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Unfair labour practices with the

Tata Motors: Case Analysis

Chapter 1
INTRODUCTION

The structure of labour laws must include policies for resolving disputes,
regardless of the degree of economic development. This is because every working
relationship will inevitably result in complaints and disagreements; the goal of
policy is to provide procedures that deal with these issues quickly and effectively.
In contemporary conflict resolution policy, the utilization of voluntary processes
like arbitration, conciliation, and mediation has taken center stage. This is
because they have been successful in preserving relationships throughout the
dispute resolution process because they do not include the adversarial element
that typical litigation proceedings do.

The most valuable resource for any nation's economic prosperity is its labour
force. They receive pay as compensation for their contributions to the
manufacturing and production of goods and services. Together, an employer and
employee help to generate income and financial gain but the thought now is: Is it
so easy to work in peace and reap the rewards? No, there are always
disagreements between employers and employees in whatever type of
organization, public or private, on things like fair wages, flexible work schedules,
or union demands.

The Industrial Disputes Act was enacted on 11 th April, 1947 to guarantee and
avoid such disputes as well as for the benefit of labourers or workers and their
employers. The Act's primary goals are to uphold social justice and peace, foster

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goodwill between companies and employees, resolve labor disputes, and stop
unfair trade practices and illegal strikes.1

1.1 HISTORICAL CONTEXT

The Trade Disputes Act of 1929 governed the resolution of industrial disputes
prior to 1947. The 1929 Act's operation exposed several shortcomings that needed
to be fixed by new legislation. The Industrial Disputes Bill was consequently
brought before the legislature. A Select Committee has been tasked with
reviewing the legislation. The Select Committee's recommendations led to
changes to the original measure. In April 1947, the Industrial Disputes Act of
1947 was passed.

1.2 THE ACT'S PURPOSE

By establishing the framework and protocols for the examination and negotiation-
based resolution of labor disputes, the Industrial Disputes Act seeks to protect
industrial peace and harmony. The Act also establishes:

(a) The clause allowing for employee compensation in the event of layoffs, plant
closures, etc.

1 https://www.simpliance.in/blog/industrial-disputes-act-1947-labour-
law/#:~:text=The%20Industrial%20Disputes%20Act%2C%201947%20is%20the%20primary,during%20lay-
off%20or%20after%20retrenchment%20or%20wrongful%20dismissal. (Last visited 1/12/23)
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(b) The procedure for getting prior consent from the relevant government for
industrial establishment closures, layoffs, or retrenchments.

(c) Injustice in labor practices by an employer, a labor union, or employees.2

 Crucial Sections of the Act :-


 Explains terms related to industry, labor conflict, trade union, strike,
wages, retrenchment, lockout, and so forth.
 Offers mechanisms for examining and resolving conflicts via labor
courts, tribunals, courts of inquiry, conciliation officers, boards of
conciliation, and voluntary arbitration.
 The disagreement is referred for adjudication.
 Labor courts and tribunal awards.
 Paying employees while High Court cases are pending.
 Appeal rights.
 Agreements reached without conciliation.
 Notification of modifications to employment terms.
 Safety of employees while legal action is pending
 Lockout and strike protocols.
 Pay for being laid off
 Reduction in benefits.
 Retrenchment procedures.
 Workers' compensation in the event that an undertaking is transferred.
 Procedures for closure
 Reopening of projects that have been closed.
 Inequitable labor practices.

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 Recovering money owed to the employer.


 Sanctions
 Employee rights and obligations3

1.3 DEFINITION

The Industrial Disputes Act of 1947 is an Indian legislation that addresses the
resolution of industrial disputes. It outlines procedures for negotiation and
settlement, provides mechanisms for strikes and lockouts, and establishes
authorities for adjudication. The primary aim is to maintain industrial peace and
promote harmonious relations between employers and workers.

Section 2(k) - ‘Industrial Dispute” means any disagreement or conflict pertaining


to a person's employment, non-employment, terms of employment, or working
conditions is referred to as a "industrial dispute"; this can occur between
employers and workers, between employers and employers, or between workers
and workers;

Section 2(r)(a) - Unfair labour practices are defined as "any of the practices
specified under Schedule V of the act" under.

