, shall be entitled to receive compensation which shall be equivalent to
fifteen days’ average pay for every completed year of continuous service or any part thereof in excess of six
months.
The Supreme Court observed in a case before it that the bone of contention between the parties concerned
centered round the question whether section 25-N of the I.D Act was attracted in the facts of the case. In this case,
the workers were aggrieved by the notices of retrenchment of their services on the ground that most of the Rihand
Nagar Project in which they employed was over and they were rendered surplus. It was held by the Supreme Court
that the proviso to section 250 of the Act could not be transplanted by any judicial interpretation, as the Division
Bench in its impugned Judgement, purported to do, to be a proviso of section 25-N which dealt with entirely a
different topic of condition precedent to retrenchment of workmen.11
In Vazir Glass Works Ltd. v. Maharashtra General Kamgar Union, 12 the Supreme Court held that the decision
made by the State Government on the question of closure of an industrial unit cannot but bring about serious
Page 3 of 4
consequence affecting productivity, employment opportunities, etc., and, therefore, the decision taken on the
application for closure has been made operative for one year only, so that after such period, if an employer still
desires that the industrial unit should be closed, it may make a fresh application for permission to close the unit. It is
quite obvious that in application under the section not only the factors which were indicated in the previous
application in justification of closure of the industrial unit but other factors emerging with the passage of time may be
placed before the State Government for taking decision on the application for permission to close. In order to avoid
any unmerited hardship being meted out to an aggrieved party on account of improper or incorrect decision made
by the State Government on the application for permission to close, even during the period of one year when the
decision of the State Government remains operative, the review application may be made by the party aggrieved.
Even apart from such application, the State Government may also initiate suo motu proceeding to review its
decision. If the State Government passes any order on such review application, such order will supersede the initial
order made on the application for permission to close.
Since the decision made on an application for permission for closure is to remain operative only for a year, the
Supreme Court said, it will be only proper to hold that an order by way of review either on the aggrieved party’s
application or on own motion of the State Government, must be made within the period of one year. 0 therwise, the
right to make fresh application for permission to close after expiry of one year form the date of rejection of
permission for closure will lose its relevance. It also appears, the Supreme Court said, that anomalous situation
may arise if the application for review, when presented within the time frame of one year is allowed to be decided
even after the expiry of that time frame of one year when the order passed by the State Government has also
already ceased to be operative.
Although it has not been expressly indicated within what period a review application validly made is to be disposed
of, but the provision that an order on an application for closure would remain in force for one year and in the
absence of any embargo to make fresh application for such permission after expiry of one year even when a review
application remains pending, makes it clear that in the scheme of section 25-0, the review application is to be made
before expiry of the time frame of one year and such application is to be disposed of within such time frame
otherwise such review application would become infructuous.
The principle of retaining jurisdiction for the purpose of disposing of a review application validly made or the
principle that an authority if clothed with power of review will not become functus officio after expiry of the time
frame of one year but it will retain its authority to dispose of the pending review application will arise in the context
of the scheme of section 25-0.
Reference of the Industrial Tribunal for adjudication of the application for permission to close an industrial unit is
made under section 25-0(5) of the Industrial Disputes Act and not under section 10(1) of the Act.
The State Government would cease to have jurisdiction to review its order on the application for closure of an
industrial unit after expiry of one year form the date of the rejection of the application for permission to close.
The Proviso to section 25-N deals with conditions precedent to retrenchment, section 25-0 deals with closing down
of undertaking. Hence, proviso to Section 25-0 cannot be transplanted by judicial interpretation to be proviso to
section 25-N, as it deals with entirely different topic.13
Government Undertaking
Where the undertaking to be closed down is state-owned, the state has first to take an administrative decision and
then a quasi-judicial decision under section 25-0.
Page 4 of 4
11 Lal Mohammed v. Indian Railway Construction Co. Ltd., (1999) I LLJ 317 : AIR 1999 SC 2265.
Orissa Textile & Steel Ltd. v. State of Orissa, AIR 2002 SC 708 [LNIND 2002 SC 42]: (2002) 1 LLJ 858 [LNIND 2002 SC 42].
Section 25(o) is constitutionally valid because the words “appropriate Govt. after making such inquiry as it thinks fit” do not
confer discretion on the Govt. to dispense with inquiry, though it can exercise discretion as to the nature of inquiry. The order of
the Govt. has to be in writing and contain reasons. The State Amendment permitted the employer to apply for permission again
after 12 months. This is also constitutionally valid.
12 (1996) I LLJ 962 : AIR 1996 SC 1285. Orissa Textile & Steel Ltd. v. State of Orissa, AIR 2002 SC 708 [LNIND 2002
SC 42]: (2002) 1 LLJ 858 [LNIND 2002 SC 42], on Govt. power of review; the employer has not to give three month’s
notice after permission, he has only to pay the statutory compensation.
13 (1999) I LLJ 317 : AIR 1999 SC 2265.
End of Document
Special Provision for Restart of Units Closed before Amendment of 1976
[Section 25P]
Learning Objectives
his workmen;

SPECIAL PROVISION FOR RESTART OF UNITS CLOSED BEFORE AMENDMENT OF 1976 [SECTION 25P]—
If the appropriate Government is of opinion in respect of any undertaking or an industrial establishment to which this
chapter applies and which closed down before the commencement of the Industrial Disputes (Amendment) Act,
1976—
Page 2 of 2
Special Provision for Restart of Units Closed before Amendment of 1976 [Section 25P]
(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 direct 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. Before passing such an order, the employer and workman should be
given an opportunity to be heard. The order has to be published in the Official Gazette.
End of Document
Penalty for Lay-off and Retrenchment without Previous Permission [Section
25Q]
Learning Objectives
his workmen;

PENALTY FOR LAY-OFF AND RETRENCHMENT WITHOUT PREVIOUS PERMISSION [SECTION 25Q]— Updated On
08-01-2019
Any employer who contravenes the provisions of section 25M or of section 25N shall be punishable with
imprisonment for a term which may extend to one month, or with fine which may extend to one thousand rupees, or
with both.15
Page 2 of 2
Penalty for Lay-off and Retrenchment without Previous Permission [Section 25Q]
15 See, Ashok Kumar Jain v. State of Bihar, (1995) 2 Lab LJ 685 : (1995) 1 SCC 516 [LNIND 1994 SC 1161], prosecution
of chairman, managing director, and officers of the company for offences under section 25M read with section 25Q.
End of Document
Penalty for Closure [Section 25R]
Learning Objectives
his workmen;

PENALTY FOR CLOSURE [SECTION 25R]— Updated On 08-01-2019
Any employer who closes down an undertaking without complying with the provisions of sub-section (1) of section
25-0 shall be punishable with imprisonment for a term which may extend to six months, or with fine which may
extend to five thousand rupees, or with both.
Any employer, who contravenes an order refusing to grant permission to close down an undertaking under sub-
Page 2 of 2
Penalty for Closure [Section 25R]
section (2) of section 25-0 or a direction given under section 25P, shall be punishable with imprisonment for a term
which may extend to one year, or with fine which may extend to five thousand rupees, or with both, and where the
contravention is a continuing one, with a further fine which may extend to two thousand rupees for every day during
which the contravention continues after the conviction.
End of Document
Application of Certain Provisions to Certain Establishments [Section 25-S]
Learning Objectives
his workmen;

