UNIT-1

A) TRADE UNIONISM IN INDIA

The credit for organised labour movement in India goes to N.M. Lokhande, who was a factory worker
himself and who in 1884 organised an agitation in Bombay and called a conference of workers to make
representations to the Factory Commission appointed by the Government to study the conditions of working
classes employed in factories. It was then in the year 1890, when for the first time an association of mill
workers was formed in the name and style of ‘Bombay Millhands Association’. this association was
formed for the redressal of grievances of the Bombay mill workers.

After the first world war was over the cost of living considerably increased. The political agitation against
foreign rule was also gaining momentum throughout the country. The increase in cost of living and country-
wide political upsurge found its way in economic discontent among masses, particularly in industries. The
industrial unrest and economic discontent led to a number of strikes by workers, guided and controlled by
their Action Committees consisting of representatives of workers themselves. On many occasions these
strikes were successful in getting the demands of the workers fulfilled. The Trade Union movement in India
got impetus by the success of strikes in India and the world-wide uprising of labour consciousness. The
establishment of International Labour Organisation (ILO) has also influenced the growth to the trade
union movement in India.

India’s first Trade Union, the Madras Labour Union (1918) was founded by P.P. Wadia who was induced
to join the labour movement by his sympathy for the working classes against the European officers who
treated the Indians harshly in the mills.

By the year 1920 the Trade Union had emerged on the Indian scene in almost all the sectors to protect the
legitimate interests of the working classes. It was also in this year that India’s first central organisation of
labour, namely, All India Trade Union Congress (AITUC) was formed to coordinate the activities of all
labour organisations and generally to further the interests of Indian labour in matters of economic, social and
political significance. The Indian labour movement since establishment of AITUC remained very close to
the national movement led by Indian National Congress.

Another significant event in the year 1920 is that the High Court of Madras in a suit filed against the
officials of the Madras Textile Labour Union by Binny & Co. granted and injunction restraining the
Union Officials to induce certain workers to break their contracts of employment by refusing to return to
work. Obviously the leaders of the Trade Union found themselves liable to prosecution and imprisonment
even for bona fide trade union activities. It was then that they felt that some legislative protection of Trade
Union was necessary. The employers were so much opposed to any such legislative measure being adopted
that the passing of the Indian Trade Union Act could only be possible in 1926. But this Act was enforced
only from 1st June, 1927.

The year of 1929 was again significant in the sense that a Royal Commission on Labour in India was
appointed to study and report on the Indian labour conditions. After an exhaustive enquiry, the Commission
recommended in 1931 that employers should adopt a more liberal policy towards recognition of Trade
Unions. It favoured a liberalisation of the provisions in the Trade Unions Act, relating to inclusion of
outsiders in the Trade Union executives. Other recommendations favoured a greater emphasis on
conciliation as a method to resolve industrial disputes, the establishment of joint committees at plant level
and a tripartite industrial council at national level.

On this issue and also on the question of participation in International Labour Organisation (ILO) a
group of moderate labour leaders split up from the AITUC and formed a rival federation - the Indian Trade
Union Federation (ITUF) under the leadership of N.M. Joshi. The AITUC suffered further split in 1931
when the hardcore communists formed another central union the Red Trade Union Congress (RTUC)
under the chairmanship of D.B. Kulkarni. The common objectives of all the unions were threefold, namely,
(a) the establishment of a socialist State in India, (b) the attainment of political freedom from foreign rule
and, (c) the abolition of economic privilege.

The Royal Commission Labour in India had rightly observed that, “Trade Unionism to be fully effective,
demands two things, a democratic spirit and education. The democratic ideal has still to be developed
in the Indian workers and the lack of education is the most serious obstacle of all. The latter difficulty
does not arise merely or even mainly from illiteracy. Few Trade Unions can afford to conduct
benevolent work, and the majority find it hard to convince the worker that subscription is worth
while except when a dispute is imminent or in progress.”

After 1947 when the country was partitioned, the difficulties multiplied manifold. Therefore, immediately
after assuming the control of the Government, the national Government got enacted the Industrial Disputes
Act, 1947 embodying many of the restrictive features of the war time Defence of India Rule 81 (A). The
Trade Unions Act, 1926 was also amended and the amended Act provided for compulsory recognition of
unions. Another attempt to consolidate the Trade Union law was made by the introduction of Trade
Disputes Bill in 1950 which provided for the maintenance by unions of the lists of members, account books,
provision for inspection by the officers appointed for this purpose. The bill lapsed with the dissolution of the
Parliament.

The study of the Indian labour movement since 1947 reveals certain developments which can be categorised
as:
(i) The Trade Union movement, as its history depicts, continues to be dominated by political influences and
consequently, the methods employed to achieve the objective by the various unions affiliated to the different
Indian organisations, differ according to the ideological approach of each of the unions, as embodied in the
Constitution of each of the union.
(ii) There has been marked increase in the registered unions in the recent years.
(iii) The political development within India have led to the proliferation of parties and sources of political
strength.
(iv) The growing union consciousness amongst the working classes engaged in various vocations,
particularly government servants, and engaged in different crafts and pursuing various professions has
increased to a great extent on the national level, the All India Railwaymen Federation, and the All India
Defence Employees Federation and the Confederation of Central Government Employees covering
almost all sections of the departments of the Government of India had been extremely active to fight for the
cause of employees who had been hard hit due to continuous rise in the prices and consequently cost of
living index rising higher and higher in the last few years.
(v) With the increasing powers, prestige, constitutional and legal safeguards in favour of the Trade Unions
under the provisions of various Central and State legislations, the Trade Unions in some cases have resorted
to coercive measures in recent years in order to achieve their objectives.
(vi) The compulsory adjudication system is the cornerstone of labour dispute settlement procedure in India
in recent years due to the responsibility imposed upon the State in Directive Principles of State Policy of the
Constitution of India to usher in an era of the welfare State in India.
(vii) The labour policy of the Government has undergone a radical change in the recent years and there has
been a consistent endeavour on the part of the Government to accord encouragement to tripartite and
bipartite consultations due to the planned development of the Indian economy.
(viii) There has been tremendous increase in the number of Trade Unions and their membership in the recent
years but the size of the Trade Unions in India has been decreasing. One of the reasons for this tendency is
that as trade unionism is spreading among workers, Trade Unions are being established in smaller plants as
well.

The Trade Unions both of the employees and employers can play a constructive role in moulding and
shaping the national economy. Both employees and employers are co-partners in an adventure to create a
welfare State in India to which we stand committed under the Constitution of India. Trade Unions which
control the destiny of the working classes are to grow on healthier lines keeping in view the past
achievements and failures. Trade Unions are to operate on many fronts, social, economic, political and civic
and they should not feel content to fight only for wages and bonus or issues of like nature.

B) DEFINITION OF TRADE UNION AND TRADE DISPUTE

The Trade Unions Act, 1926 in its Section 2(h) defines Trade Union in the following words:
"Trade Union" means any combination, whether temporary or permanent, formed primarily for the
purpose of regulating the relations between workmen and employers or between workmen and
workmen, or between employers and employers, or for imposing restrictive conditions on the conduct
of any trade or business, and includes any federation of two or more Trade Unions:
Provided that this Act shall not affect--
(i) any agreement between partners as to their own business;
(ii) any agreement between an employer and those employed by him as to such employment; or
(iii) any agreement in consideration of the sale of the goodwill of a business or of instruction in any
profession, trade or handicraft.”

The Indian Trade Unions Act is based on the definition of the British Trade Unions Act with a material
difference that the Indian Act used the “combination” whereas the word used in the British Act is
“association”. the word ‘combination’ is wider is implication and impact as compared to the word
‘association’ which is restrictive in its operation. It follows that the term Trade Union includes not only a
combination of workmen but also an employers’ federation.

The members of a Trade Union must be ‘workmen’ of the employer engaged in the conduct of any trade or
business in a commercial undertaking. The term ‘workmen’ includes persons employed in trade or industry
with whom the trade dispute arises. The expression ‘workman’ as defined in the Trade Unions Act has a
wider import than the definition of workman in the Industrial Disputes Act.

It was held in the case of Tamil Nadu Non-Government Officers Union v. Registrar of Trade Unions,
that civil servants engaged in the task of sovereign and legal aspects of the State are not ‘workmen’ within
the meaning of the Act and, therefore, association of non-gazetted government servants including amongst
its members, sub-magistrates of the judiciary, Tehsildars, officers-in-charge of Treasuries and sub-
Treasuries cannot be registered as Trade Union under the provisions of the Act.

It was held in National Organisation of Bank Workers’ Federation of Trade Unions vs. Union of India
& Ors., that where a federation of trade unions is not registered it is not a trade union under the Act. It is
not a juristic person and is not competent to raise a demand on behalf of employees which can fall in the
ambit of industrial dispute. It cannot file a writ petition.

The Act defines Trade Dispute under Section 2(g) as “any dispute between employers and workmen or
between workmen and workmen, or between employers and employers which is connected with the
employment or non-employment, or the terms of employment or the conditions of labour, of any
person, and "workmen" means all persons employed in trade or industry whether or not in the
employment of the employer with whom the trade dispute arises.”
The vast majority of the legal rules governing trade disputes and industrial action are found in the Industrial
Relations Act of 1990. In Section 8 of the Act, “any dispute between employers and employees that is
related to the employment or non-employment, or the terms or conditions of, or affecting, the
employment of any person” is referred to as a ‘trade dispute’. An industrial action is any action that could
change the terms of a contract and is taken by a group of workers acting together to force their employer to
accept or not to accept terms or conditions of or affecting employment.

In Workmen of DTE vs. Management of DTE, it was held that unless parties to the dispute have a direct
or substantial interest in the employment, non-employment, or conditions of labour of the person regarding
whom the dispute is raised, it cannot be said to be real and substantial dispute between them. Where the
workmen of a tea estate raised a dispute regarding the termination of service of a person belonging
altogether to different category from them, the Supreme Court held that there was no industrial dispute
within the meaning of law as the appellant workman had no direct or substantial interest in his employment
or non-employment even if he was a member of the Trade Union.

As observed by the Supreme Court in Newspapers Ltd. vs. State Industrial Tribunal, U.P., that an
individual dispute cannot per se be a trade dispute unless the cause is sponsored by a Trade Union or by a
substantial number of workmen. It is not necessary that it should be supported by all or majority of the
workmen, but it should have the support of substantial section of workmen of the establishment. It is not the
arithmetical majority of the workmen but the substantiality of their number taking up the cause, which is to
be considered.

The latter part of Section 2(g) of the Act defines “workmen”. This definition has two ingredients:
(1) “Workmen” means all persons employed in trade or industry.
(2) It is immaterial that the persons employed in a trade or industry are not in the employment of the
employer with whom the trade dispute arises.