Section 25(t) - Unfair labour practices are prohibited for any employer, worker,
or trade union, regardless of their registration status under the Trade Unions Act.
Section 25(u) - Any individual who engages in unfair labour practices is subject
to punishment under this section of the Industrial Disputes Act, 1947, which
includes up to six months in jail, a fine of up to Rs. 1000, or both.4

3 https://lawessential.com/m%26a-deals-%26-cases-archive/f/unfair-labour-practices---a-study (Last visited


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4 The Industrial Disputes Act,1947(14 of 1947), Bare Act (Professional Book Publishers 2023)

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Chapter 2
UNFAIR LABOUR PRACTICES: ITS TYPES AND FEATURES

Before labour laws were established, employers had significant control over
workers. The Trade Union Act of 1926, the Factories Act of 1948, and the
Minimum Wages Act of 1948 were introduced to protect workers from
exploitation and unfair labor practices. These regulations acknowledged workers'
rights and aimed to ensure they were treated fairly.

An unfair labour practice is, simply put, a fraudulent act committed by an


employer or employee to make a profit that is prohibited by law.

▫ Unfair Labour Practices by Employers

The Industrial Disputes Act of 1947 says that both employers and trade unions
can do things that are unfair to workers, and it's not allowed.

The Fifth Schedule has a list of these unfair things.

Your employer is not allowed to do certain actions, and they are prohibited, such
as:

Employers cannot prohibit employees from joining or forming trade unions
or interfering with business operations.

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 Employers are not allowed to harass or control employees if they join a


union.5
 Employers may not harass employees for lawful lockouts or strikes,
Imposition of penalties or threat of dismissal.
 There is no discrimination or prejudice against labour unions forming a
trade union with the support of the employer.
 Denying an employee, a promotion because they support a union
 Promoting an unqualified employee in place of a qualified employee.
 Dismissal of an employee due to a false accusation by the worker or a
minor technical error
 Giving work to contractors rather than workers
 Malicious transfer of employee
 Hiring contract workers to reduce the salary and reimbursement n that full-
time employees must receive

Appointment of new workers in case of legal strike by existing workers
 Refusal to bargain collectively with labor unions
 Workers are not rewarded for their work causes violence among workers
 Discrimination against employees who report fraudulent or illegal conduct,
discrimination, or other conduct
 Payment of low wages for work assigned to workers
 Demotion of a worker because of the worker's involvement in union
activities
 Dismissal of employees belonging to a labor union6

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6
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▫ Unfair Labour Practices by Trade Unions

Not only are unfair labor practices carried out by employers, but trade unions may
also be complicit in unfair labor practices

The Fifth Schedule of the Industrial Disputes Act refers to the following acts that
are prohibited for trade unions:

 Encourage or support illegal strikes


 Coercing employees to become members of a labor union through
intimidation or pressure.
 Prohibits all workers who do not participate in an illegal strike from
entering the workplace
 The use of physical force against workers who choose not to take part in
strikes or lockouts.

The goal is not employee happiness

Refusal to bargain collectively on behalf of employees
 Breaking into an employer's home and causing damage to personal
property
 Encourage workers to destroy industrial facilities Unlawful strikes, like
engaging in deliberate slow work or "gherao" (encircling an employer to
press for workers' demands).
 Intimidation or harassment of employees coming to work7

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▫ Unfair Labour practices on the part of workmen or


workmen’s Trade unions

 Advise or actively encourage, incite or support a strike that is considered


illegal by law.
 Prevents employees from exercising their right to join a union or abstain
or organize in the following cases:
 The union should picket in such a way that non-striking workers are
physically prevented from entering their workplaces.
 Indulge in violence or threaten to do so in connection with a strike against
non-striking workers.
 A recognized union refuses to negotiate in good faith with the employer.
 Use coercive measures against the certification of negotiating
representatives.
 Encourage or incite coercive actions such as deliberate, "slowing down,"
squatting in the workplace after hours, or "gherao" by any executive or
other employee.
 Staging demonstrations at the employer's residence.
 Waiver of industrial damage intentionally caused to employer's property.
 Indulge in violence, abuse or threaten an employee to prevent them from
coming to work.8