APPLICATION OF CERTAIN PROVISIONS TO CERTAIN ESTABLISHMENTS [SECTION 25-S]— Updated On 08-01-

2019
The provisions of sections 25B, 25D, 25FF, 25G, 25H and 25J in Chapter VA shall, so far as may be, apply also in
relation to an industrial establishment to which the provisions of this Chapter apply.
Overriding Effect of Provisions

Page 2 of 2
Application of Certain Provisions to Certain Establishments [Section 25-S]
The provisions of Chapters VA & VB shall have effect notwithstanding anything inconsistent contained in any other
law [including Standing Orders made under the Industrial Employment (Standing Orders) Act, 1946.
Where under the provisions of any other Act or rules, orders or notifications issued thereunder or under any
Standing Orders or under 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.
For the removal of doubts, the section also declares that nothing contained in the 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 the 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 the Chapter [25J and 25S].
End of Document
Prohibition of Unfair Labour Practice
Laws > PART I THE INDUSTRIAL DISPUTES ACT, 1947 > Unfair Labour Practices
Learning Objectives
his workmen;
CHAPTER 9 Unfair Labour Practices
An unfair labour practice has been defined as any of the practices specified in 5th Schedule. In India, the State of
Maharashtra enacted the M.R.T.U. & P.U.L.P. Act, 1971, which deals exhaustively with unfair labour practices.
Gaining by a decade’s experience of Maharashtra, the Amendment Act, 1982 identified unfair practices in Fifth
Schedule and declared them illegal and criminal offences by Sections 25T and 25U. Unlike the Maharashtra Act,
the Central law does not provide for effective prevention or stoppage or rectification of unfair practices. The
innovative feature of this law is prohibition of unfair labour practices by “workmen” also. Where the employer,
engaging agricultural labour seasonally, issued a circular disallowing fresh persons for continuing in service for
more than 240 days, such circular instruction would not amount to unfair labour practice having regard to the
seasonal temporary operations. Labourers other than those engaged in agricultural operations cannot be
terminated from service so as to prevent them form completing 240 days. Such termination of such labourers would
amount to unfair labour practice.
Page 2 of 2
Prohibition of Unfair Labour Practice
In the changed economic scenario, the concept of unfair labour practice is also required to be understood in
changed context. Today every State, which has to do the mantle of a welfare State, must keep in mind the twin
objectives of industrial peace and economic justice and the courts and statutory bodies which decide what an unfair
labour practice is must also be cognizant of the aforesaid two objects. Any unfair labour practice within its very
concept must have some elements of arbitrariness and unreasonableness and if unreasonableness is established
the same would bring about violation of fundamental right guaranteed under Article 14 of the Constitution. Anyone
who alleges unfair labour practice must plead it specifically and such allegations must be established properly
before any forum can pronounce on the same.
Any Government undertaking cannot justify illegal action including unfair labour practice nor can ask for different
treatment on ground that public undertaking is guided by Articles 14 and 16 of Constitution of India.
Where commission of unfair labour practice is ex facie clear from facts pleaded by both the parties, it was held that
even without pleading courts have the power to adjudicate the same to resolve disputes. The Supreme Court held
that it is necessary to achieve industrial peace and harmony and promote the cause of social justice in the larger
public interest.
In a case, 154 workers applied for 89 vacancies on their own when their employer introduced a scheme of
promotion. They did not make any complain either to the union or the management in respect of introduction of the
scheme. In the absence of any allegation of victimization it was difficult to find out a case of unfair labour practice
against the management. In these circumstances, the Supreme Court held that it cannot be said that the
management was indulging in unfair labour practices. Employing workmen and temporary, badli and part-time
employees doing perennial nature of work against permanent posts and continuing them for number of years has
been held to be unfair labour practice.
Fine balancing of rights of employers and employees are required in a dispute. It would depend upon facts of each
case whether order of regularization is necessitated to advance justice or it has to be denied if giving such a
direction infringes upon the employer’s rights. The law laid down in U.P. Power Corporation and Maharashtra SRTC
was held to be not contradictory to each other by the SC. It was held by the SC that on harmonious reading of the
two judgments, even where there are two posts available, an absence of any unfair labour practice the Labour
Court cannot give any direction for regularization only because a worker has continued as a daily-wage worker or
ad hoc worker or a temporary worker for a number of years.
PROHIBITION OF UNFAIR LABOUR PRACTICE— Updated On 08-01-2019
No employer or workman or a trade union, whether registered under the Trade Union Act, 1926, or not, shall
commit any unfair labour practice [section 25T].
End of Document
Penalty for Committing Unfair Labour Practices
Laws > PART I THE INDUSTRIAL DISPUTES ACT, 1947 > Unfair Labour Practices
Learning Objectives
his workmen;
CHAPTER 9 Unfair Labour Practices
An unfair labour practice has been defined as any of the practices specified in 5th Schedule. In India, the State of
Maharashtra enacted the M.R.T.U. & P.U.L.P. Act, 1971, which deals exhaustively with unfair labour practices.
Gaining by a decade’s experience of Maharashtra, the Amendment Act, 1982 identified unfair practices in Fifth
Schedule and declared them illegal and criminal offences by Sections 25T and 25U. Unlike the Maharashtra Act,
the Central law does not provide for effective prevention or stoppage or rectification of unfair practices. The
innovative feature of this law is prohibition of unfair labour practices by “workmen” also. Where the employer,
engaging agricultural labour seasonally, issued a circular disallowing fresh persons for continuing in service for
more than 240 days, such circular instruction would not amount to unfair labour practice having regard to the
seasonal temporary operations. Labourers other than those engaged in agricultural operations cannot be
terminated from service so as to prevent them form completing 240 days. Such termination of such labourers would
amount to unfair labour practice.
Page 2 of 2
Penalty for Committing Unfair Labour Practices
In the changed economic scenario, the concept of unfair labour practice is also required to be understood in
changed context. Today every State, which has to do the mantle of a welfare State, must keep in mind the twin
objectives of industrial peace and economic justice and the courts and statutory bodies which decide what an unfair
labour practice is must also be cognizant of the aforesaid two objects. Any unfair labour practice within its very
concept must have some elements of arbitrariness and unreasonableness and if unreasonableness is established
the same would bring about violation of fundamental right guaranteed under Article 14 of the Constitution. Anyone
who alleges unfair labour practice must plead it specifically and such allegations must be established properly
before any forum can pronounce on the same.
Any Government undertaking cannot justify illegal action including unfair labour practice nor can ask for different
treatment on ground that public undertaking is guided by Articles 14 and 16 of Constitution of India.
Where commission of unfair labour practice is ex facie clear from facts pleaded by both the parties, it was held that
even without pleading courts have the power to adjudicate the same to resolve disputes. The Supreme Court held
that it is necessary to achieve industrial peace and harmony and promote the cause of social justice in the larger
public interest.
In a case, 154 workers applied for 89 vacancies on their own when their employer introduced a scheme of
promotion. They did not make any complain either to the union or the management in respect of introduction of the
scheme. In the absence of any allegation of victimization it was difficult to find out a case of unfair labour practice
against the management. In these circumstances, the Supreme Court held that it cannot be said that the
management was indulging in unfair labour practices. Employing workmen and temporary, badli and part-time
employees doing perennial nature of work against permanent posts and continuing them for number of years has