The definition of workmen embraces in it a dismissed, discharged, removed or retrenched employee also.
Further, the workmen must be employed in trade or industry, whether under the same employer with whom
the dispute arises or under a different employer connected with the same or similar industry.

C) REGISTRATION OF TRADE UNIONS

The method of registration of the trade unions encourages the unions to expand steadily and maintain strong
unions. The Act provides certain protection and benefits to the registered trade union. As a result, it is
necessary to register the trade union under the Trade Union Act, 1926.

The provisions relating to the registration of the trade unions are provided under Chapter II, Section 3 to
14 of the Trade Union Act, 1926. The registration of trade unions ensures the advancement of long-lasting
and reliable unions. Although the registration of the trade union is not mandatory, it is recommended
because the registered trade union enjoys certain immunities. Similarly, certain rights and privileges have
been provided to the members of the registered trade union.

i. LEGAL STATUS OF REGISTERED TRADE UNION

A very important question is put forth when discussing about the legal status of a registered Trade Union.
Whether a registered trade union a legal person? In light of the provisions of Section 13 of the Trade Union
Act, 1926, the answer may be given in the affirmative. The section clearly says that “Every registered
Trade Union shall be a corporate by the name under which it is registered, and shall have perpetual
succession and a body common seal with power to acquire and hold both movable and immovable
property and to contract, and shall by the said name sue and be sued.”

However, it is important to remember that the Trade Union Act only gives legal status, benefits, and rights
to registered trade unions. An unregistered trade union does not get these things. Further, once a trade union
is registered, all communications and notices to the registered trade union may be addressed to its registered
office.

It was held in Hardie and Lane Ltd. vs. Chilton, that an unrecognised Trade Union could not be sued in
tort by suing a member thereof in a representative capacity. The proper course in such a case was to sue a
member for any cause of action that lay against that member and it was not intended anywhere that such a
suit, would in any way be improper.

Legal status was granted to registered unions, bestowing certain advantages and powers, in order to
encourage registration. The Trade Unions Act, 1926, empowers a legal personality to use funds for trade
disputes to achieve its goals, as well as protection from criminal prosecution, immunity from civil action,
and the validity of its members’ agreement from the challenge that its objectives are in trade restraint. Thus,
following their registration in accordance with the provisions of this Act, trade unions are granted several
rights.

ii. MODE OF REGISTRATION

According to Section 4 of the Act “Any seven or more members of a Trade Union may, by subscribing
their names to the rules of the Trade Union and by otherwise complying with the provisions of this Act with
respect to registration, apply for registration of the Trade Union under this Act. Provided that no Trade
Union of workmen shall be registered unless at least ten per cent, or one hundred of the workmen,
whichever is less, engaged or employed in the establishment or industry with which it is connected are the
members of such Trade Union on the date of making of application for registration. Provided further that no
Trade Union of workmen shall be registered unless it has on the date of making application not less than
seven persons as its members, who are workmen engaged or employed in the establishment or industry with
which it is connected. Where an application has been made for the registration of a Trade Union, such
application shall not be deemed to have become invalid merely by reason of the fact that, at any time after
the date of the application, but before the registration of the Trade Union, some of the applicants, but not
exceeding half of the total number of persons who made the application, have ceased to be members of
the Trade Union or have given notice in writing to the Registrar dissociating themselves from the
applications.”

According to Section 5 of the Act, “Every application for registration of a Trade Union shall be made to the
Registrar, and shall be accompanied by a copy of the rules of the Trade Union and a statement of the
following particular's, namely:
(a) the names, occupations and addresses of the members making the application;
(aa) in the case of a Trade Union of workmen, the names, occupations and addresses of the place of work of
the members of the Trade Union making the application;
(b) the name of the Trade Union and the address of its head office; and
(c) the titles, names, ages, addresses and occupations of the office-bearers of the Trade Union.
(2) Where a Trade Union has been in existence for more than one year before the making of an application
for its registration, there shall be delivered to the Registrar, together with the application, a general statement
of the assets and liabilities of the Trade Union prepared in such form and containing such particulars as may
be prescribed.”

Section 6 provides that “A Trade Union shall not be entitled to registration under this Act, unless the
executive thereof is constituted in accordance with the provisions of this Act, and the rules thereof provide
for the following matters, namely:
(a) the name of the Trade Union;
(b) the whole of the objects for which the Trade Union has been established;
(c) the whole of the purposes for which the general funds of the Trade Union shall be applicable, all of
which purposes shall be purposes to which such funds are lawfully applicable under this Act;
(d) the maintenance of a list of the members of the Trade Union and adequate facilities for the inspection
thereof by the office-bearers and members of the Trade Union;
(e) the admission of ordinary members who shall be persons actually engaged or employed in an industry
with which the Trade Union is connected, and also the admission of the number of honorary or temporary
members as office-bearers required under section 22 to form the executive of the Trade Union;
(ee) the payment of a minimum subscription by members of the Trade Union which shall not be less than:
(i) one rupee per annum for rural workers;
(ii) three rupees per annum for workers in other unorganised sectors; and
(iii) twelve rupees per annum for workers in any other case;
(f) the conditions under which any member shall be entitled to any benefit assured by the rules and under
which any fine or forfeiture may be imposed on the members;
(g) the manner in which the rules shall be amended, varied or rescinded;
(h) the manner in which the members of the executive and the other office-bearers of the Trade Union shall
be elected and removed;
(hh) the duration of period being not more than three years, for which the members of the executive and
other office-bearers of the Trade Union shall be elected;
(i) the safe custody of the funds of the Trade Union, an annual audit, in such manner as may be prescribed,
of the accounts thereof, and adequate facilities for the inspection of the account books by the office-bearers
and members of the Trade Union; and
(j) the manner in which the Trade Union may be dissolved.”

In M.T. Chandersenan vs. Sukumaran, it was held that if subscriptions are not paid in accordance with the
bye-laws of the Trade Union, persons who have failed to pay cannot be considered as members of the Union.
But subscriptions should not be refused under some pretext which results in denial of membership.

It was held by the Supreme Court in Bokajan Cement Corporation Employees’ Union vs. Cement
Corporation of India Ltd., that an employee would not automatically cease to be a member of the Trade
Union on termination of his employment because there was no such provision either in Trade Union Act or
in the constitution of the union.

iii. POWERS AND DUTIES OF A REGISTRAR

Section 3 of the lays down the procedure for the appointment of the Registrars. The section is as follows:
“The appropriate Government shall appoint a person to be be the Registrar of Trade Unions for each State.
The appropriate Government may appoint as many Additional and Deputy Registrars of Trade Unions as it
thinks fit for the purpose of exercising and discharging, under the superintendence and direction of the
Registrar, such powers and functions of the Registrar under this Act as it may, by order, specify and define
the local limits within which any such Additional or Deputy Registrar shall exercise and discharge the
powers and functions so specified.
Subject to the provisions of any order by the appropriate Government where an Additional or Deputy
Registrar exercises and discharges the powers and functions of a Registrar in an area within which the
registered office of a Trade Union is situated, the Additional or Deputy Registrar shall be deemed to be the
Registrar in relation to the Trade Union for the purposes of this Act.”

Section 7 provides the powers of a Registrar of Trade Unions. It says that, “The Registrar may call for
further information for the purpose of satisfying himself that any application complies with the provisions of
section 5, or that the Trade Union is entitled to registration under section 6, and may refuse to register the
Trade Union until such information is supplied.
If the name under which a Trade Union is proposed to be registered is identical with that by which any other
existing Trade Union has been registered or, in the opinion of the Registrar, so nearly resembles such name
as to be likely to deceive the public or the members of either Trade Union, the Registrar shall require the
persons applying for registration to alter the name of the Trade Union stated in the application, and shall
refuse to register the Union until such alteration has been made.”

In Tata Workers’ Union vs. State of Jharkhand and Anr., there were two rival groups of Union. The
Registrar of Trade Union by an order took a decision to supervise the election of office-bearers to the
petitioner Union. This order was challenged and the High Court held that the Registrar could not intervene
in the matter of holding election of office-bearers of a registered Trade Union.

Sections 8 and 9 provide the duties that a Registrar is imposed upon with. According to the sections, “The
Registrar, on being satisfied that the Trade Union has complied with all the requirements of this Act in
regard to registration, shall register the Trade Union by entering in a register, to be maintained in such form
as may be prescribed, the particulars relating to the Trade Union contained in the statement accompanying
the application for registration. The Registrar, on registering a Trade Union under section 8, shall issue a
certificate of registration in the prescribed form which shall be conclusive evidence that the Trade Union has
been duly registered under this Act.”

In Kesoram Rayon Workers’ union v. Registrar of Trade Union, the registrar failed to offer any
opportunity to an existing Trade Union while registering new Trade Union. The question arose whether
Section 8 imposes an unreasonable restriction on the fundamental right by not offering a right of hearing to
an existing Union. The question was answered in the negative by the Calcutta High Court which held, “that
the freedom guaranteed under Article 19(1)(c) of the Constitution is available to all workmen so that
every workman has the freedom to form unions of his own choice and to refuse to become a member
of any union which he does not like. No union can claim monopoly right or right to complain if some
union is brought into existence.” Section 8 imposes statutory duty upon Registrar to register a union on
being satisfied that it had complied with all the requirements of the Act. It was also held that the workmen of
an industrial establishment can form as many Unions as they like. There is nothing in the Act that bars the
formation of rival Unions or requires a Union applying for registration to give notice to all existing Unions.

It was held in IFFCO Phulpur Karamchari Sangh vs. Registrar of Trade Unions and Ors., that once the
trade union is registered by the Registrar of Trade Unions under Section 8 of the Act, certificate of
Registration continues to hold good until it is cancelled. The action of the Registrar of Trade Unions
registering the change of names of office-bearers of a union does not amount to registration of trade unions.

In Chemosyn (P) Ltd. & Ors. vs. Kerala Medical and Sales Representatives Association, it was held
that a Trade Union registered under the Act is not a statutory body. It is not created by statute or
incorporated in accordance with the provisions of a statute. The activities of the Trade Union are not closely
related to Governmental functions and are not of public importance. Therefore, a Trade Union is not
amenable to writ jurisdiction as it is not covered by “other authorities” in Article 12 of the Constitution.

In ONGC Workers’ Associations vs. State of West Bengal and Ors., it was held that the Registrar of
Trade Union has no quasi-judicial authority to hold any inquiry by allowing parties to examine witnesses
and to decide the dispute as to who are the real office-bearers. Where two rival groups claim to be office-
bearers of a Union the scope of inquiry is limited and an order passed by the registrar in this regard is
administrative in nature. To decide a dispute of this nature an inquiry may be held by the Registrar in
presence of both parties.