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Chapter 3
LEGISLATIONS AND SETTLEMENT OF DISPUTES

 Legislations:

In India, most of the labor laws are regulated by the central government, but in
addition to that, the states have enacted legislation governing labor laws. Some
state labor laws include:

Bombay Labor Relations Act, 1946

The Bombay Labor Relations Act of 1946 started in April 1946 and applied to
the entire Maharashtra region. Its goal is to manage rules and settle disagreements
between employers and workers. This law governs how employers and
employees interact, deals with resolving disputes at work, and accomplishes
various other aims. It's important for handling situations between employers and
employees, updating laws for resolving work-related issues, and serving various
other purposes.

The Madhya Pradesh Labor Relations Act, 1960

This rule started in 1960. According to this rule, an employer cannot punish any
of its employees for taking part in legal union activities, like a strike or lockout.
The rule helps settle work-related problems and manages how employers and
employees interact in specific situations9

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The Maharashtra Recognition of Trade Unions and Prevention of Unfair


Labour Practices Act, 1971

Approved in 1971 and enforced in September 1975, this law was put in place by
the Government of India to regulate certain companies and foster better
understanding between employees and employers. The law aims to acknowledge
unions, encourage negotiations between groups, and prevent unfair treatment of
workers.

 Settlement:

Labor disputes are conflicts between an employer and its employees or


between employees and trade unions. The reasons may be unfair wages, long
working hours, unfair labor practices, inappropriate government machinery,
etc. Court proceedings are very time-consuming and expensive in our
country. Instead of resolving disputes in court, it is better to resolve the
dispute through alternative mechanisms. Labor market disputes can also be
resolved through alternative mechanisms, which are as follows:

 Collective Bargaining.

Collective bargaining is a friendly way to solve disagreements where the


involved parties work things out directly, without involving a third party. It's
considered the most acceptable method for resolving disputes. In collective
bargaining, a chosen union acts as the authorized representative for all
employees in negotiations with management. This approach is beneficial
fomboth employees and employers, ensuring the rights of workers and the
overall interests of the company are protected.10

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Collective bargaining serves as a means for social change, a peace agreement


between conflicting parties, and a framework in labor law. In a 1989 Supreme
Court case (Karol Leather Karamchari Sangathan v Liberty Footwear), it was
affirmed that collective bargaining is a process for amicably settling disputes
between employees and employers

 Mediation

Mediation is a way to solve disagreements without going to court. The parties


involved work out their issues with the help of a neutral mediator. This person
helps them reach a decision together. Mediation is quicker and cheaper than going
to court. When mediation is successful, it strengthens the relationship between
the parties because it protects the interests of both sides. Sections 4 and 5 allow
for the appointment of a conciliator to settle labor disputes. A mediator is a third
party who aims to peacefully resolve a dispute within the government.

 Voluntary arbitration

According to Section 10-A of the Act, parties have the option to make an
agreement for arbitration to settle disputes. Arbitration is a method of resolving
conflicts outside of the courtroom, involving a third party called an arbitrator.
The arbitrator's decision is final and must be followed by the parties. In the case
of Workmen Of Cement Industry v. Union Of India (1987), it was noted that
voluntary arbitration is a way to resolve labor disputes, reducing industrial
strikes and contributing to the economic development of the country by
involving workers.11

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Chapter 4
LANDMARK CASES

 Workmen of Indian Express Newspapers Ltd. V.


Management Indian Express Newspapers

The Delhi Union of Journalists, an external union, backed a disagreement


involving two employees at Indian Express Newspapers Ltd. Around 25% of the
journalists working for Indian Express were part of this external union, while the
Indian Express journalists themselves didn't have their own union. The dispute
was officially recognized as an industrial dispute because it was determined that
the Delhi Union of Journalists represented the working journalists employed by
Indian Express. To be considered an industrial dispute, it's necessary for the trade
union of workers to support it, or in the absence of a trade union, the majority of
workers must support it or meet the criteria outlined in Section 2-A of the
Industrial Disputes Act, 1947.