been held to be unfair labour practice.
Fine balancing of rights of employers and employees are required in a dispute. It would depend upon facts of each
case whether order of regularization is necessitated to advance justice or it has to be denied if giving such a
direction infringes upon the employer’s rights. The law laid down in U.P. Power Corporation and Maharashtra SRTC
was held to be not contradictory to each other by the SC. It was held by the SC that on harmonious reading of the
two judgments, even where there are two posts available, an absence of any unfair labour practice the Labour
Court cannot give any direction for regularization only because a worker has continued as a daily-wage worker or
ad hoc worker or a temporary worker for a number of years.
PENALTY FOR COMMITTING UNFAIR LABOUR PRACTICES— Updated On 08-01-2019
Any person who commits any unfair labour practice 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 [section 25U].
End of Document
Penalty for illegal strikes and lock-outs [Section 26]
Laws > PART I THE INDUSTRIAL DISPUTES ACT, 1947 > Penalties
Learning Objectives
his workmen;
CHAPTER 10 Penalties
PENALTY FOR ILLEGAL STRIKES AND LOCK-OUTS [SECTION 26]— Updated On 08-01-2019
Any workman who commences, continues or otherwise acts in furtherance of, a strike which is illegal under the Act,
shall be punishable with imprisonment for a term which may extend to one month, or with fine which may extend to
fifty rupees, or with both [section 26(1)].
Any employer who commences, continues, or otherwise acts in furtherance of a lock-out which is illegal under the
Act, shall be punishable with imprisonment for a term which may extend to one month, or with fine which may
extend to one thousand rupees, or with both [section 26(2)].
Page 2 of 2
Penalty for illegal strikes and lock-outs [Section 26]
End of Document
Penalty for Instigation, etc. [Section 27]
Learning Objectives
his workmen;
PENALTY FOR INSTIGATION, ETC. [SECTION 27]— Updated On 08-01-2019
Any person who instigates or incites others to take part in, or otherwise acts in furtherance of, a strike or lock-out
which is illegal under the Act, 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.
End of Document
Penalty for Giving Financial Aid to Illegal Strikes and Lock-Outs [Section
28]
Learning Objectives
his workmen;
PENALTY FOR GIVING FINANCIAL AID TO ILLEGAL STRIKES AND LOCK-OUTS [SECTION 28]— Updated On 08-
01-2019
Any person who knowingly expends or applies any moneys in direct furtherance or support of any illegal strike or
lock-out 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.
End of Document
Penalty for Breach of Settlement or Award [Section 29]
Learning Objectives
his workmen;
PENALTY FOR BREACH OF SETTLEMENT OR AWARD [SECTION 29]— Updated On 08-01-2019
Any person who commits a breach of any term of any settlement or award, which is binding on him under the Act,
shall be punishable with imprisonment for a term which may extend to six months, or with fine, or with both, and
where the breach is a continuing one, with a further fine which may extend to two hundred rupees for every day
during which the breach continues after the conviction for the first. The court trying the offence, if it fines the
offender, may direct that the whole or any part of the fine realised from him shall be paid, by way of compensation,
to any person who, in its opinion, has been injured by such breach.
End of Document
Penalty for Disclosing Confidential Information [Section 30]
Learning Objectives
his workmen;
PENALTY FOR DISCLOSING CONFIDENTIAL INFORMATION [SECTION 30]— Updated On 08-01-2019
Any person who wilfully discloses any such information as is referred to in section 21 in contravention of the
provisions of that section shall, on complaint made by or on behalf of the trade union or individual business
affected, 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.
End of Document
Penalty for Closure without Notice [Section 30A]
Learning Objectives
his workmen;
PENALTY FOR CLOSURE WITHOUT NOTICE [SECTION 30A]— Updated On 08-01-2019
Any employer who closes down any undertaking without complying with the provisions of section 25FFA shall be
punishable with imprisonment for a term which may extend to six months, or with fine which may extend to five
thousand rupees, or with both.
End of Document
Penalty for Other Offences [Section 31]
Learning Objectives
his workmen;
PENALTY FOR OTHER OFFENCES [SECTION 31]— Updated On 08-01-2019
(1) Any employer who contravenes the provisions of section 33 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.
(2) 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 one hundred rupees.1
Page 2 of 2
Penalty for Other Offences [Section 31]
1 Uttar Pradesh State Sugar Corpn. v. Om Prakash Upadhyay, (2002) 1 Lab LJ 241 : (2002) 10 SCC 89, section 31 was
introduced by the Amendment of 1956, the Act is not to override state laws in force before commencement of the Act.
The UP Industrial Disputes Act, 1947 did not contain provisions similar to section 2(oo)(bb). The termination the service
governed by the UP Act, therefore, resulted in retrenchment.
End of Document
Offence by Companies etc. [Section 32]
Laws > PART I THE INDUSTRIAL DISPUTES ACT, 1947 > Miscellaneous Matters
Learning Objectives
his workmen;
CHAPTER 11 Miscellaneous Matters
OFFENCE BY COMPANIES ETC. [SECTION 32]— Updated On 08-01-2019
Where a person committing an offence under this Act is a company, or other body corporate, or an association of
persons (whether incorporated or not), every director, manager, secretary, agent or other officer or person
concerned with its management shall, unless he proves that the offence was committed without his knowledge or
consent, be deemed to be guilty of such offence.1
Page 2 of 2
Offence by Companies etc. [Section 32]
1 See Rabindra Chaursia v. Registrar of Cos., (1992) 1 Lab LJ 313 : AIR 1992 SC 398 [LNIND 1991 SC 608],
proceedings under Employees Provident Fund Act, 1952 and those under section 633 of the Companies Act, 1956
cannot be brought under this section.
End of Document
Conditions of Service, etc. to Remain Unchanged under Certain
Circumstances During Pendency of Proceedings [Section 33]
Learning Objectives
his workmen;
CONDITIONS OF SERVICE, ETC. TO REMAIN UNCHANGED UNDER CERTAIN CIRCUMSTANCES DURING PENDENCY OF
PROCEEDINGS [SECTION 33]— Updated On 08-01-2019
According to section 33, during the pendency of any conciliation proceeding 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—
Page 2 of 9
Conditions of Service, etc. to Remain Unchanged under Certain Circumstances During Pendency of
(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. (1)
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 workmen—
(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, whether by dismissal or otherwise,
that workman.
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 (2).2
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 proceeding; 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 trade union connected with
the establishment, is recognised as such in accordance with rules made in this behalf. (3)
In every establishment, the number of workmen to be recognised 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 one hundred protected workmen and for the aforesaid purpose,
Page 3 of 9
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 recognised as protected workmen. [s. 33(4)].
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 three 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 had expired without such proceedings being completed.
By passing an order of discharge or dismissal, de fecto to relationship of employer and employee is ended, but not
de jure, for that could happen when the Tribunal accords its approval. The employee thus gets factually
unemployed from the date of approval application in the sense that he is not called to work and is paid only a
month’s wage representing the succeeding month of his unemployment. The relationship of employer and
employee is legally not terminated till approval of discharge or dismissal is given by the Tribunal.
During pendency of management’s application for permission to dismiss workmen before the tribunal, the
relationship of master-servant subsists and therefore, the management has to pay subsistence allowance to
workmen during such pendency.3 Employer may have the right to suspend employee, employee will have the
corresponding right to receive subsistence allowance during period of suspension.4
If the Tribunal were to refuse approval merely on the ground that statutory tax deduction stands in the way to grant
of approval, it respecting the same subject-matter for non-availing of the alternate remedy before the forum of U.P.
Public Services Tribunal, is also a valid reason.5
