You are on page 1of 25

The Industrial Disputes Act 1947

The Act has been amended several times and is responsive to the changes taking place in the business environment It is a special legislation which applies to workmen irrespective of the amount of wages but covers supervisors drawing wages not exceeding a specified amount per month It governs their service conditions It is regarded as a supplement to the Indian Contract Act It deals with prevention and settlement of conflict between the two parties. Basing on various judgements by the Supreme court, the objectives of ID Act could be found (mentioned in next slides) The term Industry has a wide meaning which normally include all economic activities in an organised set up.

The Industrial Disputes Act 1947


Industry includes Dock Labour board Activities or profession carried on by individual or groups Agriculture Hospitals, Dispensaries, Nursing Homes, Educational, Scientific, Research or Training institutions Charitable, Social or Philanthropic institutions Khadi and Village industries Government activities like defence, research, atomic energy and space Any domestic service Co-operative society or club ( min 10 employees) Municipality/Municipal Corporation/City Corporation

The Industrial Disputes Act 1947


Disputes: Collective issue raised on management which is rejected Community interest of group of employees Dispute between employees, employer and employers or between employers Dispute must be related to employment, non-employment or terms of employment/conditions of labour or withdrawal of benefits to an office bearer of union. However, benefits like housing, conveyance, education or medical are the responsibilities of the Government. Dispute also relate to Strike or lock outs Contractual relationship should be present Industry must be existing not a dead one or imaginary Individual employee dispute can be treated as an industrial dispute when taken up by a trade union or by a number of workmen

The Industrial Disputes Act 1947


Objectives of ID Act: Promoting and securing amity and good relations Minimising differences and settling disputes through adjudication Providing a suitable machinery for investigation of disputes Preventing illegal strikes and lockouts Providing relief to workmen in matters of lay-offs, retrenchment, wronggul dismissals and victimisation Giving the workmen the right of collective bargaining Promoting conciliation

The Industrial Disputes Act 1947


Principles under the Act Permanent conciliation machinery available. Time limits have been fixed. Time reckoned from the date of notice of strike. Specific time limits for various stages also fixed. Individual or collective disputes covered Compulsory arbitration in public utility srevides Strikes and lockouts during the pendency of conciliation and arbitration proceedings and arbitration awards, are prohibited. An obligation on employers to recognise and deal with representative union has been imposed Works committee mutual consultation by employer and workers set up Disputes may be referred to Industrial Tribunal/Labour court by the employees, employers or even the government

Industrial Disputes Act


Important Definitions: Appropriate Government: Central or State Government Award: Award means an interim or final decision of any industrial tribunal of dispute or of any question thereto by any labour court, industrial tribunal or national tribunal. Also includes arbitration award Employer: Authorities prescribed by the Central or State Government. If no authority prescribed, the Head of the Department. In other cases, the CEO Industry: Industry means any business, trade, undertaking, manufacture or calling. Amended in 1982 to any systematic activity carried on by cooperation between an employer and his workmen (whether employed directly or through any agency including the contractor) for the production, supply or distribution of goods or services with a view to satisfy human wants or wishes( not being merely religious or spiritual in nature)

Industrial Disputes Act


Important Definitions: Industry does not however include: Agriculture, Hospitals/Dispensaries, educational, scientific, research or training institutions, charitablesocialor philanthropic institutions, khadi and village industries, activities of sovereign government(defense, research, atomic energy and space), domestic services, co-op society, club or any other body of individuals where not less than ten persons are employed industrial Dispute: any dispute or difference between employers and employees or between employers and workmen or between workmen and workmen which is connected with the employment or nonemployment or the terms of employment or the conditions of labour or any person ( collective will, appreciable number in case of large industry, first raised with the management and rejected by it, existing industry and not a dead/non-existing). However, an individual dispute could become industrial dispute when a trade union or a number of workmen take up the cause

Industrial Disputes Act


Certain aspects of Industrial disputes: Employment and Non-employment:-Dismissal, removal, retrenchment, or discharge Disputes re: Facilities: Tribunals and courts has jurisdiction can pass appropriate orders Withdrawal of privilege of a trade union leader Dsiputes re: workmen employed by the contractor Lay off ( failure refusal or inability of the employer) on account of shortage of raw materials or power or accumulation of stocks or breakdown of machinery