As per the Supreme Court's ruling, if a trade union or a significant portion of the
workforce supports a dispute, it can be classified as an industrial conflict. An
individual dispute can be transformed into an industrial issue if it's taken up by a
union representing the establishment's employees. If such a union doesn't exist, it
can be formed by any workers' union involved in a related trade. Regarding the
second requirement, a dispute among employees that is resolved by a substantial
portion of the same establishment's workforce qualifies as an industrial dispute.

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The Court clarified that a "number appreciable" of employees doesn't necessarily


mean the majority of them. 12
 Bombay Union of Journalists V. The Hindu

An employee of "The Hindu, Madras" was fired for falsely representing


themselves as a full-time worker. The disagreement was brought up by the
Bombay Union of Journalists. It was discovered that of the ten employees, seven
worked in administration and only three in journalism. Just two of these three
were union members.

The Bombay Union of Journalists is therefore ineligible to bring up this issue,


according to the Supreme Court's ruling. It could not have escalated into an
industrial dispute, even if it had been brought up.13

 Indian Bank V. Management of Indian Bank 1985 1 LLJ 6


(Mad.)

It was noted that when a trade union official received privileges in the form of
duties, the management withheld the benefits that were awarded to the privileged.
It is not possible to argue that this has given rise to an industrial dispute, and the
duty relief's legal standing is limited to that of a concession rather than anything
to do with working conditions. In this instance,

12
Workmen of Indian Express Newspapers Ltd. V. Management Indian Express Newspapers AIR 1970, SC 737
13
Bombay Union of Journalists V. The Hindu 1961, II LLJ 727 Bom

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it was decided that if a concession is taken away, the recipient cannot claim that
a condition of service is impacted, and the management is not allowed to bring
up the issue without filing an industrial dispute and having the authority settle
it.14

 Hindustan Aeronautics Ltd. V. The Workmen & ors.

The appellants contended that because the Corporation appoints and removes the
Managing Director and the Board of Directors, it functions as an agent of the
State. They argued that significant decisions are ultimately left to the discretion
of the President of India. The Memorandum of Association (MOA) and Articles
of Association (AOA) of the company underscore the crucial involvement of the
central government. As the Barrackpore branch operates under the Bangalore
office, the relevant government mentioned in Section 10(1) of the Industrial
Disputes Act, 1947 would be either the Central Government or the State
Government of Karnataka.

However, the Court ruled that the Appellant Company is not a government agent.
The decision was supported by various precedents, including Heavy Engineering
Mazdoor Union v. The State of Bihar & Ors. The court found the reasoning in
this case to be similar to that in Graham v. Public Works Commissioners..15

14
Indian Bank V. Management of Indian Bank 1985 1 LLJ 6 (Mad.)
15
Hindustan Aeronautics Ltd. V. The Workmen & ors. AIR 1975 SC 1737

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 MC Mehta vs State of Tamil Nadu & Ors

In the current instance, Shri MC Mehta claimed that Article 24's essential rights
for children had been violated and invoked Article 32.

The Court determined that Sivakasi was the primary perpetrator, using several
underage laborers in the production of matches and fireworks; an industry
deemed hazardous enough to prohibit hiring minors under the age of fourteen.

The Court reiterated its ruling that children under the age of fourteen cannot work
in any dangerous industries and that all children must receive free

education up until the age of fourteen. The Court also took a closer look at Article
39(e), which declares that possibilities for children's healthy growth16

and development should be taken advantage of rather than their immature age.
As a result, the Court ordered that Sivakasi, the employer, pay Rs. 20,000 in
compensation for violating many rights under the Child Labour (Prohibition and
Regulation) Act, 1986.

In this instance, the supreme court determined that the mentioned offenses were
committed, although egregiously. According to the court, there has been
widespread abuse of labor rules, and the State must intervene to prevent such
violations while preserving the workers' fundamental rights.17

16 MC Mehta vs State of Tamil Nadu & Ors Writ Petition (C) No. 465/1986
17
MC Mehta vs State of Tamil Nadu & Ors Writ Petition (C) No. 465/1986

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Chapter 5

TATA MOTORS CASE ANALYSIS

The recent ruling of the Bombay High Court in a dispute between Tata Motors
and some temporary workers is examined in this article, with special attention
paid to the Court's findings about unfair labour practises involving temporary
workers.