Workman should not suffer consequences of invalid order of dismissal till matter is decided, by the tribunal in
industrial dispute. Respondent workman was dismissed from service after departmental enquiry and when
employer filed application for approval of order of dismissal, tribunal rejected the application on the ground that the
employer failed to establish prima facie case for dismissal, it was held that consequence of such rejection would be
that the employer will become duty bound to treat employees as continuing in service and pay wages for period in
question even though placed in suspension subsequently.6
When the first application for approval of order of dismissal was held invalid for non-compliance with the section
and was not approved, the employer passed second order of dismissal subsequently and sought approval second
time, it was held that it was not open to employer to make such second application, especially without paying full
wages due to workmen for period between first and second dismissal.7
Proviso to section 33(2)(b) affords protection to a workman. It is a shield against unfair labour practice by employer
during pendency of an industrial dispute.8
In a case, a cash clerk in the commercial wing of a bank (appellant) was dismissed from service on conclusion of
departmental proceedings against him for certain irregularities committed by him. He challenged the dismissal as
void for omission on the part of the appellant-bank to seek approval under section 33(2)(b) as there was a pending
dispute before the concerned authority. The High Court declared the dismissal to be void. The bank filed an appeal
Page 4 of 9
against the decision, the Supreme Court held that section 33(2)(b) was a shield against unfair labour practice by
employer during pendency of an industrial dispute, and therefore, the order under appeal did not suffer from any
infirmity.9
Maintenance of Peace during Pendency of Proceedings
The object of section 33 is to protect the workmen concerned in disputes which form the subject matter of pending
proceedings against victimization by the employer on account of their having raised industrial disputes or their
continuing the pending proceedings. The further object of the section is to ensure that proceedings in connection
with industrial disputes already pending should be brought to a termination in a peaceful atmosphere and that no
employer should, during the pendency of those proceedings, take any action of the kind mentioned in the section
which may give rise to fresh disputes likely to further exacerbate the already strained relations between the
employer and the workmen.
Procedure for Changing Conditions
Under the section 33(1) if an employer wants to change the conditions of service in regard to a matter connected
with a pending dispute, or to take any action against an employee on the ground of an alleged misconduct
connected with the pending dispute, he cannot do so unless he obtains previous permission in writing of the
appropriate authority.
Section 33(2) deals with the alternation in the conditions of service as well as discharge or dismissal of workmen
concerned in any pending dispute where such alternation or such discharge or dismissal is in regard to a matter not
connected with the pending dispute.
Where the employer has a preliminary objection that s. 33 does not apply, he can make an application without
prejudice to his objection.
Where an employee has been suspended pending inquiry or his service terminated as a contractual measure or on
account of real closure, or retrenchment, no application under this provision is necessary.
Workmen Concerned in the Dispute
This expression includes all workmen on whose behalf the dispute has been raised as well as those who would be
bound by the award which may be made in the dispute. It is wider than the phrase ‘party to the suit.’ All workmen
irrespective of membership of union are workmen concerned. Workmen subsequently employed are also workmen
concerned.
Workmen not Concerned
Workmen employed in certain queries would not be workmen concerned in a dispute between the workers in a
cement factory and the management of that factory, though the proprietor may be the same. The workmen, who are
not members of the union and to whom no general notice requiring their appearance was issued, were not
considered to be ‘workmen concerned in the dispute’ within the meaning of s. 33 of the Act.
Scope of Inquiry when Application for Permission is Made to Tribunal
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 to consider whether a prima facie case has been made out by
the employer for the dismissal of the employee in question. The Tribunal may either grant the permission or refuse
it according as it holds that a prima facie case is or is not made out by the employer.
Page 5 of 9
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 were believed. While determining whether a prima facie case had
been made out, 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.
Judgment of a criminal court must be considered to be relevant and admissible. It certainly could furnish good
material to the industrial tribunal to form a prima facie opinion about the merits of the case before it. The acquittal of
an accused in a criminal case could not stand in the way of the industrial tribunal granting the permission if it finds
that the employer has made out a prima facie case on the evidence on record for the permission asked for.
In these proceedings it is not open to the tribunal to consider whether the action taken 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.
The industrial tribunal has no power to substitute another punishment for the one which was sought to be meted out
by the employer to the employee nor to impose any condition on the employer for grant of the requisite permission.
The nature and scope of proceedings under section 33 shows that removing or refusing to remove the ban on
punishment or dismissal of workmen does not bar the raising of an industrial dispute when as a result of the
permission granted by the Tribunal the employer punishes or dismisses the workmen.
If the permission is granted, the ban would be lifted and employer would be at liberty, if he chooses thereafter, to
deal out the punishment to the workmen. The permission granted under section 33 does not have the effect of
validating the action taken against the employee.
Scope of Enquiry
The Tribunal does not function merely as a Court of Appeal weighing or reappraising evidence. For the purpose of
granting or refusing approval under section 33(2) of the Act, the Tribunal only examines the findings of the enquiry
officer in order to find out whether there is a prima facie case or whether the findings of the enquiry officer are
perverse. A prima facie case is not a case proved to the hilt. If the employer has held a proper enquiry into the
alleged misconduct of the employee following the principles of natural justice and it does not appear that the
proposed award does not amount to victimisation or an unfair labour practice, the other ground on which the
tribunal can interfere is only when there is no legal evidence at all recorded in the domestic enquiry as if no
reasonable person can arrive at a conclusion of guilt on the evidence recorded in the domestic enquiry.
If the Tribunal refuses approval, the employer would be precluded from punishing or discharging the workmen.
However, if approval is granted, that would not validate the action of discharge or dismissal. Permission or approval
would only remove the ban but the validity of the order would till be liable to be decided in a reference at the
instance of the workman under section 10 or section 2(A) of the Act.
In a case involving justification of ex parte enquiry, it was held by the Supreme Court that where the employee had
failed to participate in enquiry proceedings despite three opportunities given to him and due to which the enquiry
officer proceeded with the enquiry ex parte resulting in dismissal of the employee, tribunal was incorrect in holding
that three barren dates in an in-house proceedings do not amount to delay. The Supreme Court held that in-house
proceedings should be conducted expeditiously without any undue loss of time. The tribunal had reinstated the
employee with full back wages on the ground that domestic enquiry suffered from violation of principles of natural
justice as it was the duty of the enquiry officer to found from the employer whether or not any intimation was
Page 6 of 9
received from delinquent and the enquiry officer should have given him yet another chance to lead evidence in
rebuttal.
Subsequent acquittal by criminal court does not render completed disciplinary proceeding invalid. It also does not
affect validity of finding of guilt or consequential punishment.
Judicial review of findings of disciplinary authority can be conducted only where principles of natural justice or