In re Inland Steam Navigation Workers Union, the Registrar refused to register the Union for the
application made for registration was said to be an attempt to have another Union. The Calcutta High Court
held that it was the duty of the registrar to examine the application and to look at the objects for which the
Union was formed. If these objects were set out in the Act and if these objects did not go outside the objects
prescribed in the Act and if all the requirements of the Act and Regulations made thereunder has been
complied with, it was his duty to register the Union.
Section 9A provides that “A registered Trade Union of workmen shall at all times continue to have not less
than 10 per cent or one hundred of the workmen, whichever is less, subject to a minimum of seven,
engaged or employed in an establishment or industry with which it is connected, as its members.

iv. CANCELLATION AND DISSOLUTION OF TRADE UNION

According to Section 10, “A certificate of registration of a Trade Union may be withdrawn or canceled by
the Registrar:
(a) on the application of the Trade Union to be verified in such manner as may be prescribed, or
(b) if the Registrar is satisfied that the certificate has been obtained by fraud or mistake, or that the Trade
Union has ceased to exist or has willfully and after notice from the Registrar contravened any provision of
this Act or allowed any rule to continue in force which is inconsistent with any such provision, or has
rescinded any rule providing for any matter provision for which is required by section 6:
(c) if the Registrar is satisfied that a registered Trade Union of workmen ceases to have the requisite number
of members.
Provided that not less than two months' previous notice in writing specifying the ground on which it is
proposed to withdraw or cancel the certificate shall be given by the Registrar to the Trade Union before the
certificate is withdrawn or canceled otherwise than on the application of the Trade Union.”

It was held in Tata Electric Companies Officers Guild vs. Registrar of Trade Unions, that for
cancellation of registration of a Trade Union wilful contravention of the provision of the Act is necessary.
Therefore where a Trade Union did not file return due to misunderstanding of accounting year and the return
was filed soon after receipt of show case notice from the Registrar, the cancellation of the registration on the
ground of non-filing of return was held improper.

In Bombay Fire Fighters Services Union , Mumbai vs. Registrar Trade Unions, Bombay, an appeal was
filed by the Union challenging the order of the Registrar cancelling its registration for continued
contravention of Section 28 of the Act. Setting aside the impugned order the High Court observed that the
said order was in violation of the mandatory provisions of Section 10 of the Act. The respondent, Registrar
had not addressed a previous show cause notice in writing to the appellant Union at its correct address.
Therefore, the cancellation of registration was held illegal and improper.

Section 11 provides that “ Any person aggrieved by any refusal of the Registrar to register a Trade Union or
by the withdrawal or cancellation of a certificate of registration may, within such period as may be
prescribed, appeal:
(a) where the head office of the Trade Union is situated within the limits of a Presidency-town, to the High
Court, or
(aa) where the head office is situated in an area, falling within the jurisdiction of a Labour Court or an
Industrial Tribunal, to that Court or Tribunal, as the case may be;
(b) where the head office is situated in any other area, to such Court, not inferior to the Court of an
additional or assistant Judge of a principal Civil Court of original jurisdiction, as the appropriate
Government may appoint in this behalf for that area.
The appellate Court may dismiss the appeal, or pass an order directing the Registrar to register the Union
and to issue a certificate of registration under the provisions of section 9 or setting aside the order for
withdrawal or cancellation of the certificate, as the case may be, and the Registrar shall comply with such
order.
For the purpose of an appeal, an appellate Court shall, so far as may be, follow the same procedure and have
the same powers as it follows and has when trying a suit under the Code of Civil Procedure, 1908, and may
direct by whom the whole or any part of the costs of the appeal shall be paid, and such costs shall be
recovered as if they had been awarded in a suit under the said Code.
In the event of the dismissal of an appeal by any Court appointed by the appropriate Government, the person
aggrieved shall have a right of appeal to the High Court, and the High Court shall, for the purpose, of such
appeal, have all the powers of an appellate Court mentioned above.”

In Registrar of Trade Unions, West Bengal vs. Mihir Kumar Guha, an appeal was made against an order
of a single Judge allowing an appeal under Section 11(1)(a) of the Act, against the order of the Registrar of
Trade Unions, West Bengal, cancelling the certificate of registration granted to the Employees’ State
Insurance Corporation Employees’ Union. The respondents raised three objections, namely:
(i) No appeal from the decision of a single Judge is provided under Section 11(1)(a) of the Act, and
(ii) The judgment pronounced by the single Judge was itself in the exercise of appellate jurisdiction.
Therefore it was not appealable, and
(iii) The case was not declared by the Judge as fit one for appeal.
The Court fully agreed with the contention of the respondent that second appeal is not provided for in the
Act, but held the appeal to be competent under the provisions of Clause 15 of the Letters Patent

In Mukund Iron & Steel Works Ltd. vs. V.G. Deshpande, Registrar of Trade Unions Bombay, the
registration of the Trade Union was cancelled for contravention of the provisions of Section 28 by failing to
send annual return. Later on, Registrar withdrew the cancellation of registration on the ground that returns
have been submitted subsequently. Therefore, the question for consideration was whether the Registrar had
the power to withdraw the cancellation of registration. It was held that a Trade Union whose registration has
been cancelled has remedies in the form of an appeal or in the form of an application for fresh registration. If
the appeal succeeds the order of cancellation could be held to be void ab initio and the union would continue
as if order of cancellation has not been passed. If fresh registration is permitted it would operate from the
date thereof. Once the Registrar cancels or withdraws the registration of a Trade Union he has no power to
review it and he cannot withdraw that order because of subsequent events. Hence the order of the Registrar
withdrawing the cancellation order is without jurisdiction.

Section 27 lays down the provision for dissolution of a Trade Union. The section says that “When a
registered Trade Union is dissolved, notice of the dissolution signed by seven members and by the Secretary
of the Trade Union shall, within fourteen days of the dissolution, he sent to the Registrar, and shall be
registered by him if he is satisfied that the dissolution has been effected in accordance with the rules of the
Trade Union, and the dissolution shall have effect from the date of such registration.
Where the dissolution of a registered Trade Union has been registered and the rules of the Trade Union do
not provide for the distribution of funds of the Trade Union on dissolution, the Registrar shall divide the
funds amongst the members in such manner as may be prescribed.”

v. PROCEDURE FOR CHANGE OF NAME

Section 23 provides that, “Any registered Trade Union may, with the consent of not less than two-thirds of
the total number of its members and subject to the provisions of section 25, change its name.”

According to Section 25 of the Act, “Notice in writing of every change of name, signed, by the Secretary
and by seven members of the Trade Union changing its name, shall be sent to the Registrar.
If the proposed name is identical with that by which any other existing Trade Union has been registered or,
in the opinion of the Registrar, so nearly resembles such name as to be likely to deceive the public or the
members of either Trade Union, the Registrar shall refuse to register the change of name.
The Registrar shall, if he is satisfied that the provisions of this Act in respect of change of name have been
complied with, register the change of name in the register referred to in section 8, and the change of name
shall have effect from the date of such registration.”

Section 26 provides the effect of change of name of any Trade Union as, “The change in the name of a
registered Trade Union shall not affect any rights or obligations of the Trade Union or render defective any
legal proceeding by or against the Trade Union, and any legal proceeding which might have been continued
or commenced by or against it by its former name may be continued or commenced by or against it by its
new name.”
vi. AMALGAMATION OF TRADE UNION

Section 24 provides that “Any two or more registered Trade Unions may become amalgamated together as
one Trade Union with or without dissolution or division of the funds of such Trade Unions or either or any
of them, provided that the votes of at least one-half of the members of each or every such Trade Union
entitled to vote are recorded, and that at least sixty per cent. of the votes recorded are in favour of the
proposal.”

Section 25 lays down that “Notice in writing of every amalgamation, signed, by the Secretary and by seven
members of each and every Trade Union which is a party thereto, shall be sent to the Registrar, and where
the head office of the amalgamated Trade Union is situated in a different State, to the Registrar of such State.
The Registrar of the State in which the head office of the amalgamated Trade Union is situated shall, if he is
satisfied that the provisions of this Act in respect of amalgamation have been complied with and that the
Trade Union formed thereby is entitled to registration under section 6, register the Trade Union in the
manner provided in section 8, and the amalgamation shall have effect from the date of such registration.”

Section 26 provides the effect of an amalgamation as “An amalgamation of two or more registered Trade
Unions shall not prejudice any right of any of such Trade Unions or any right of a creditor of any of them.”

D) DISQUALIFICATIONS OF OFFICE-BEARERS, RIGHT AND

DUTIES OF OFFICE-BEARERS AND MEMBERS

Section 2(b) of the Act defines an ‘office-bearer’ as ““office-bearer", in the case of a Trade Union,
includes any member of the executive thereof, but does not include an auditor.”

Section 22 provides that “Not less than one-half of the total number of the office-bearers of every registered
Trade Union in an unorganised sector shall be persons actually engaged or employed in an industry with
which the Trade Union is connected.
Provided that the appropriate Government may, by special or general order, declare that the provisions of
this section shall not apply to any Trade Union or class of Trade Unions specified in the order.
For the purposes of this section, "unorganised sector" means any sector which the appropriate Government
may, by notification in the Official Gazette, specify.
All office-bearers of a registered Trade Union, except not more than one-third of the total number of the
office-bearers or five, whichever is less, shall be persons actually engaged or employed in the establishment
or industry with which the Trade Union is connected.
An employee who has retired or has been retrenched shall not be construed as outsider for the purpose of
holding an office in a Trade Union.
No member of the Council of Ministers or a person holding an office of profit (not being an engagement or
employment in an establishment or industry with which the Trade Union is connected), in the Union or a
State, shall be a member of the executive or other office-bearer of a registered Trade Union.

Section 21A lays down the conditions for disqualification of an office-bearer. It provides that “A person
shall be disqualified for being chosen as, and for being, a member of the executive or any other office-bearer
of a registered Trade Union if:
(i) he has not attained the age of eighteen years;
(ii) he has been convicted by a Court in India of any offence involving moral turpitude and sentenced to
imprisonment, unless a period of five years has elapsed since his release.
Any member of the executive or other office-bearer of a registered Trade Union who, before the
commencement of the Indian Trade Unions (Amendment) Act, 1964, has been convicted of any offence
involving moral turpitude and sentenced to imprisonment, shall on the date of such commencement cease to
be such member or office-bearer unless a period of five years has elapsed since his release before that date.
(3) In its application to the State of Jammu and Kashmir, reference to the commencement of the Indian
Trade Unions (Amendment) Act, 1964, shall be construed as reference to the commencement of this Act in
the said State.

Section 20 provides that “The account books of a registered Trade Union and the list of members thereof
shall be open to inspection by an office-bearer or member of the Trade Union at such times as may be
provided for in the rules of the Trade Union.”

Section 21 says that “Any person who has attained the age of fifteen years may be a member of a registered
Trade Union subject to any rules of the Trade Union to the contrary, and may, subject as aforesaid, enjoy all
the rights of a member and execute all instruments and give all acquittances necessary to be executed or
given under the rules.”