Permanent employees in India are legally entitled to more perks than temporary
employees. Retrenchment compensation, for example, is only available to
employees who have worked continuously for at least 240 days a year in any
industry other than mining. Additionally, gratuities are only required for
continuous service.

The unequal distribution of benefits among different worker classes has


frequently resulted in disputes between workers and employers. Workers accuse
employers of fabricating contracts to avoid providing employment benefits, etc.,
and/or temporary workers of wanting their employment to become permanent.
Shankar Bhimrao Kadam & Ors v. Tata Motors Limited involved a similar issue
between TML and several employees.18

18 Shankar Bhimrao Kadam & Ors. vs Tata Motors Ltd, 73 OF 2013 IN WRIT PETITION NO. 5588 OF 2017.
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 Details of the Conflict

A few people (Petitioners) were hired by TML as "temporary employees" for


fixed terms of five to seven months; after these terms passed, their employment
was terminated. After a lapse of one or two years,

TML then reappointed a number of the petitioners. Once more, this rescheduled
visit was only for a span of five to seven months. Not one of the petitioners
worked for TML for more than 240 days in a row. The Petitioners were paid much
less than TML's regular workers who performed comparable work because they
were considered "temporary employees."

The petitioners argued that: (a) TML had artificially broken up their
employment with TML on multiple occasions to prevent any of them from
serving 240 days in a row; (b) the breaks were unnatural; and (c) this had turned
into "...a source of profit for the management and, at the same time, it extracted
the same amount of work, in comparison to the work performed by the permanent
workers." (d)the petitioners requested an order for reinstatement with continuity
of service and back wages, as well as (e)a declaration by the Bombay High Court
that TML had participated in unfair labour practices.

(f)The petitioners determined the calculation and payment of compensation


within 2 months as follows:

1. For more than 211 days of employment - ₹ 75,000

2.180-210 days - ₹ 65,000

3.150-179 days - ₹55,00

4.120-149 days - ₹ 45,000

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5. 90-119 days - ₹ 35,00019

6. 60-89 days - ₹ 25,000

7. Less than 60 days - no compensation

According to Tata Motors Ltd- the temporary workers were only hired when
there was a brief surge in work, and their time on the job was reliant on this
brief rise. TML further asserted that it could not be forced to establish jobs for
the Petitioners and that none of the Petitioners were eligible to permanent
employment because none of them had completed 240 days of continuous
service.

 The Court's Conclusion and Interpretation

The Court noted the following while reaching its decision: (i) TML had not
provided any proof of the temporary increase in work or its discontinuation; and
(ii) there did not appear to be a distinction between the work performed by the
Petitioners and that of TML's permanent employees. After examining each
petitioner's appointment tenure as well as the intervals between appointments and
reappointments, the Court came to the conclusion that there was a distinct and
regular pattern of hiring the petitioners as temporary employees for less than 240
days, disengaging them for a short while, and then reappointing them for a period
of five to seven months. This pattern was thought to be demonstrated by the fact
that TML employed a specialized staff to keep track of the duration of its
temporary personnel.

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The court cited its ruling in Sunil Pralhad Khomane & Ors. v. Bajaj Auto Ltd.,20
in which the employer had employed temporary employees on a rotating basis for
seven months before terminating their employment and temporarily substituting
them with other temporary employees. The Court found that there was
insufficient evidence to support the employer's claim that the term "retrenchment"
did not apply to the workers' terminations because they were only terminated due
to their contracts expiring, despite the management's contention that this did not
qualify as retrenchment. The Court further noted that the pattern of dismissal and
reappointment seemed to be intentional in eluding workers' rightful claims to
permanent employment. The Court determined that TML had participated in
unfair labor practices as the company had followed a comparable pattern.

When providing the Petitioners with relief, the Court took into account their
requests for back pay in lieu of reinstatement or for reinstatement with continuous
service.