statutory regulations have been violated or where order is arbitrary, capricious, mala fide or based on extraneous
considerations. Principles of natural justice cannot be stretched to a point where they render in-house proceedings
unworkable.
Refusal of Permission and its Effect
The settled position of law that the permission should be refused if the Tribunal is satisfied that the management’s
action is not bona fide or that the principles of natural justice have been violated or that the materials on the basis of
which the management came to a certain conclusion could not justify any reasonable person in coming to such a
conclusion. The workman continues in employment and claim for wages will be maintainable.
Protected Workmen
The protected workmen cannot be proceeded against without obtaining permission for dismissal, discharge or
punishment from the Tribunal. The law relating to protected workmen is contained in section 33(3) of Industrial
Disputes Act read with rule 61 of the Industrial Disputes (Central) Rules.
For the purpose of this sub-section, a ‘protected workman’, in relation to an establishment, means a workman who,
being an officer of a registered trade union connected with the establishment, is recognised as such in accordance
with rules made in this behalf.
In every establishment, the number of workmen to be recognised as protected workmen for the purposes of sub-
section (3) shall be one per cent of the total number of workmen employed in it subject to a minimum number of five
protected workmen and a maximum number of one hundred protected workmen and for this 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
recognised as protected workmen.
Disciplinary Action for Misconduct not Connected with Dispute
When an employer wants to dismiss or discharge a workman for alleged misconduct not connected with the
dispute, he can do so in accordance with the Standing Orders but a ban is imposed on the exercise of this power by
the proviso. The proviso requires that no such workman shall be discharged or dismissed unless two conditions are
satisfied, the first is that the employee concerned should have been paid wages for one month, and the second is
that an application should have been made by the employer to the appropriate authority for approval of the action
taken by the employer.
Where a workman is dismissed by the management for committing theft, such punishment is not disproportionate to
the gravity of the misconduct. Even the fact that such workman had put in long years of unblemished service will not
mitigate the gravity of misconduct.
If a workman is suspended pending application under the section 33(3), his right to receive reasonable amount
Page 7 of 9
fixed either under the Standing Orders or by the inquiring authority by way of subsistence allowance should be
implied as a term of the contract of employment.
Discharge Simpliciter
A discharge which is by way of punishment would fall under the second category, viz., that of punishment, and a
discharge which is otherwise than by way of punishment, would fall under the first category, viz., discharge
simpliciter. Discharge of workman simpliciter whether it is justified or not would not amount to alteration of the
conditions of service of the concerned workman within the meaning of section 33(2)(a) of the Act and would not,
therefore, attract it. Similarly, the provisions do not apply to retrenchment.
Limitations Imposed by Section 33
The limitation imposed by this section is that the Standing Orders will have to be complied with. It cannot however
be contended that section 33(2) has no application to a case where there are no Standing Orders. The existence of
Standing Orders is a prerequisite to the exercise of the powers by the management, and the absence of Standing
Orders will not place in a better position so as to claim exemption from the operation of the said provision. Model
standing orders will also apply.
Payment of one-month wages is a mandatory condition. An offer of payment is sufficient compliance with the
provisions.
Stage of Application
According to the Calcutta High Court, the payment of wages and the making of the application should be
simultaneous with the order of discharge or dismissal.
The Supreme Court has observed the 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 the order passed by the appropriate authority in an enquiry under the proviso.
Proceedings under Section 33 are Independent
Proceedings under the section are totally independent proceedings. They will not die with the death of the reference
or its culmination into an award. The argument that the proceedings if continued beyond the date of the final
decision of the main industrial dispute would become futile and meaningless cannot be accepted. The Tribunal
does not become functus officio?
Withdrawal of Application
Where the industrial tribunal permitted the concerned workmen to withdraw their complaints under section 33-A of
the I.D. Act without prejudice to their objections to the application for approval, they were not barred from objecting
to the grant of approval, on the ground that order on section 33-A applications got the force of an award.
Scope of Inquiry under Section 33(2) in Approval Proceedings
The jurisdiction of the appropriate industrial authority in holding an inquiry under section 33(2)(b) is not wider and
more limited than that permitted under section 33(1), and in exercising its powers under Section 33(2) of the Act,
the appropriate authority must bear in mind the departure deliberately made in separating the two classes of causes
falling under the two sub-sections, and in providing for express permission in one case and approval in other. No
interference in punishment can be done.
Page 8 of 9
The Supreme Court held in Dharampal v. National Engg. Industries Ltd. that the finding and its approval that the
contents of the pamphlet distributed by the employee were neither true nor correct and, therefore, the charge stood
proved could not have been interfered with by the High Court in writ jurisdiction under Articles 226, 227 of the
Constitution. The appropriate remedy is to seek reference under s. 10.
Where application for approval of order of dismissal was approved by the industrial tribunal, and the single judge of
High Court held the tribunal to have committed error while granting approval, the Supreme Court held that he was
not justified in holding the same.
Complaints Regarding Contravention of Section 33
Section 33A provides a summary remedy for adjudication of disputes arising out of contravention of statutory
safeguards and protection given under section 33 of the Act to employees during the pendency of conciliation or
adjudication proceedings. By section 33A an employee aggrieved by a wrongful order of dismissal passed against
him in contravention of section 33 is given a right to move the tribunal in redressal of his grievance without having to
take recourse to section 10 of the Act.
Who can Make Complaint?
An aggrieved workman against whom action is taken can make a complaint under section 33 of the Act. A
complaint filed by a union or its secretary duly authorised by the aggrieved workman must be held to have been
properly presented. In the absence of any proof to show that the office bearer of the union was authorised to prefer
the complaint, it cannot be considered to be a valid complaint. No complaint can be preferred if no industrial dispute
exists. It is not necessary that when the complaint is made, the main dispute should be pending.
Inquiry is Co-extensive with Inquiry under Section 10
The scheme of the section clearly indicates that the authority to whom the complaint is made is to decide both the
issues, viz., (i) the effect of contravention, and (ii) the merits of the act or order of the employer.
Since the scope of section 33A is co-extensive with s. 10, the employee would not succeed in obtaining an order of
reinstatement merely by proving contravention of section 33 by the employer. After such contravention is proved it
would still be open to the employer to justify the impugned dismissal on merits. The Tribunal has power to order
reinstatement in such proceedings.
2 Where approval is not granted for order of discharge or punishment, by dismissal or otherwise, of workman during
pendency of industrial disputes proceedings, for alleged misconduct not connected with such dispute, the order
becomes in effective from the date on which it was passed, not making application for such approval or withdrawing it
amount to a clear case of contravention of statutory requirement, Jaipur Zila Sahakari Bhoomi Vikas Bank Ltd. v. Ram
Gopal Sharma, (2002) I LLJ 834 : AIR 2002 SC 643 [LNIND 2002 SC 44].
3 Ram Lakhan v. Presiding Officer, (2001) I LLJ 449 : AIR 2001 SC 286.
4 Ibid.
5 S. Ganapathy v. Air India, (1993) II LLJ 731 (SC).