In Secretary of Tamil Nadu Electricity Board Accounting Subordinate Union v. Tamil Nadu
Electricity Board, the boundaries of the legal rights and privileges were established. Two employees of the
Tamil Nadu Electricity Board were given permission to perform the full-time union work in this instance.
After nearly 4 years, the board, however, declined to prolong this facility. The administration referred a
disagreement to the labour court for resolution after it was raised. The labour court ruled that this was only a
favour given to the union’s officers and not a condition of employment. Aggrieved by this order, the trade
unions preferred a writ petition before the Madras High Court. The trade unions questioned whether a
workman had a legal right to engage in trade union activity without attending to office duties, whether the
withdrawal of permission to engage in full-time trade union work would affect service conditions, and
whether trade union activity was a privilege within the meaning of Item 8 of Schedule IV of the Act. The
court answered all three issues in the negative, stating that trade unionism was not a right that could be
claimed during office hours and that allowing it would be an anachronism and would amount to fleecing
taxpayers. The court emphasised that trade unionism was recognized all over the world, but it did not mean
that office-bearers or trade unions could claim a right to engage in trade union activities during office hours.
The court believed that this would go against the purpose for which the workman was appointed by the
Electricity Board and that taxpayers paid money not to encourage trade unionism but to ensure that people
entrusted with the task of doing service would do their service. The court welcomed trade unionism as it
brings about solidarity among workers but emphasised that a right to active trade unionism during office
hours could not be claimed.

The Court, in the case of Burn & Co. v. Their Workmen, held that office-bearers are not exempt from
punishment for being absent from their duties, and this includes office-bearers of a trade union who are also
subject to disciplinary action. Additionally, the Court stated that office-bearers of a trade union cannot claim
immunity from being transferred.

Section 17 provides the liability of an office-bearer in case of a criminal conspiracy in trade disputes. It
reads that “No office-bearer or member of a registered Trade Union shall be liable to punishment under sub-
section (2) of section 120B of the Indian Penal Code, in respect of any agreement made between the
members for the purpose of furthering any such object of the Trade Union as is specified in section 15,
unless the agreement is an agreement to commit an offence.”

E) GENERAL AND POLITICAL FUNDS OF TRADE UNION

The provision relating to the general funds is Section 15 of the Act which says that “the general funds of a
registered Trade Union shall not be spent on any other objects than the following, namely:
(a) the payment of salaries, allowances and expenses to office-bearers of the Trade Union;
(b) the payment of expenses for the administration of the Trade Union, including audit of the accounts of the
general funds of the Trade Union;
(c) the prosecution or defence of any legal proceeding to which the Trade Union or any member thereof is a
party, when such prosecution or defence is undertaken for the purpose of securing or protecting any rights of
the Trade Union as such or any rights arising out of the relations of any member with his employer or with a
person whom the member employs;
(d) the conduct of trade disputes on behalf of the Trade Union or any member thereof;
(e) the compensation of members for loss arising out of trade disputes;
(f) allowances to members or their dependant on account of death, old age, sickness, accidents or
unemployment of such members;
(g) the issue of, or the undertaking of liability under, policies of assurance on the lives of members, or under
policies insuring members against sickness, accident or unemployment;
(h) the provision of educational, social or religious benefits for members (including the payment of the
expenses of funeral or religious ceremonies for deceased members) or for the dependents of members;
(i) the upkeep of a periodical published mainly for the purpose of discussing questions affecting employers
or workmen as such;
(j) the payment, in furtherance of any of the objects on which the general funds of the Trade Union may be
spent, of contributions to any cause intended to benefit workmen in general, provided that the expenditure in
respect of such contributions in any financial year shall not at any time during that year be in excess of one-
fourth of the combined total of the gross income which has up to that time accrued to the general funds of
the Trade Union during that year and of the balance at the credit of those funds at the commencement of that
year; and
(k) subject to any conditions contained in the notification, any other object notified by the 2[appropriate
Government] in the Official Gazette.

In Gross vs. British Iron Steel and Kindered Trade Association, a member of a Trade Union was injured
by an accident, the particulars of which were supplied to the Secretary of the Union. Papers were forwarded
by the Secretary to the legal advisor of the Union. The solicitor was of the opinion that there was no legal
cause of action against employer. The legal advice was communicated to the injured workman and was
accepted by him. But when the period of limitation for claiming damages expired the member brought an
action against the Union for failure to exercise proper care and diligence in pursuing him claim. It was held
that the Union was not liable. The court pointing out the duties of the Trade Union towards it members
observed that, “if the solicitor of the Union had advised that further inquiries should be made or that an
action should be brought, the Union would have been under a duty accordingly. But in the absence of any
such direction from the solicitor, the Union had fulfilled its duty by providing legal assistance which was
adverse to claim.”

In Mario Raposo vs. HM Bhandarkar and Ors., the petitioner as well as the respondents were members
of a Union called VCO Bank Employees’ Association Nagpur. The office-bearers of the Union purchased
shares of UTI in their individual names out of the Union General Fund. It was held that the purchase of
shares cannot be termed as investment under Section 15 of the Act but is a speculative activity. Section 15 of
the Act does not allow to spend the fund of the Union on speculative activity.

The Act also provides for a separate fund for political purposes. Section 16 lays down that “A registered
Trade Union may constitute a separate fund, from contributions separately levied for or made to that fund,
from which payments may be made, for the promotion of the civic and political interests of its members, in
furtherance of any of the objects specified below.
The objects are:
(a) the payment of any expenses incurred, either directly or indirectly, by a candidate or prospective
candidate for election as a member of any legislative body constituted under the Constitution or of any local
authority, before, during, or after the election in connection with his candidature or election; or
(b) the holding of any meeting or the distribution of any literature or documents in support of any such
candidate or prospective candidate; or
(c) the maintenance of any person who is a member of any legislative body constituted under the
Constitution or of any local authority; or
(d) the registration of electors or the selection of a candidate for any legislative body constituted under the
Constitution or for any local authority; or
(e) the holding of political meetings of any kind, or the distribution of political literature or political
documents of any kind.
In its application to the State of Jammu and Kashmir, references to any legislative body constituted under
the Constitution shall be construed as including references to the Legislature of that State.
No member shall be compelled to contribute to the fund constituted under this section; and a member who
does not contribute to the said fund shall not be excluded from any benefits of the Trade Union, or placed in
any respect either directly or indirectly under any disability or at any disadvantage as compared with other
members of the Trade Union (except in relation to the control or management of the said fund) by reason of
his not contributing to the said fund; and contribution to the said fund shall not be made a condition for
Admission to the Trade Union.”

F) CIVIL AND CRIMINAL IMMUNITIES OF REGISTERED TRADE

UNIONS

Section 18 provides civil immunity to the registered Trade Unions. The sections provides that “No suit or
other legal proceeding shall be maintainable in any Civil Court against any registered Trade Union or
any office-bearer or member thereof in respect of any act done in contemplation or furtherance of a trade
dispute to which a member of the Trade Union is a party on the ground only that such act induces some
other person to break a contract of employment, or that it is in interference with the trade, business or
employment of some other person or with the right of some other person to dispose of his capital or of his
labour as he wills.”

In Rama Vilas Service Ltd. v. Simpson and Group Companies Workers’ Union, the scope of Section 18
of the Act and the scope of interference in permitting the management or its customers to remove the
manufactured goods, without the aid of labour, during strike period was the point in issue. The Counsel for
the Union have an assurance that the Union and its members would not prevent the management, their
managerial staff and officers and any person or persons desirous of entering or leaving the concerns of the
plaintiffs’ companies and that they would not hold out threats. In view of the above assurance it was held
that immunity under Section 18 can be claimed by other acts also by the Union.

Sub-section (2) further provides that “A registered Trade Union shall not be liable in any suit or other legal
proceeding in any Civil Court in respect of any tortuous act done in contemplation or furtherance of a trade
dispute by an agent of the Trade Union if it is proved that such person acted without the knowledge of, or
contrary to express instructions given by, the executive of the Trade Union.”

In the case of Rohtas Industries Staff Union v. State of Bihar, the question before the Patna High Court
was whether the employers have any right to claim damages against the employees participating in and
illegal strike and thereby causing loss on production and business? It was held that even though strike may
be illegal under Section 24 of the Industrial Disputes Act, 1947 still workers are entitled to the immunity
under Section 18 of the Trade Union Act, 1926.

Similarly, it was held in Reserve Bank of India v. Ashish Kusum, that in order to secure immunity from
civil liability under Section 18, inducement or procurement of breach of contract of employment in
furtherance of a trade dispute must be by lawful means and not by means which would be illegal or wrong
by other provisions of the law.

An interesting case of its own type arose in the case of Western India Cine Employees v. Filmalaya (P)
Ltd., where the question for consideration of the High Court was whether collective action taken by the
workers to abstain from work at the call of the Union causing loss to employer is protected under Section
18(2) of the Act? The Court observed that “the Union is issuing directions to its own members not to
cooperate with the employer, no intimidation or coercion is caused which will result in denying them
freedom of choice by any unlawful or violent means. A Trade Union is entitled to carry out its legitimate
trade union activities peacefully and, therefore, per se slogan shouting or demonstrations cannot be termed
as unlawful and blanket injunction cannot be granted.”

Under the provisions of Section 27 of the Indian Contract Act and agreement in restraint of trade is void.
Section 19 of the Trade Unions Act, however, has provided immunity to Trade Unions from the above
provision of the Indian Contract Act. The section says that “Notwithstanding anything contained in any
other law for the time being in force, an agreement between the members of a registered Trade Union shall
not be void or voidable merely by reason of the fact that any of the objects of the agreement are in restraint
of trade.
Provided that nothing in this section shall enable any Civil Court to entertain any legal proceeding instituted
for the express purpose of enforcing or recovering damages for the breach of any agreement concerning the
conditions on which any members of a Trade Union shall or shall not sell their goods, transact business,
work, employ or be employed.”

The Trade Unions Act, 1926 gives immunity to registered Trade Union in certain circumstances, from
prosecution for criminal conspiracy under Section 17 which says that “No office-bearer or member of a
registered Trade Union shall be liable to punishment under sub-section (2) of section 120B of the Indian
Penal Code, in respect of any agreement made between the members for the purpose of furthering any such
object of the Trade Union as is specified in section 15, unless the agreement is an agreement to commit an
offence.”

In West India Steel Company Ltd. Vs. Azeez, a Trade Union leader obstructed work in the factory for 5
hours protesting against deputation of workman to work in another section. It was held that a worker inside
the factory is bound to obey the reasonable instructions given by his superiors and carryout the duties
assigned to him. The mere fact that such worker is a Trade Union leader does not confer on him any
immunity in that regard. A trade union leader has no right in law to share managerial powers and he cannot
dictate any worker individually or to the workmen generally about the manner in which they have to do their
work or discharge their duties. A Trade Union can espouse the cause of the workers and cam resort to lawful
agitations for conducting their rights but officials of Trade Union are not entitled to order a workman to stop
his work or otherwise obstruct the work of the establishment.