Generally speaking, if it can be demonstrated that an employee's firing was


unlawful or improper, the courts may award reinstatement along with full back
pay. Numerous court rulings on the matter, however, suggest that courts have the
authority to choose the proper remedy depending on the particular facts and
circumstances of each case. Courts have previously taken into account variables
like the amount of time that has passed since the termination date, the
management's lack of faith and confidence in the worker, the employer and
employee's competing interests, the likelihood of reinstatement, the hardship to
the parties involved, and the financial ramifications.

20 Sunil Pralhad Khomane & Ors. v. Bajaj Auto Ltd (2021) 1. CLR 857.
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The court in this instance did not mandate the petitioners' readmission.
Nevertheless, the Court ordered TML to reimburse the Petitioners for their 21
earnings in line with the compensation schedule that the Court had created, based
on its observations and the fact that the Petitioners had not taken employment
elsewhere during the time between engagements with TML. The Court took into
account the required service breaks that TML imposed on the Petitioners while
calculating the compensation slab.

The Court chose not to grant interest even though it was able to do so at its
discretion.

♦ Final Thoughts

In cases where temporary workers have contested their employment agreements


and demanded benefits comparable to those of permanent employees, Indian
courts have typically looked first at the type of work the temporary workers were
doing and whether it was the same or similar to what the permanent workers were
doing. The court's ruling in Shankar Bhimrao Kadam and Ors. v. Tata Motors
Ltd. upholds the legal position in India that an employer cannot be found to have
engaged in unfair labor practices simply by classifying its workers as
"temporary." Instead, the courts will look at the type of work these workers
perform and the employer's intentions in order to make this determination. Given
that employers would probably be able to assign whatever nomenclature they see
fit due to the significant difference in the negotiating power of workers and their
employers, this study is essential.22

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Chapter 6

CONCLUSION & SUGGESTION

6.1 Conclusion:

Unfair labor practices, as detailed in the Industrial Disputes Act, extend beyond
mere legal constraints. They encapsulate a delicate balance between the rights of
employers and employees, emphasizing the need for ethical and responsible
conduct in the workplace. The Act's historical evolution, from the Trade Disputes
Act of 1929 to its current form, underscores its adaptability to changing socio-
economic contexts.

In essence, the Industrial Disputes Act is not merely a legal document but a
dynamic instrument shaping the delicate interplay between labor and
management. Its continuous evolution and adaptability are vital to fostering a
work environment that not only abides by legal norms but also promotes fairness,
equity, and mutual understanding.

In the final analysis, this research paper delves into the intricate landscape of
labour laws, focusing on the Tata Motors case study as a lens through which to
examine unfair labour practices. The exploration of historical contexts, legislative
frameworks, and landmark cases provides a comprehensive foundation for
understanding the complexities of industrial relations in India.

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6.2 Suggestion:

 Transparent Employment Practices: Employers should adopt


transparent practices to clearly outline the terms of temporary
engagements, avoiding patterns that may exploit or disadvantage workers.
 Periodic Review of Employment Policies: Regularly reviewing and
updating employment policies ensures alignment with evolving labour
laws and ethical standards, preventing unintentional violations or unfair
practices.
 Collective Bargaining: Open dialogue through collective bargaining can
foster understanding and lead to fairer terms for temporary workers.
 Government Oversight: Strengthening oversight is crucial to ensure
compliance with labour laws, investigating patterns that may indicate
attempts to sidestep workers' rights.
 Employee Empowerment: Workers should be informed about their
rights, empowering them to raise concerns and seek redress when unfair
labour practices are suspected.

By addressing these recommendations, employers can contribute to a more


equitable work environment, promoting harmony and fairness in employment
relationships.

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REFERENCES

1. https://www.simpliance.in/blog/industrial-disputes-act-1947-labour-
law/#:~:text=The%20Industrial%20Disputes%20Act%2C%201947%20is%20the%20primary,during%
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2. https://lawessential.com/m%26a-deals-%26-cases-archive/f/unfair-labour-practices---a-study (Last
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Thakur Ramnarayan College of Law 23

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