Page 9 of 9
6 Tamil Nadu State Transport Corpn. v. Neethivilangan, Kumbakonam, (2001) I LLJ 1706 : AIR 2001 SC 2309 [LNIND
2001 SC 1181].
7 Indian Telephone Industries Ltd. v. Prabhakar H. Manjuare, (2002) III LLJ 1134 : AIR 2003 SC 195.
8 United Bank of India v. Sidhartha Chakraborty, (2007) III LLJ 782 : AIR 2007 SC 3071 [LNIND 2007 SC 1009].
9 Ibid.
End of Document
Special Provision for Adjudication on Fact of Variance [Section 33A]
Learning Objectives
his workmen;
SPECIAL PROVISION FOR ADJUDICATION ON FACT OF VARIANCE [SECTION 33A]— Updated On 08-01-
2019
Where an employer contravenes the provisions of section 33 during the pendency of proceedings before a
conciliation officer, Board, an arbitrator, Labour Court, Tribunal or National Tribunal any employee aggrieved by
such contravention, may make a complaint in writing, in the prescribed manner—
Page 2 of 2
Special Provision for Adjudication on Fact of Variance [Section 33A]
(a) to the conciliation officer or Board, who shall take such complaint into account in mediating in, and
promoting the settlement of, the industrial dispute, and
(b) to the arbitrator, Labour Court, Tribunal or National Tribunal and on receipt of such complaint, the deciding
authority shall adjudicate upon the complaint as if it were a dispute referred to or pending before it, in
accordance with the provisions of the Act and shall submit his or its award to the appropriate Government
and the provisions of the Act shall apply accordingly.44
44 See Cipla Ltd. v. R. Jayakumar, (1998) 1 Lab LJ 460 : (1999) 1 SCC 300, transfer not allowed to be questioned
because no ill motives were shown. Md. Akhtar Hussain v. State of Bihar, (1988) 1 Lab LJ 325 (SC), removal for
misconduct without inquiry during pending proceedings before Industrial Tribunal, workman directed to be reinstated
with 50% back wages.
End of Document
Power to Transfer certain Proceedings [Section 33B]
Learning Objectives
his workmen;
POWER TO TRANSFER CERTAIN PROCEEDINGS [SECTION 33B]— Updated On 08-01-2019
According to section 33B, the appropriate Government may, by order in writing and for reasons to be recorded,
withdraw any proceeding under the Act pending before a Labour Court, Tribunal or National Tribunal and transfer
the same to another Labour Court, Tribunal or National Tribunal, as the case may be, for disposal of the proceeding
and the Labour Court, etc. to which the proceeding is so transferred may, subject to special directions in the order
of transfer, proceed either de novo or from the stage at which it was so transferred.
Page 2 of 2
Power to Transfer certain Proceedings [Section 33B]
Where a proceeding under section 33 or section 33A is pending before a Tribunal or National Tribunal, the
proceeding may also be transferred to a Labour Court. [SECTION 33B(1)].45
Without prejudice to the provisions of sub-section (1), any Tribunal or National Tribunal, if so authorised by the
appropriate Government, may transfer any proceeding under section 33 or section 33A pending before it to any one
of the Labour Courts specified for the disposal of such proceedings by the appropriate Government by notification in
the Official Gazette and the Labour Court to which the proceeding is so transferred shall dispose of the same
accordingly [Section 33B(2)].
The language of section 33-B does not suggest that the transfer permitted by the provision is only from a Labour
Court to a Labour Court, from a Tribunal to another Tribunal and from a National Tribunal to another National
Tribunal. The section provides that the Government can withdraw a proceeding pending under this provision. The
expression “as the case may be” clearly indicates as the facts of the particular case demand. Therefore, if in a given
case, the State Government is informed that a reference which is already made by it to a Labour Court, is likely to
involve more than 100 workmen and, therefore, ultimately does not result in the settlement of the dispute referred
for adjudication in order to achieve that purpose and object of the Act which is investigation and settlement of
industrial disputes, the Government has been given the power to transfer the reference to an Industrial Tribunal,
recording the reasons for doing so, for, in such a case transfer from one Labour Court to another Labour court
would be purposeless and futile. The words “as the case may be” cannot be understood to mean “respectively” if
the intention of the Legislature was that a transfer must be permitted only from a Labour Court to another Labour
Court or from a Tribunal to another Tribunal and from a National Tribunal to another National Tribunal, the
Legislature would have used that expression but the Legislature has designedly used the words “as the case may
be” in order to make the provision flexible and give the power to the Government to transfer from one forum to
another, as the circumstances and facts of the case may demand.46
45 Where the pending proceeding was transferred from Labour Court of one place to that of another and without any
information or opportunity to the management, the order of the Government was initiated. It was not necessary to prove
malafide or prejudice, M.S. Nally Bharat Engg. Co. v. State of Bihar, (1990) 2 LLJ 211 [LNIND 1990 SC 72] : (1990) 2
SCC 48 [LNIND 1990 SC 72].
46 Management of Senapati Whitely Ltd. v. State of Karnataka, 1984 LIC, p. 1890 (Dec).
End of Document
Recovery of Money due from an Employer [Section 33-C]
Learning Objectives
his workmen;
RECOVERY OF MONEY DUE FROM AN EMPLOYER [SECTION 33-C]— Updated On 08-01-2019
Where any money is due to a workman from an employer under a settlement or an award or under the provisions of
Chapter VA or Chapter VB, the workman himself or any other person authorised 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 certificate for that amount to the
Collector who shall proceed to recover the same in the same manner as an arrear of land revenue.
Page 2 of 4
Every such application shall be made within one year from the date on which the money became due to the
workman from the employer.
Any such application may be entertained after the expiry of the period of one year, if the appropriate Government is
satisfied that the applicant had sufficient cause for not making the application within the said period [Section
33C(1)].
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 any 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 within a period not
exceeding three months.47 [section 33C(2)]. Where the presiding officer of a Labour Court considers it necessary,
he may, for reasons to be recorded in writing, extend the period by such further period as he may think fit. Where
the Municipal Council who was the employer did not dispute the liability to pay but claimed inability to meet the
demand due to financial constraints caused by withdrawal of octroi duty, direction of the High Court to make
payments to employees was confirmed when the State Government re-imposed octroi duty.48
For the purposes of computing the money value of a benefit, the Labour Court may, if it so thinks fit, appoint a
Commissioner who shall, after taking such evidence as may be necessary, submit a report to the Labour Court and
the latter shall determine the amount after considering the report of the Commissioner and other circumstances of
the case [section 33C(3)]. The decision of the Labour Court shall be forwarded by it to the appropriate Government
and any amount found due by the Labour Court may be recovered in the manner provided for in the same manner
as arrears of land revenue [section 33C(4)]. 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 [section 33C(5)].
An Explanation to the section says that 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.
Amount must be Duly Determined before being Claimed
In Kasturi & Sons (Private) Ltd. v. Salivateeswaran, a case arising under section 17 of the Working Journalists
(Conditions of Service and Miscellaneous Provisions) Act, 1955 which, to the extent now material, is similar in terms
to section 33C(1), of the Industrial Disputes Act, the Supreme Court held that the condition precedent of the
application of section 17 was prior determination of the amount due. It was only after the amount due to the
employee had been duly determined that the stage to recover that amount was reached, and it was at this stage
that the employee was given the additional advantage provided by section 17 without prejudice to any other mode
of recovery available to him. According to this view, the State Government, or the specified authority has only to
hold a summary enquiry on a very narrow and limited point: is the amount which was found due to the employee
still due when the employee makes an application under section 17 or, has any amount been paid, and, if so, how
much still remains to be paid? The scope of the enquiry permitted by this section does not include the examination
and decision of the merits of the claim made by the employee. When the section refers to the application made by
the employee for the recovery of the money due to him, it really contemplates the state of execution which follows
the passing of a decree or the making of an award or order by an appropriate court or authority. It seems that this
will apply with equal force to the interpretation of section 8 also.
Meaning of the word ‘Entitled’
In Ramkrishan Ramnath Bidi Manufacturing, Kamptee v. Labour Court, Nagpur, the Bombay High Court held that
the expression “entitled to receive” meant no more than what it primarily connoted, i.e., an existing debt or liability.
Recoverability implied some authority or agency.
Page 3 of 4
Benefits under Other Laws are also Recoverable
In Central Bank of India Ltd. and Others v. Rajagopalan (P.S.), the Supreme Court observed: “In our opinion on a
fair and reasonable construction of subsection (2), it is clear that if a workman’s right to receive the benefit is
disputed, that may have to be determined by the labour court. Before proceeding to compute the benefit in terms of
money, the labour court inevitably has to deal with the question as to whether the workman has a right to receive
that benefit. If the said right is not disputed, nothing more needs to be done and the labour court can proceed to
compute the value of the benefit in terms of money; but if the said right is disputed the labour court must deal with
that question and decide whether the workman has the right to receive the benefit as alleged by him and it is only if
the labour court answers this point in favour of the workman that the next question of making the necessary
computation can arise. It seems to us that the opening clause of sub-section (2) does not admit of the construction
for which the appellant contends unless we add some words in that clause.
Scope of Section 33C(2)
It is wider than section 33C(1) of the Act. An application for retrenchment compensation is maintainable before the
Labour Court. There is no limitation for claims under section 33C and the remedy is in addition to other remedies
under the Payment of Wages Act or Minimum Wages Act. The matters, which can be decided under section 10(1)
cannot be adjudicated under section 33C(2) of the Act.
Summary of Propositions Evolved
The question regarding the maintainability of an application under section 33C(2) has come up for consideration