G) RECOGNITION OF TRADE UNION

The law relating to the recognition of Trade Unions in India was incorporated in Chapter III-A by an
amendment in the year 1947. But these provisions have not been put into operation so far and have thus
remained a dead letter on the statute book.

We, therefore, discuss the concept of recognition of Trade Unions through the help of case laws.

In All India Port and Dock Workers’ Federation and Ors. vs. Union of India, the petitioner union
represented third largest membership from amongst Unions. It was held that the Union of India is not
justified in refusing to recognise the petitioner in the matter of negotiating the terms and conditions of
service of the Port and Dock workers. Such refusal is against law and justice.

In KSRTC Bangalore and Ors. vs. Workman KSRTC Staff and Workers Federation, Bangalore and
Anr., the employer had issued a notification regarding eligibility for recognition by employer stipulating
that 33.3 percent votes in referendum would be a precondition for recognition. This notification was
challenged by the federation before the High Court. The High Court refused to interfere holding out that any
interference in policy decision was not justified.

In Tamil Nadu Elec. Board Union vs. Tamil Nadu Elec. Board, the Electricity Board granted recognition
to the petitioner Union. Later on the Board changed its name whereupon the Electricity Board withdrew the
recognition. The question was whether the withdrawal of recognition was valid. It was held that the
composition of the Union may be changed both in its name and content because it does not change or
enlarge its representative capacity. However, the representative capacity will be only in respect of
ministerial staff, excluding peons, bill-collectors and store-keepers because these categories of workers were
not members of the union when recognition was granted. It was further held that a union cannot be
prevented from changing its name.

In RBI Employees’ Association, Nagpur vs. AP Aiyar Manager RBI, Nagpur and Anr., the Court was
asked to determine whether refusal to grant recognition and derecognition stand on the same footing. It was
held that refusal to grant recognition and withdrawal of recognition once granted cannot be placed on the
same footing. Primary purpose of a Trade Union is collective bargaining and only recognised unions can
properly wield that authority and influence. Recognition once obtained by the Union becomes its soul and
gives it a new vigour as an authorised bargaining agent of the members and indeed raises its status to a new
height. Order of derecognition adds insult to the injury in case it is passed as a disciplinary measure and is
for alleged commission of offence and/or acts of indiscipline.

It was held in Workmen of Kampli Co-operative Sugar Factory Ltd. vs. Management of Kampli Co-
operative Sugar Factory Ltd. and Ors., that where there is no provision in the statute regarding
recognition, this right cannot be enforced by a writ petition. Where there is neither statutory provision nor an
agreement between the employer and the union regarding recognition, no legal right is created simply
because the union has been recognised by the management and when such recognition is withdrawn it does
not violate any right.

H) COLLECTIVE BARGAINING

The object of collective bargaining is to harmonise labour relations, promote industrial peace by creating
equality of bargaining power between the labour and the capital. Collective bargaining can exist only in an
atmosphere of political freedom.

Generally speaking, collective bargaining is regarded as a process whereby organised labour and
management negotiate the terms and conditions of employment which are incorporated in an agreement
called ‘collective bargaining agreement’.

The word “collective bargaining” was first used by Beatrice Webb about 100 years ago in the beginning of
20th Century. But the term was not defined by Beatrice Webb. According to ILO, “negotiations about
working conditions and terms of employment between an employer, a group of employers or one or more
organisations or employers on one hand and one or more representative organisation of workers on the other
with a view to conclude agreement is known as “collective bargaining”.

thus “collective bargaining” is that agreement whereby the wages and conditions of employment of
workmen are settled through a bargain between the employer and the workmen collectively whether
represented through their Union or by some of them on behalf of all of them.

There can be four ways in which terms and conditions of employment can be determined:
(1) They may be unilaterally dictated by an employer,
(2) They may be imposed by the Union,
(3) They may be regulated by Government, or
(4) They may be determined by joint negotiation between employer and workers or their Union.

Negotiating terms and conditions of employment on the part of employees may take two forms. First,
negotiation may be done individually which is called individual bargaining or second, it may be done
collectively through their unions or association and be called as collective bargaining.
Forms of collective bargaining
The process of collective bargaining normally takes one or the other of the forms, namely:
Negotiation is the process of settling the differences by face to face round table talks between the
representatives of the employees and the employers.
In case of failure of the negotiating machinery to resolve the difference by mutual discussions and
understanding, a third party intervention to secure settlement of labour disputes by way of mediation is
often resorted to.
Arbitration is an act of settling labour disputes through the medium of a neutral third party.
In case of voluntary arbitration the selection of the arbitrator entirely rests with the parties to the dispute.

Essential conditions to collective bargaining

The essential conditions for success of collective bargaining in any country are the following:
(1) Right to organise: The success of collective bargaining in any country depends upon the right of the
workers to organise themselves and bargain.
(2) Stable and strong Trade Unions: The second essential and important condition is that the trade unions
must be stable and strong.
(3) Recognition of Trade Unions: For successful collective bargaining recognition of trade union is most
important.
(4) Attitude of employers and trade unions: In addition to the above factors on which the success of
collective bargaining depends it also greatly depends on the attitude of the parties, i.e., the trade union and
the employer.
(5) Suitable framework: Collective bargaining can work smoothly only if there are established bodies and
procedures for bargaining and other supporting measures such as official labour management relations
advisory service, etc.

Purposes of collective bargaining

Collective bargaining serves two purposes:
(1) Collective bargaining as a means of regulating wages and conditions of service: In the beginning,
collective bargaining was used as a method of regulating wages and some conditions of employment but
with the development of trade unions gradually it covered matters relating to hours of work, bonus, cost of
living, allowance, annual leave, better working conditions, etc.
(2) As a means of regulating labour management relations: The second object of collective bargaining is
regulation of labour-management relations. Although initially it was not the object of collective bargaining
but gradually with the change in outlook collective bargaining is now used as an important method for
regulating labour-management relations

The Trade Unions in India could not contribute to the settlement of industrial disputes to the desired extent
because the labour is divided and the employers are well organised. Further, there is lack of proper labour
leadership and the majority of workmen are illiterate and as such unable to participate in mutual discussions.

The rule of collective bargaining has been incorporated in the Industrial Disputes Act, 1947, wherein the
provision is made for appointment of Conciliation Officers, charged with the duty of mediation in and
promoting the settlement of industrial disputes.

The right of a Trade Union to speak legitimately on behalf of their members is recognised in Indian law but
it does not in any way derogate an individual from his right to judge for himself, independently of any Trade
Union, as to an offer advantageous to him, concerning his employment.

UNIT-2

A) CONCEPT AND NATURE OF STANDING ORDERS

According to Section 2(g) of The Industrial Employment (Standing Orders) Act, 1946, the expression
“Standing Orders” means rules relating to matters set out in the Schedule of the Act. The following matters
should according to the Schedule be provided in Standing Orders under this Act:
(1) Classification of workmen, e.g., whether permanent, temporary, apprentice, probationers or badlis,
fix term employment.
(2) Manner of intimating to workmen periods and hours of work, holidays, pay days and wage rates.
(3) Shift working.
(4) Attendance and late coming.
(5) Conditions of procedure in applying for and the authority which may grant leave and holidays.
(6) Requirement to enter premises by certain gates and liability to search.
(7) Closing and reopening of sections of the industrial establishment and temporary stoppages of work
and the rights and liabilities of the employer and workmen arising therefrom.
(8) Termination of employment and the notice thereof to be given by employer and workmen.
(9) Suspension or dismissal for misconduct and acts or omissions which constitute misconduct.
(10) Means of redress for workmen against unfair treatment or wrongful exactions by the employer or
his agents or servant.
(11) Any other matter which may be prescribed.

It shall be obligatory upon the employer to make provision in the Standing Order in respect of any matter
provided in the Schedule of the Act. Once a provision is made it can be modified only in accordance with
the provision of Section 10(2) of the Act.

The word ‘condition’ in clause (5) of the Schedule has to be interpreted in a broad and liberal sense. The
dictionary meaning of the word “condition” is a provision or a stipulation. Thus construed conditions of
leave and holidays means a provision for the quantum of leave and holidays.

The expressions “termination of employment” and “notice thereof to be given by employer and workmen”
in clause (8) of the Schedule are to be read disjunctively. They comprise two distinct but connected matters
and the latter does not qualify the former. Termination of employment would be the principal or primary
subject, notice in relation thereto would form an ancillary or subsidiary subject.

It was held in S.K. Ghosh vs. Chairman O.S.E. Board, that the clause ‘termination of employment’ in item
8 of the Schedule and the word ‘superannuation’ cannot be equated. The former is a positive act by which
one party, even against the desire of the other, can bring about the end to an employment, while the latter is
an event which comes more or less in an automatic process. An age is fixed on the reaching of which the
holder of an office is required to go out of the office. There is no volition in the Act.

It was held in New Victoria Mills Co. Ltd. vs. Presiding Officer Labour Court, that the misconduct for
which an employee may be dismissed need not necessarily have been committed in the course of his
employment. Therefore, a workman employed as a sweeper who has either been proved to have committed a
theft or to have so acted as to facilitate or aid theft may be guilty of such misconduct as to justify his
dismissal. All that has to be shown is that the misconduct affects the competence of the employee for the
particular kind of work he does.
It was held in Glaxo Industries (P) Ltd. vs. Labour Court Meerut and Others, that the act of misconduct
which forms a basis for punishment must however, be one enumerated in the standing orders of the
establishment. Punishment for an act which is not enumerated in the standing orders of the establishment is
wholly illegal.

The Standing Orders provide for giving opportunity to workers to offer explanation before imposing
punishment of dismissal. It was held in Associated Cement Companies Ltd. vs. T.C. Srivastava and
Others, that neither under the ordinary law of the land nor under the industrial law a second opportunity to
show cause against the proposed punishment is necessary. This does not mean that a Standing Order may
not provide for it, but unless the standing order provides for it, either expressly or by necessary implication,
no inquiry which is otherwise fair and valid will be vitiated by non-affording of such second opportunity.

It was held in Co-op Cr. Bank vs. Ind. Tri. Hyderabad, that the conditions of employment can also be laid
down in any other manner that in Standing Orders. The employer and employee may enter into special
conditions of employment. In case of conflict between the statutory conditions of employment contained in
Standing Orders and the special terms contained in the written contract, the terms of former shall prevail all
over the latter. Such Standing Orders though binding between the employer and employees of industry, have
no force of law to be binding on Industrial Dispute.