Industrial Disputes Act


Certain aspects of Industrial disputes: Lockout: temporary closing of a place of employment, or the suspension of work or temporary refusal by an employer to continue to employ any number of persons employed by him. Lockout is the anti thesis of strike an armour in the hands of the employer Public Utility Services Retrenchment does not mean voluntary retirement, superannuation, termination of services or termination of the contract or non-renewal of the contract Settlement: A settlement means a settlement which has been arrived at in the course of conciliation proceeding, and bind all workmen, and also which has been arrived at otherwise, but has been signed by both parties and a copy thereof has been sent to the government and the conciliation officer (bipartite settlement)

Industrial Disputes Act


Certain aspects of Industrial disputes: Strike: A cessation of work by a body of persons employed in any industry acting in combination, or a concerted refusal to continue to work or to accept employmentMere cessation of work does not constitute Strike unless it is a concerted action for the enforcement of the demands Wages: all remuneration capable of being expressed in terms of money which would, if the terms of employment, expressed or implied were fulfilled, be payable to the workman in respect of his employment or of work done in each employment and which includes DA, Housing facilitieswater, electricity, medical attendance or other amenities, travelling allowance Contract of Personal Service: does not fall under the definition of workman

Industrial Disputes Act


Authorities under the Act: Conciliation ( Works Committee, Conciliation Officer and the Board of Conciliation) Arbitrationcourt of enquiry AdjudicationLabour Court, Industrial Tribunal and National Tribunal Conciliation: Conciliation is a method for the settlement of industrial disputes through third party intervention. It aims at reconciling the views of disputants and brings them to an agreement The conciliator is a neutral party, who without using force, seeks to find some middle course for mutual agreement between disputants so that the deadlock is brought to an end at the earliest possible moment and normal peace restored. Government has the power to nominate the conciliation officers (including the number of conciliation officers)

Industrial Disputes Act


Authorities under the Act: Arbitration: A Court of Inquiry as an is constituted as an adhoc body as the occasion may arise, by the appropriate government. It can enquire into any matter connected with or relevant to industrial dispute, but not into the dispute itself. Constitution of the court has to be notified in the Official Gazette. Government may appoint One or more of the members as independent persons During the pendency of the proceedings the following rights are not affected a) workers right to go on strike; b) employers right to declare the lockout and c)the right of the employer to dismiss or otherwise punish the worker in certain cases.

Industrial Disputes Act


Authorities under the Act: Adjudication: The ultimate legal remedy for the settlement of an unresolved dispute is its reference to adjudication by the government. The Government appoints a third party for purpose of deciding the nature of final settlement Labour Court: Government may constitute a labour court for adjudicating the industrial disputes. Normally labour court upholds the decisions of the departmental inquiries(domestic enquiries). But if no domestic enquiries are held, the labour court has full jurisdictional powers to undertake an inquiry, accept fresh evidence, reappraise the same and render a new decision thereon.

Industrial Disputes Act


Authorities under the Act: Industrial Tribunal: The Appropriate Government may appoint one or more industrial tribunals for the adjudication. These tribunals take up disputes arising out of new demands which may affect the working of the company or industry. Example:--Wagesincluding the period and mode of payment; Compensatory and other allowances; Working conditions; Bonus; Profit sharing; Classification of Grades; Rationalisation, Retrenchment and any other matter assigned It is a judicial body and normally takes up long standing disputes unresolved National Tribunals Government may appoint one or more national tribunals for adjudication of industrial disputes involving questions of national importance or questions affecting the interests of more than one State.

Industrial Disputes Act


IMPORTANT TERMINOLOGIES: Strikes Lockouts Lay off Retrenchment Closure of industry or business Unfair Labour Practices ( victimisation, threatening with discharge or dismissal, sponsoring trade unions, favouritismlist is endless)

The Minimum Wages Act 1948


This Act prescribes the minimum wages which should be paid by the employers to workers. However, MINIMUM WAGE is not defined anywhere. (literally impossible to fix) It aims to prevent workers exploitation It is to secure social justice and welfare of the workers in a competitive world It extends to the whole of India and amended several ties It also deals with different kinds of workers like Child labour, Adolsescent and Adult Wages include all remuneration payable to a workers expressed in terms of money including house rent allowance ( but there are certain exceptions)

The Minimum Wages Act 1948


Exceptions to the term Wages: Money value of house accommodation, lighting, water, medical attendance or any other value of amenities Employers contribution to the Provident Fund or Pension fund Any travelling allowance Reimbursement of expenses incurred by the employee for office work Gratuity on discharge of employees However, compensation for the rest day would be treated as Wages.