before the Supreme Court in a number of matters. The broad propositions, which emerge from the decisions, may
be formulated as under:
1. A proceeding under section 33C(2) is by and large analogous to an execution proceeding in a Civil Court in
the sense that the Labour Court will not create a right for the first time or confer a right for the first time in
the course of such a proceeding. It will only proceed to recover the money or the benefit which is capable
of being computed in terms of money in case the right is an existing right which has merely to be given
effect to.
2. Whilst exercising jurisdiction under section 33C(2) the Labour Court is not restricted merely to the making
of an arithmetical computation of the money claim or the benefit which is capable of being computed in
terms of money. The Labour Court has also the jurisdiction to decide incidental questions which are
necessary in order to make the provision effective and enable the workers to effectively recover the money
or the benefit. The Labour Court will have the jurisdiction to decide ancillary matters if necessary by
recording evidence with this end in view.
3. The jurisdiction of the Labour Court will not be lost merely because the employer resists the claim or
denies the existence of the right claimed by the employees. For the purpose of jurisdiction the matter will
be governed by the assertion of the claim by the applicants subject to their being able to make good their
claim. In other words, their application will not be thrown out at the threshold merely because the
employers say that there is no existing right or that the employees are not entitled to make such a claim. If
ultimately at the conclusion of the proceedings, the Labour Court reaches the conclusion that there is no
existing right or that the workmen are not entitled to the claim, the application would of course be rejected.
4. If a dispute is a collective dispute involving collective bargaining, it would fall under section 10(1) and not
under section 33C(2).
5. The Labour Court in exercise of its powers under section 33C(2) can interpret a bipartite agreement.
Page 4 of 4
Claim must be Duly Determined
The proceeding under section 33-C(2) is in the nature of execution proceeding. The right of the workman to the
money claimed in such application must be an existing right that is to say, a right already adjudicated upon. Where
it is an undetermined claim, the Labour Court has no jurisdiction to adjudicate it under section 33-C(2) of the I.D.
Act. Application under section 33-C(2) is maintainable only when workman establishes that he has legal right
regarding his claim for recovery of money due from employer. Employer has the liberty to raise all defencss against
the claim of workers. In a case, when after determining wages for a worker in earlier proceedings, the labour court
directed appellant worker to approach authorities for seeking reference under section 10 to determine wages, such
a direction was set aside and it was held that wages will be paid in terms of determination in earlier proceedings.
47 Labour Court has the power to interpret the award and then work out the wages payable to the workmen concerned in
terms of the award, but has no power to adjudicate upon fresh claims or to give directions on that basis, Union of India
v. Gurbachan Singh, (1997) 2 Lab LJ 827 : AIR 1997 SC 2641 [LNINDORD 1997 SC 23]. The Labour Court has no
power under the section to decide whether the suspension period is to be treated as on duty period or otherwise,
Management, RBI v. Bhopal Singh Panchal, (1994) 1 Lab LJ 642 : AIR 1994 SC 552 [LNIND 1993 SC 931]. Where the
Labour Court ordered that the appellant continued to be the employee of the respondent, the order not having been
challenged, attained finality, Mahesh Narsayya Chinlal v. Executive Engr., Jayakwadi Project, (1995) 1 Lab LJ 445 :
1994 Supp (3) SCC 255. A claim after a gross delay could not be entertained, Co-operative Stores Ltd. v. K.S.
Khurana, (1996) 2 Lab LJ 682 (SC). Minimum wages can be recovered by filing an application under s. 33C(2). The
time-limit prescribed under s. 20(2) of the Minimum Wages Act is not applicable to a petition under s. 33C(2) of the ID
Act. An agreement under which piece rate was accepted by the workman by giving up the benefit of the MW Act was
held to be void, (1984) 2 Lab LJ 385 (SC). See State Bank of India v. Ram Chandra Dubey, (2000) 1 SCC 73 : (2000) 2
LLJ 1660 [LNIND 2000 SC 1528], jurisdiction of the Labour Court under s. 33-C(2) extends to the computation of a
preexisting benefit or one flowing from a pre-existing right and not to computation of a benefit which is considered just
and fair.
48 Nagar Council, Kapurthala v. Davinder Kumar, (2012) 10 SCC 280.
End of Document
Cognizance of Offences [Section 34]
Learning Objectives
his workmen;
COGNIZANCE OF OFFENCES [SECTION 34]— Updated On 08-01-2019
No Court can take cognizance of any offence punishable under this Act or of the abetment of any such offence,
save on complaint made by or under the authority of the appropriate Government. Under section 34 of the Industrial
Disputes Act, 1947, there is no limitation is regard to the party to whom the authorisation 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 of public policy require that they should be excluded from making such complaints.
The provisions of section 34 are in the nature of a limitation on the entitlement of a workman or trade union or an
Page 2 of 2
Cognizance of Offences [Section 34]
employer to complain of offences under the said Act. They should not, in public interest, be permitted to make
frivolous, vexation or otherwise patently untenable complaints and to this end section 34 requires that no complaint
shall be taken cognizance of unless it is made with the authorisation of the appropriate Government.
Section 39 empowers the appropriate Government to delegate the powers exercisable by it under the Act. This is
altogether different form the concept of authorisation to file a complaint under section 34. If the powers under
section 34 have been delegated under section 39 the delegate can file the complaint himself or authorise someone
else to file it. The words “or under the authority of” necessarily must be given due meaning and the meaning is that
the appropriate Government may authorise someone other than itself, even a non-Government servant, to file a
complaint under section 34.57
No Court inferior to that of a Metropolitan Magistrate or a Judicial Magistrate of the first class can try any offence
punishable under the Act.
57 Raj Kumar Gupta v. Lt. Governor, Delhi, [1997] I LLJ 994 : (1997) 1 SCC 556 [LNIND 1996 SC 1833].
End of Document
Protection of Persons [Section 35]
Learning Objectives
his workmen;
PROTECTION OF PERSONS [SECTION 35]— Updated On 08-01-2019
No person refusing to take part or to continue to take part in any strike or lockout which is illegal under this Act
shall, by reason of such refusal or by reason of any action taken by him under this section, be subject to expulsion
form any trade union or society, or to any fine or penalty, or to deprivation of any right or benefit to which he or his
legal representatives would otherwise be entitled, or be liable to be placed in any respect, either directly or
indirectly, under any disability or at any disadvantage as compared with other members of the union or society,
anything to the contrary in the rules of a trade union or society notwithstanding. [section 34(1)].
Page 2 of 2
Protection of Persons [Section 35]
Any provisions in the rules of a trade union or society requiring the settlement of disputes in any manner shall not
apply to any proceeding for enforcing any right or exemption secured by this section. In any such proceeding the
Civil Court may, in lieu of ordering a person who has been expelled from membership of a trade union or society to
be restored to membership, order that he be paid out of the funds of the trade union or society such sum by way of
compensation or damages as that court thinks just. [section 35(2)].
End of Document
Representation of Parties [Section 36]
Learning Objectives
his workmen;
REPRESENTATION OF PARTIES [SECTION 36]— Updated On 08-01-2019
According to section 36, a workman who is a party to a dispute shall be entitled to be represented in any
proceeding under this Act by—
(a) any member of the executive or other office bearer of a registered trade union of which he is a member;
Page 2 of 2
Representation of Parties [Section 36]
(b) any member of the executive or other office bearer of a federation of trade unions to which the trade union
is affiliated;
(c) where the worker is not a member of any trade union, by any member of the executive or other office
bearer of any trade union connected with, or by any other workman employed in, the industry in which the
worker is employed and authorised in such manner as may be prescribed.
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 to which he is a member;
(b) an officer of a federation of association 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 authorised in such manner as may be prescribed.
Parties to a dispute are not entitled to be represented by a legal practitioner in any conciliation proceedings under
the Act or in any proceedings before a court. [section 36(3)].
In any proceeding before a Labour Court, Tribunal or National Tribunal, a party to a dispute may be represented by
a legal practitioner with the consent of the other parties to the proceeding and with the leave of the Labour Court,
Tribunal or National Tribunal, as the case may be. [section 36(4)].
Before a Labour Court or Industrial Tribunal, workmen can be represented by an executive or office bearer of the
Trade Union while the employer can be represented by the association of employers or its executive. The
management has officers like Deputy Manager (Law), Asst. Manager (Law) etc., who are qualified law graduates.
The management is competent to engage any one of them to defend their case against one of their own workmen.
However, employer is justified in approaching the Federation of Chamber of Commerce to contest a case of a
workman of its own corporation.58
When some of the dismissed striking workmen made a settlement with the management in their individual
capacities and workmen, not a signatory to settlement, challenged the order of dismissal, it was held that where the
settlement is reached by individual workmen in their individual capacity, it is not binding on the workman who is not
a party to it.59
58 R.M. Duraiswamy v. Labour Courts, Salem, 1998 LLR 478 (16).
59 Ameteep Machine Tools v. Labours Court, (1980) II LLJ 453 : AIR 1980 SC 2135 [LNIND 1980 SC 399].
End of Document
Power to Remove Difficulties [Section 36A]
Learning Objectives
his workmen;
POWER TO REMOVE DIFFICULTIES [SECTION 36A]— Updated On 08-01-2019
If, in the opinion of the appropriate Government, any difficulty or doubt arises as to the interpretation of any
provision of an award or settlement, it may refer the question to such Labour Court, Tribunal or National Tribunal as
it may think fit.
The Labour Court, Tribunal or National Tribunal to which such question is referred has to decide the question after
giving the parties an opportunity of being heard and its decision shall be final and binding on all the parties.
Page 2 of 2
Power to Remove Difficulties [Section 36A]
End of Document