It has been held in Western India Match Co. vs. Workmen, that the certified Standing Orders have a
statutory force. The Standing Order implies a contract between the employer and the workman. Therefore,
the employer and workman, cannot enter into a contract overriding the statutory contract as embodied in the
certified Standing Orders. While the Standing Orders are in force it is not permissible for the employer to
seek their statutory modification so that there can be one set of Standing Orders in respect of certain
employees and another for the rest.

In Behar Journals vs. Ali Hasan, the probation period provided by the Standing Orders was for 3 months
only. But in the appointment letter of the respondent the period of probation was six months. It was held that
the certified Standing Orders have statutory force. It is not possible in law for the parties to enter into
contract overriding the Statutory Contract as embodied in the Standing Orders. Therefore, probationary
period in this case could not be for a period longer than 3 months.

B) SCOPE AND COVERAGE OF THE INDUSTRIAL EMPLOYMENT

(STANDING ORDERS) ACT, 1946

The absence of Standing Orders in establishment very often led to friction between the management and
workers in industrial undertakings in our country. Before passing of this Act the conditions of employment
were governed by contracts either express or implied between the employers and their employees in
different industrial undertakings. In many cases these conditions were not well defined and suffered from
doubt and ambiguity.

The importance of making a law defining precisely the conditions of employment was emphasised during
discussions in the Tripartite Labour Conferences. To give effect to the new ideology the Industrial
Employment (Standing Orders) Act, 1946 was enacted by the Central Government. It is obligatory upon all
the employees covered by this Act to define conditions of employment under them. The conditions of
employment must also be made known to workmen employed by such employers. The Preamble of the Act
makes it amply clear that the Standing Order shall deal with the “conditions of employment of workers in
industrial establishment”.

The Act applies to every industrial establishment:

(1) Situated within the Indian Union,
 (2) Employing 100 or more workmen on any day of the preceding 12 months.

The appropriate Government may be a Gazette notification apply the Act to any Industrial establishment
employing such number of persons as specified in the notification. The number of employees fixed by the
Government may be less than 100. But the Appropriate Government must give two months’ prior notice of
its intention to make any such extension of the Act.

The Act does not apply to the following establishments:

(1) Any industry to which the provisions of Chapter VII of the Bombay Industrial Relations Act, 1946
apply,
(2) Any industrial establishment to which the provisions of the MP Industrial Employment (SO) Act,
1961 apply:
Provided that notwithstanding anything contained in the Madhya Pradesh Industrial Employment (Standing
Orders) Act, 1961, the provisions of this Act shall apply to all industrial establishments under the control of
the Central Government.

It was held in Avery India Ltd. vs. Second Industrial Tribunal, West Bengal, that the provisions as to the
age of retirement in the standing orders of an establishment would apply to all employees irrespective of
whether they entered into service prior to or subsequent to the coming into force of the standing orders and
even though there was no such provision for retirement in the past.

In Narendra Pal Gahlot vs. State of Uttar Pradesh, it was held that this Act contains, a general provision
requiring employers in the industrial establishments to define terms and conditions of the employment under
them and to make such terms and conditions known to the workmen employed by them, from the very
beginning.

In Bharat Petroleum Corporation Ltd. vs. Maharashtra General Kamgar Union, the Supreme Court
explained the object of Industrial Employment (Standing Orders) Act, 1946 and stated that it was made by
the Parliament to require employers of all industrial establishments to define formally the conditions of
employment on which the workmen would be engaged. The object underlying the Act, which is beneficent
piece of legislation is to introduce uniformity of terms and conditions of employment in respect of workmen
belonging to the same category and discharging the same and similar work under the industrial
establishment and to make the terms and conditions of industrial employees well settled and known to the
employees before they accept employment.

Section 13-B limits the application of the Act against such workmen employed in any industrial
establishment as are covered by the following rules and regulations:
(1) The Fundamental and Supplementary Rules,
(2) The Civil Service (Classification, Control And Appeal) Rules,
(3) The Civil Services (Temporary Service) Rules,
(4) The Revised Leave Rules,
(5) The Civil Services Regulations,
(6) The Civilians Defence (Classification, Control And Appeal) Service Rules,
(7) The Indian Railway Establishment Code, or
(8) Any other Rules or Regulations that may be notified in this behalf by the appropriate Government in
the Official Gazette.

Section 14 of the Act authorises the appropriate Government to exempt conditionally or unconditionally any
industrial establishment or class of industrial establishments from all or any of the provisions of this Act.

But the question that arose before the Court in Raman Nambisan vs. Madras State Electricity Board, was
whether the power to exempt any industrial establishment would include the power to exempt a section of
the industrial establishment also. It was held that Section 14 enables the Government to exempt any
industrial establishment or class of industrial establishments from all or any provisions of the Act and not a
section of the industrial establishment.
Salient features of the Act: The following are some of the main features of the Industrial Employment
(Standing Orders) Act, 1946:
(1) The definition of workmen under this Act includes a “Supervisory Technical Personnel” under
certain conditions.
(2) The certifying officer is empowered to modify or add to the draft Standing Orders so as to render
them certifiable under the Act.
(3) A group of employers of similar industrial establishments may submit joint Standing Orders for
certification.
(4) This Act normally applies to every industrial establishment wherein 100 or more workmen are
employed.
(5) The certifying officers and appellate authorities shall have all the powers of a Civil Court in respect
of certain matters provided in Section 19 of the Act.
(6) The employer can be penalised for failure to submit draft Standing Order for certification or for
contravention of any provision of Standing Order finally certified.
(7) The appropriate Government may be a Gazette notification exempt any establishment or class of
industrial establishments from any of the provisions of the Act.

C) CERTIFICATION PROCESS

The aim and objective of drafting a standing order and its certification are to regulate the terms and
conditions of employment. The process provides that, after certification, the order will be binding on the
employees in that employment.

i) PROCEDURE FOR CERTIFICATION

Section 3 of the Act states that within six months from the date on which this Act becomes applicable to an
industrial establishment, the employer shall submit to the Certifying Officer five copies of the draft standing
orders proposed by him for adoption in his industrial establishment.
Provision shall be made in such draft for every matter set out in the Schedule which may be applicable to the
industrial establishment, and where model standing orders have been prescribed, shall be, so far as is
practicable, in conformity with such model.
The draft standing orders submitted under this section shall be accompanied by a statement giving
prescribed particulars of the workmen employed in the industrial establishment including the name of the
trade union, if any, to which they belong.
Subject to such conditions as may be prescribed, a group of employers in similar industrial establishments
may submit a joint draft of standing orders under this section.

In SK Sheshadri vs. HAL and Others, the validity of the Standing Order which was made unduly lending
in the company premises a misconduct was challenged as violative of Article 14 of the Constitution. The
said Standing Order was held not to be discriminatory. It was further held that as long as the Standing
Orders fall within the Schedule to the Act, they would not be invalid or ultra vires because they contain
additional provisions not provided for in the Model Standing Orders.

It was held in UP State Sugar Corporation and Another vs. Bipin Kumar Mishra, that there is no
requirement under the Act to frame standing order in respect of transfer, hence the employer cannot be
denied that normal right to transfer an employee from one place to another. The employer cannot also be
denied the right to frame rules and regulations relating to transfer of employees.
Section 5 of the Act provides that when the draft Standing Orders is submitted to the Certifying Officer he
shall forward a copy of it to Trade Union, if any, of the workmen or where there is no Trade Union to the
workmen in such manner as may be prescribed together with the notice in the prescribed form requiring
objections, if any, which the workmen may desire to make to the draft Standing Orders.
The workmen or the Trade Union is required to submit the objections to the Certifying Officer within 15
days from the receipt of the notice.
The Certifying Officer shall give the employer, Trade Union or the representatives of the workmen
opportunity of being heard.
He shall, thereafter, decide whether any addition or modification in the draft Standing Orders is necessary or
not to render it certifiable under the Act and shall make an order in writing.
The Certifying Officer shall, after making modification, if any, certify the draft. He shall, within 7 days from
the certification of the draft, send certified copies of it duly authenticated in the prescribed manner and of his
order under section 5(2) to the employer, Trade Union or other prescribed representative of the workmen.

The purpose of framing the Standing Orders and getting them certified by the Certifying Officer is that the
conditions of service of that employment shall be regulated by it. The manner in which the Standing Orders
are made and certified suggests that the Standing Orders, when certified, will be binding on the employees,
who are at the time in the service of the employer.

It was held in Barauni Refineries PSP vs. Indian Oil Corporation Ltd and Others, that no modification
in Standing Orders is permissible when a settlement relating to that matter is in operation. Since in the
course of settlement, the demand in respect of age of retirement was not acceded to, the modification of
Standing Orders raising the age of superannuation from 58 years to 60 years would throw additional
financial burden and as such will be in violation of settlement and, therefore, no such modification can be
made.

It was held in Uptron India Ltd. vs. Shammi Bhan, that any clause in the certified standing orders
providing for automatic termination of service of a permanent employee, not directly related to “Production”
in a factory or industrial establishment, would be bad if it does not prompt to provide an opportunity of
hearing to the employee whose services are treated to have come to an end automatically.

Section 8 states that a copy of all standing orders as finally certified under this Act shall be filed by the
Certifying Officer in a register in the prescribed form maintained for the purpose, and the Certifying Officer
shall furnish a copy thereof to any person applying therefore on payment of the prescribed fee.

Section 9 provides that the text of the standing orders as finally certified under this Act shall be prominently
posted by the employer in English and in the language understood by the majority of his workmen on special
boards to be maintained for the purpose at or near the entrance through which the majority of the workmen
enter the industrial establishment and in all departments thereof where the workmen are employed.

ii) APPEALS AGAINST CERTIFICATION

Section 6 of the Act provides that any employer, workmen, trade union or other prescribed representatives
of the workmen aggrieved by the order of the Certifying Officer under sub-section (2) of section 5 may,
within thirty days from the date on which copies are sent under sub-section (3) of that section, appeal to the
appellate authority, and the appellate authority, whose decision shall be final, shall by order in writing
confirm the standing orders either in the form certified by the Certifying Officer or after amending the said
standing orders by making such modifications thereof or additions thereto as it thinks necessary to render the
standing orders certifiable under this Act.
The appellate authority shall, within seven days of its order under sub-section (1), send copies thereof to the
Certifying Officer, to the employer and to the trade union or other prescribed representatives of the
workmen, accompanied, unless it has confirmed without amendment the standing orders as certified by the
Certifying Officer, by copies of the standing orders as certified by it and authenticated in the prescribed
manner.
There is no specific provision in the Act empowering an Appellate Authority to correct the mistakes in the
Standing Orders finally certified by it under Section 6(1) of the Act, before the expiry of 6 months from the
date on which the Standing Order or the last modification thereof came into operation in the manner
provided in Section 10 of the Act, that is except on an agreement between the employer and the workmen.