The Minimum Wages Act 1948


The concept of minimum wages shall take into account the prevailing cost of essential commodities, the cost of living at a particular place and time as neutralised by the prise rise in essential commodities. The minimum wage should be paid irrespective of profit or loss. It applied to all industries big or small. Wages must be fair sufficiently high to provide a standard family food, clothing, shelter, medical care and education of children (appropriate to the workmen) and should consider the work load Kinds of employment defined in the Act Rice mill, Flour Mill, Plantations, Oil Mill, Local authority, Construction workers, stone breaking or stone crushing, leather factory, public motor transport, leather factory, mines of all categories etc

The Minimum Wages Act 1948


The Act empowers the Government to fix and/or review the minimum wages for the specified employment. Revision should be done in a period of two years or on a rise of 50 points in the consumer price index whichever is earlier.(as per Labour conference of May 1987) Minimum wage can be fixed for Time wage, Piece Wage, Guaranteed wage (in piece wage), Overtime Wage Minimum Wage can be fixed: a) a basic rate of wage with adjustment with the cost of living index; b) a basic rate of wage with or without cost of living allowance and the cash value of concessions in respect of essential commodities (supplied) or c) an all inclusive rate allowing basic rate, cost of living allowance and the value of concessions

The Minimum Wages Act 1948


As per the Act wages are to be paid in Cash. Government has to be permit payment of wages in kind where such practice is customary There are advisory boards, committees and sub-committees etc Only the following are allowed as deductions from Minimum wagesFines, Deductions for absence from duty, damage or loss deliberately caused, deductions for housing/amenities, overpayments in some periods; income tax, deductions as per court orders, PF contribution, payment of Insurance premia or to a co-op society at the workers request, deductions for investment in certain securities like NSCs or donations like National relief fund etc (at the request of a worker)

The Minimum Wages Act 1948


Where the employee works for part of the day, the wage can be paid for part of the day except where the employer himself is not able to provide full days work Claims for minimum wages can be made by a) employee himself; b) any legal practitioner on his behalf; c) any official or representative of a trade union on behalf of the worker; d) any person acting with the permission of the authority. Any employer violating the provisions of the Minimum Wages Act may be punished with imprisonment upto 6 months and/or fine of Rs Five hundred rupees or with both. Separate penalties are prescribed for failure to maintain proper registers.

The Payment of Bonus Act 1965


Bonus is something paid as a gesture of goodwill. Normally, employees contribute to higher productivity and profits and a share of profits is given to employees by way of Bonus. It is in addition to regular wages though not required by the terms of contract of employment Supreme Court has given a formula which states that the following factors to be considered while deciding the quantum of bonusa) surplus available; b) gap between wages received and minimum living wage; c) welfare work undertaken by employer; d) contribution of labour to profits; e) the needs of shareholders and the necessity of attracting them; f) expansion needs and g) financial stability of the employer

The Payment of Bonus Act 1965


The GOI appointed a tripartite committee in 1961 to consider the question of payment of bonus based on profits. The GOI implemented the committee recommendations with some changes in the year 1964. Payment of Bonus Act was enacted in the year 1965. Objectives of the Act: a) Statutory obligation for payment of bonus to eligible employees; b) to outline the principles for payment of bonus; c) fixing minimum and maximum bonus as a per a formula; d) enforcement of the Act The Act applies to all establishments employing 20 or more workers on any day in the accounting year. It applies to banks.

The Payment of Bonus Act 1965


Employee means any person (other than apprentice) employed on a salary or wage not exceeding Rs3500/- per month (check this limit now). Amt of bonus is on a salary of Rs2500. Employer includes owner, manager or agent of the owner, Managing director or managing agent Wage or salary includes all remuneration (except overtime work) in monetary terms including DA but excluding the following: a) temporary allowances; b) commission; c) travelling concession; d) HRA; e) bonus and additional bonus; f) contribution to PF or pension funds; g) terminal benefits to the employee Bonus cannot be attached by any court

The Payment of Bonus Act 1965


Employees who are terminated on account of Fraud, Riotous or Violent behaviour within the office premises, or Theft, misappropriation or sabotage are not eligible for bonus Statutory bonus: Minimum bonus is 8.33% of the wages and salary earned and the Maximum is 20%. It is an employees right but non-payment of bonus is not a dispute under ID Act, but a claim under the Payment of Bonus Act. Festival Bonus: May be paid by the employer in addition to the statutory bonus as per the bipartite agreements Time limit for payment: Eight weeks from the closure of accounts Deductions: recovery of financial losses caused by a misconduct Records to be maintained by the employer (Bonus paid register and register showing the calculation of allocable surplus)