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Date and Time: Monday, February 5, 2024 12:24:00 PM IST

Job Number: 216227840

1. Short Title, Extent and Commencement [Section 1]

PART I THE INDUSTRIAL DISPUTES ACT, 1947

In Part I on Industrial Disputes Act, 1947, students will be able:

5. To understand procedure, powers and duties of authorities under the Act;

8. To understand the procedure of inquiry and investigation in relation to industrial disputes;

SHORT TITLE, EXTENT AND COMMENCEMENT [SECTION 1]— Updated On 08-01-2019

1 Subs. by Act 36 of 1956, section 2 for sub-section (2) (w.e.f. 29-8-1956).

PART I THE INDUSTRIAL DISPUTES ACT, 1947

In Part I on Industrial Disputes Act, 1947, students will be able:

5. To understand procedure, powers and duties of authorities under the Act;

8. To understand the procedure of inquiry and investigation in relation to industrial disputes;

LEGISLATIONS BEFORE THE ACT OF 1947— Updated On 08-01-2019

1. Period between 1819 to 1930

2. Period between 1930 to 1940

3. Period from 1940 onwards

Period from 1819 to 1930

Period from 1930 to 1940

Period from 1940 onwards

(i) prohibit strike or lock-outs,

(ii) refer any dispute for conciliation or adjudication,

(iv) enforce the decisions of the adjudicators.

PART I THE INDUSTRIAL DISPUTES ACT, 1947

In Part I on Industrial Disputes Act, 1947, students will be able:

5. To understand procedure, powers and duties of authorities under the Act;

8. To understand the procedure of inquiry and investigation in relation to industrial disputes;

STATEMENT OF OBJECTS AND REASONS— Updated On 08-01-2019

PART I THE INDUSTRIAL DISPUTES ACT, 1947

In Part I on Industrial Disputes Act, 1947, students will be able:

5. To understand procedure, powers and duties of authorities under the Act;

8. To understand the procedure of inquiry and investigation in relation to industrial disputes;

OBJECTIVES OF INDUSTRIAL DISPUTES ACT— Updated On 08-01-2019

PART I THE INDUSTRIAL DISPUTES ACT, 1947

In Part I on Industrial Disputes Act, 1947, students will be able:

5. To understand procedure, powers and duties of authorities under the Act;

8. To understand the procedure of inquiry and investigation in relation to industrial disputes;

DEFINITIONS [SECTION 2]— Updated On 08-01-2019

(xvi) the Export Credit and Guarantee Corporation Limited, or

(xvii) the Industrial Reconstruction Bank of India Ltd., or

(xix) an air transport service, or

(xx) a banking or an insurance company, or

(xxi) a mine, an oil field, a Cantonment Board, or

(i) Only one Government can be appropriate Government for reference.

(iii) The industry should be carried on in a State.

Arbitrator [Section 2(AA)]

Average Pay [Section 2(AAA)]

‘Average pay’ means the average of the wages payable to a workman—

Award [Section 2(B)]

Banking Company [Section 2(BB)]

(i) the Export-Import Bank of India,

(ii) the Industrial Reconstruction Bank of India,

(iv) the Reserve Bank of India,

(v) the State Bank of India,

Two conditions are necessary for any company to be a banking company:-

Board (Section 2(C)]

Closure [Section 2(CC)]

Conciliation Officer [Section 2(D)]

Conciliation Proceeding [Section 2(E)]

Controlled Industry [Section 2(EE)]

Court [Section 2(F)]

Employer [Section 2(G)]

(iii) an association or a group of employers.

Executive [Section 2(GG)]