In Badarpur Power Engineers Association vs. Deputy Chief Labour Commissioner and Others, the
certified Standing Orders were dispatched on 7 January, 1991 and the appeal was filed on 6 February, 1991.
the question was whether the appeal was filed within the prescribed limitation period of 30 days. It was held
that in view of provisions of Section6 an appeal could be filed within 30 days from the date on which copies
of certified Standing Orders are sent. In this case the appeal was held to be filed within 30 days because 7
January was to be excluded in view of Section 9(1) of the General Clauses Act.

In Kerala Agro Machinery Corporation Ltd. vs. Industrial Tribunal and Others, the Appellate
Authority set aside certified standing orders and directed the Certifying Officer to consider the matter afresh.
This order was challenged in a writ and the Kerala High Court held that the power of the Appellate
Authority under Section 6 is to confirm the standing orders either in the form certified by the Certifying
Officer or by amending the same or by making such modifications or additions as it thinks necessary to
render the standing orders certifiable under the Act. The Appellate Authority has no power to set aside the
orders of the Certifying Officer and remand the matter for fresh disposal.

In BHEL Employees’ Association vs. Chief Labour Commissioner, the copy of certified Standing Orders
dated 31st December, 1984 was sent by registered post on 5th January, 1985 and the same was received on 7th
January, 1985. The Union sent the memorandum of appeal by registered post on 4 th February 1985 which
reached the appellate authority on 8th February, 1985. The appeal was rejected as barred by limitation. It was
held that the appeal was not time barred because the appeal papers sent on 4 th February, 1985, in the
ordinary course of post should have reached on or before 7 th February, 1985. Petitioner cannot be held
responsible for any delay caused in transit when it had used sufficient care to see that the papers were mailed
in time so that they could reach appellate authority in ordinary course of post. Consequently the appellate
authority was directed to dispose of the appeal on merits.

iii) CONDITIONS FOR CERTIFICATION

Section 4 provides that the standing orders shall be certifiable under this Act if:
(a) provision is made therein for every matter set out in the Schedule which is applicable to the
industrial establishment, and
(b) the standing orders are otherwise in conformity with the provisions of this Act,
and it shall be the function of the Certifying Officer or appellate authority to adjudicate upon the fairness or
reasonableness of the provisions of any standing orders.

The Certifying Officer or the appellate authority shall have the power to adjudicate upon the fairness or
reasonableness of the provisions of the Standing Orders. While doing so the Certifying Officer is directed to
consider and weigh the social interest in the claims of the employer and the demands of workmen.

The appellate authority or the Certifying Officer shall see whether the Standing Orders satisfy the conditions
necessary for certification. They can make necessary additions or modifications in draft Standing Orders
submitted to them for certification as as to make the draft certifiable under the Act.

Section 3 of the Act empowers the Certifying Officer or the appellate authority to enquire into the
impracticability to follow the Model Standing Order and Section 4 of the Act authorises them to adjudicate
upon the fairness or reasonableness of the draft Standing Order.

In Associated Cement Co. Ltd. vs. PD Vyas, the Certifying Officer modified the draft Standing Orders
submitted by the management and in respect of the Standing Order relating to the notice period for
discontinuance of a shift, he increased the notice period from 14 days to one month to bring it in conformity
with the Model Standing Orders. On similar grounds the Standing Orders relating to what amounted to
misconduct in relation to strikes and incitement to strikes was modified to include only illegal strikes. It was
held that the cumulative effect of the provisions of the Act is that the Certifying Officer has to be satisfied
that the draft Standing Orders deal with every matter set out in the Schedule and are otherwise in conformity
with the provisions of the Act.

The question is whether provision may be made in the Standing Orders in respect of any matter, which is
neither covered by any item of the Schedule nor by the Model Standing Orders but which is fair and
reasonable. In the Hindu vs. Its Secretary, the Madras High Court has held that there is no bar in making
provision in the Standing Orders about any matter which is not covered by the Schedule, but it is obligatory
to make provision with regard to matters covered by the Schedule.

In Rohtak and Hissar District Supply Co. Ltd. vs. State of UP, the Supreme Court has held that the
employer cannot insist upon adding a condition to the Standing Order which relates to the matter which is
not included in the Schedule.

The Supreme Court in UPE Supply Co. vs. TN Chatterjee, considered the question whether there can be
different conditions of service for different employees in the same industrial establishment. It was held that
the scheme and object of the Act clearly shows that it was not intended by the legislature that different sets
of conditions should apply to employees depending on whether a workman was employed before the
Standing Orders were certified or after. If the intention was otherwise it would lead to industrial unrest and
not industrial peace, the latter being the principal object of the legislation.

It was held in SK Ghosh vs. Chairman OSE Board, that the certification by the Certifying Officer of a
Standing Order containing a clause relating to the superannuation, neither covered by the Schedule to the
Act nor by the Model Standing Order cannot be valid certification and the failure of employees to challenge
such provision cannot add enforceability to it.

With regard to the fixing of age of superannuation by Standing Orders the Supreme Court in Jeewanlal Ltd.
vs. Workmen, observed that the present day tendency was to fix the age of superannuation generally at 60
years unless the Tribunal feels that the work of the operatives is particularly arduous or hazardous where
workmen may lose efficiency earlier.

iv) DATE OF OPERATION OF STANDING ORDERS

Section 7 states that standing orders shall, unless an appeal is preferred under section 6, come into operation
on the expiry of thirty days from the date on which authenticated copies thereof are sent under sub-section (3)
of section 5, or where an appeal as aforesaid is preferred, on the expiry of seven days from the date on which
copies of the order of the appellate authority are sent under sub-section (2) of section 6.

After a Standing Order comes into operation, it is binding upon the employer, all his employees presently
employed and also those, employed thereafter in the establishment. The right of the employees to challenge
the validity or propriety of such an order to claim modification in it by raising an Industrial Dispute cannot
be disputed. Further it is not open to the employer and the workmen to contract themselves out of the right
and obligations created by the Standing Order. Section 7 of the Act is subject to no limitations. Therefore,
the Standing Order after being certified must come into operation in accordance with Section 7 of the Act.

v) BINDING NATURE AND EFFECT OF CERTIFIED STANDING ORDERS

The certified standing orders are a legal document that is binding on both the employer and the employee,
and any breach of the standing orders constitutes misconduct by the employee.

The certified standing orders have been recognized by the Indian judiciary as a part of the contract of
employment between the parties. The Industrial Employment (Standing Orders) Act, 1946, provides the
statutory framework for the drafting and certification of the standing orders.
In India, Certified Standing Orders play an essential role in the industrial sector. It contributes to the
maintenance of law and order and fosters industrial discipline, which results in increased productivity and
efficiency. For the management, CSOs provide clarity in terms of the roles, responsibilities, and
expectations of the organization. They make decision-making more productive as employees may know
what is expected of them, and the employer may take disciplinary action in case an employee misconduct.

CSOs benefit the employees by providing them with a sense of security and certainty in regard to their
employment terms and conditions. Conditions of work, pay scale, work hours, leave policy, job security, and
grievance redressal mechanisms are laid down in a straightforward language accessible to all employees.

Certified Standing Orders are a set of rules and regulations which are designed by employers to govern the
terms and conditions of employment of their employees. These orders are mandatory in nature and provide
an exhaustive list of the rights and obligations of both the employer and employee. The primary objective of
certified standing orders is to ensure that there is a clear demarcation of duties and responsibilities between
the employer and employee.

The Industrial Employment (Standing Orders) Act, 1946, mandates that all industrial establishments, which
employ a minimum of 100 workmen, must submit their draft standing orders to the certifying officer for
approval. The certifying officer is appointed by the State Government and must be satisfied that the standing
orders submitted by the employer are legally compliant and in accordance with the provisions of the Act.
The certifying officer may make modifications to the draft standing orders if they are found to be non-
compliant with the provisions of the Act, and the employer must incorporate these changes in the final
standing orders. Once the standing orders have been certified, they become binding on both the employer
and the employees. The certified standing orders set out the terms and conditions of employment, such as
leave entitlements, working hours, termination of employment, etc.

A certified standing order is a legal document that governs the terms and conditions of employment and
regulates the working conditions of industrial workers. The standing orders are drafted by the employer in
consultation with the employees or their representatives. The standing orders are then submitted to the
certifying officer for certification of the document. The certifying officer verifies whether the standing
orders conform to the provisions of the Industrial Employment (Standing Orders) Act, 1946, and once
satisfied, issues a certificate of approval.

The certified standing orders are binding on both the employer and the employee. They can be used to
resolve disputes between the employer and the employee or between two employees. The certified standing
orders can also be used as evidence in any legal proceedings.

The certified standing orders have several effects on the relationship between the employer and the
employee.

Firstly, they provide certainty and predictability in the employment relationship. The employees are aware
of their rights and duties, and their expectations are predefined. Similarly, the employer knows the
expectations of the employees, which leads to a smooth functioning of the industrial establishment.

Secondly, the certified standing orders regulate the conduct of the employees. They provide guidelines for
the employees to follow, which leads to a harmonious working environment. The certified standing orders
also provide guidelines for the management to follow, which lead to a fair and just treatment of the
employees.

Thirdly, the certified standing orders provide a framework for resolving disputes between the employer and
the employee or between two employees. The standing orders provide a mechanism for resolving disputes
through conciliation, which can be exercised by the employer, the employee, or a conciliator appointed by
the state government.

The effect of certified standing orders is that they become binding on both the employer and the employee.
The provisions of certified standing orders prevail over any other terms of employment which may be in
conflict with the standing orders. Any contravention of the certified standing orders by either the employer
or the employee may lead to disciplinary action being taken against them.

Certified standing orders also provide a sense of security to both the employer and the employee as they
provide a clear framework for the functioning of the workplace. They ensure that there is uniformity in the
terms and conditions of employment and prevent arbitrary or discriminatory treatment of employees.

The Supreme Court of India, in the case of Management of Punjab National Bank v All India Punjab
National Bank Employees Federation and Others, held that the certified standing orders are not only
binding on the employer and the employees but also on the trade unions representing the employees. The
standing order must be adhered to in letter and spirit by all parties concerned.

In the case of Delhi Transport Corporation v Dal Chand Yadav & Ors, the Supreme Court held that the
certified standing orders are a part of the contract of employment between the employer and the employee.
Any change in the standing orders must be done in accordance with the provisions of the Industrial
Employment (Standing Orders) Act, 1946, and with the mutual agreement of the employer and the employee.

The binding nature of certified standing orders has been established in various cases. In the case of Y M
Raja Ram v. S Muthu Kumar, it was held that certified standing orders were binding on both the employer
and employee and any contravention of the same would lead to disciplinary action against the concerned
party. The Court further held that employees could only be dismissed in accordance with the provisions of
the certified standing orders and not otherwise.

In the case of Hindustan Steel Ltd. V. The Presiding Officer, Labour Court, it was held that certified
standing orders override any other terms of employment which are in conflict with the standing orders. It
was further held that any alterations in the certified standing orders must be made in compliance with the
provisions of the Industrial Employment (Standing Orders) Act, 1946.

The Industrial Employment (Standing Orders) Act, 1946, provides the legal framework for certified standing
orders in India. The Act defines a standard format for the standing orders policy and prescribes the process
of drafting and certifying them.

Further, various court cases have upheld the legal sanctity of the certified standing orders. In Express
Newspapers Ltd vs Its Workmen, it was ruled that standing orders provide an essential motive for
Industrial Relations by ensuring that both the employees and employers are aware of their rights and
responsibilities. It is also observed in Lakshmi Mills Company Limited (2014) where the court observed
that certified standing orders benefit both employers and employees by establishing mutually agreeable
work conditions and rules, reducing misunderstanding, and improving working relationships.

Moreover, the Code on Occupational Safety, Health, and Working Conditions Act, 2020, provides further
guidelines for the employers in regard to working conditions, safety measures, and compensation. The Code
applies to all workers, including casual, temporary, and contractual employees.

The Industrial Employment (Standing Orders) Act, 1946, provides the legal framework for drafting and
certifying the standing orders. The Act provides for the constitution of a certifying officer, the procedure for
certification, the period of validity of the certified standing orders, and the consequences of non-compliance
with the standing orders.

Section 10 of the Act provides that any contravention of the certified standing orders constitutes a
misconduct by the employee, which may lead to disciplinary action by the employer.

vi) POSTING OF STANDING ORDERS

(Covered in Section 9 above).

D) MODIFICATION AND TEMPORARY APPLICATION OF MODEL

STANDING ORDERS
Section 10 provides that the standing orders finally certified under this Act shall not, except on agreement
between the employer and the workmen or a trade union or other representative body of the workmen, be
liable to modification until the expiry of six months from the date on which the standing orders or the last
modifications thereof came into operation.
Subject to the provisions of sub-section (1), an employer or workman or a trade union or other representative
body of the workmen may apply to the Certifying Officer to have the standing orders modified, and such
application shall be accompanied by five copies of the modifications proposed to be made, and where such
modifications are proposed to be made by agreement between the employer and the workmen or a trade
union or other representative body of the workmen, a certified copy of that agreement shall be filed along
with the application.
The foregoing provisions of this Act shall apply in respect of an application under sub-section (2) as they
apply to the certification of the first standing orders.
Nothing contained in sub-section (2) shall apply to an industrial establishment in respect of which the
appropriate Government is the Government of the State of Gujarat or the Government of the State of
Maharashtra.

In Shahadara Saharanpur Light Railway Co. vs. SS Railway Workers Union, the Standing Order
relating to the termination of service of a permanent workman was modified requiring the employer to give
reasons and communicating the same to the workmen in addition to giving one month’s notice or one
month’s pay in lieu of notice. The modification was held to be fair and reasonable. But the modification of
the Standing Orders requiring the giving of second show cause notice at the stage of imposing punishment
of removal cannot be considered as fair and reasonable. It was held that Section 10 does not state that once a
Standing Order is modified and the modification is certified, no further modification is permissible except
upon proof that new circumstances have arisen since the last modification. An application for modification
would ordinarily be made where:
(1) A change of circumstances has occurred, or
(2) Where experience of the working of the Standing Orders last certified results in inconvenience,
hardship, anomaly, etc, or
(3) Where some fact was lost sight of at the time of certification, or
(4) Where the applicant feels that a modification will be more beneficial.

It was held in Salem Erode Electricity Distribution Company (P) Ltd. vs. Their Employee’s Union, that
under the present Act, if the workmen are dissatisfied with the operation of the existing Standing Orders
they can apply to the Certifying Officer for modification. Before the amendment of section 10 giving right to
the workmen to apply for any modification in the Standing Orders, the only course open to the workmen to
adopt for securing any modification in the existing Standing Orders was to raise an industrial dispute and
move the appropriate Government to refer the said the said dispute to the adjudication of the appropriate
Industrial Tribunal.

In SW Union vs. Chief Labour Commissioner, the Standing Orders in Bhilai Steel Plant applied two
different sets of leave rules to the employees depending upon the fact whether they were appointed prior to
or after April, 1960. An application under Section 10(2) for modification of Standing Orders so as to make
them uniform in application was made. The application for such modification was held to be maintainable
because uniformity of Standing Orders in application to all workmen was the essential attribute of Standing
Orders.

Section 12A provides that notwithstanding anything contained in sections 3 to 12, for the period
commencing on the date on which this Act becomes applicable to an industrial establishment and ending
with the date on which the standing orders as finally certified under this Act come into operation under
section 7 in that establishment, the prescribed model standing orders shall be deemed to be adopted in that
establishment, and the provisions of section 9, sub-section (2) of section 13 and section 13A shall apply to
such model standing orders as they apply to the standing orders so certified.
These provisions shall not apply to an industrial establishment in respect of which the appropriate
Government is the Government of the State of Gujarat or the Government of the State of Maharashtra.

In Voltas Limited vs. KD Kochargoankar and Another, the model Standing Orders were notified under
the Act and the petitioner had its own certified standing orders. Subsequently the model Standing Order was
was modified and Standing Order 4-C was added. It was held that every amendment to the model Standing
Orders does not per se become applicable to an industrial establishment which has its own certified Standing
Order. The only way in which the workmen could get the benefit of the modified model Standing Order
would be to get their own Standing Order amended and certified in accordance with the provisions of the
Act. Until such modification and certification is made they would continue to be governed by their certified
Standing Orders.

E) INTERPRETATION AND ENFORCEMENT OF STANDING ORDERS

Section 13A provides that if any question arises as to the application or interpretation of a standing order
certified under this Act, any employer or workman or a trade union or other representative body of the
workmen] may refer the question to any one of the Labour Courts constituted under the Industrial Disputes
Act, 1947, and specified for the disposal of such proceeding by the appropriate Government by notification
in the Official Gazette, and the Labour Court to which the question is so referred shall, after giving the
parties an opportunity of being heard, decide the question and such decision shall be final and binding on the
parties.

In ME & R Industries vs. Workmen, the question related to the interpretation of the Standing Order which
provided that ‘commission of any act subversive of discipline or good behavior within the premises or
precincts of the establishment’ by a workman shall amount to misconduct. It was held that the words “within
the premises or precincts of the establishment” refer not to the place where the act which is subversive or
discipline or good behavior is committed but where the consequence of such an act manifests itself. In other
words, an act, wherever committed, if it has the effect of subverting discipline or good behavior within the
premises or precincts of the establishment, it will amount to misconduct under the Standing Order.

It was held in VK Verma vs. Hindustan Machine Tools Ltd. & Another, that where provision is made in
the Standing Orders for deduction of wages for absence from duty, it cannot be said to be by way of penalty.
It was further held that habitual late attendance is a misconduct under Standing Orders and action of
management in taking disciplinary action besides deducting wages is legal and proper.

In Ram Asrey and Others vs. Labour Court II Kanpur and Another, the petitioners had assaulted one
Junior Officer in front of the factory gate when he came out of the factory after finishing his day’s work. It
was held that assault amounted to misconduct being connected with the performance of the Junior Officer’s
duty and it is subversive of discipline and efficiency within the mill premises.

It was held in The Rajasthan State Road Transport Corporation and Another vs. Krishna Kant etc,
that the certified Standing Orders are not in the nature of delegated/subordinate legislation under the
Industrial Employment (Standing Orders) Act, 1946. after certification standing orders do not become part
of the Act. The constitute the conditions of service of the employees which are binding upon both the
employer and the employees.

F) PENALTIES AND PROCEDURE

The concerned provision is Section 13 which states that An employer who fails to submit draft standing
orders as required by section 3, or who modifies his standing orders otherwise than in accordance with
section 10, shall be punishable with fine which may extend to five thousand rupees, and in the case of a
continuing offence with a further fine which may extend to two hundred rupees for every day after the first
during which the offence continues.
An employer who does any act in contravention of the standing orders finally certified under this Act or his
industrial establishment shall be punishable with fine which may extend to one hundred rupees, and in the
case of a continuing offence with a further fine which may extend to twenty-five rupees for every day after
the first during which the offence continues.
No prosecution for an offence punishable under this section shall be instituted except with the previous
sanction of the appropriate Government.
No Court inferior to that of a Metropolitan Magistrate or Judicial Magistrate of the second class shall try any
offence under this section.

Management of Safdarjung Hospital v. Kuldip Singh (1993) 3 SCC 571

In this case, the Supreme Court of India held that the standing orders must be unambiguous, precise and
clear in their scope and application. The court emphasized the importance of ensuring that the standing
orders are drafted in a manner that can be easily understood by the employees. The court also held that
standing orders cannot be modified unilaterally by the employer and any changes must be made through the
prescribed procedure.

In Delhi Cloth and General Mills Co. Ltd. v. Workmen, the Supreme Court of India held that the standing
orders must be framed in a fair and reasonable manner and must not be arbitrary or discriminatory. The
court also held that the standing orders cannot be used to restrict the fundamental rights of the employees.

In State of Maharashtra v. Ramdas Shrinivas Nayak, the Supreme Court of India held that the
certification of the standing orders is not a mere formality and must be done with due diligence. The court
held that the certifying officer must ensure that the standing orders are in compliance with the Industrial
Employment (Standing Orders) Act, 1946, and must be in accordance with the principles of natural justice.

In Ahmedabad Textile Industry’s Research Association v. State of Bombay, the Supreme Court of India
held that the standing orders must be reasonable and must not be in contravention of any existing law. The
court also held that the standing orders must not be against public policy and must not violate the principles
of natural justice.

In Hyderabad Chemical and Pharmaceutical Works Ltd. v. State of Andhra Pradesh, the Andhra
Pradesh High Court held that the standing orders must be framed in a manner that takes into consideration
the interests of both the employer and the employees. The court held that the standing orders must balance
the interests of both parties and must not be oppressive or unjust towards the employees.

PAYMENT OF SUBSISTENCE ALLOWANCE

According to Section 10A of the Act, where any workmen is suspended by the employer pending
investigation or inquiry into complaints or charges of misconduct against him, the employer shall pay to
such workman subsistence allowance:
(a) at the rate of fifty per cent. of the wages which the workman was entitled to immediately preceding
the date of such suspension, for the first ninety days of suspension; and
(b) at the rate of seventy-five per cent. of such wages for the remaining period of suspension if the delay
in the completion of disciplinary proceedings against such workman is not directly attributable to the
conduct of such workman.
If any dispute arises regarding the subsistence allowance payable to a workman under sub-section (1) the
workman or the employer concerned may refer the dispute to the Labour Court, constituted under the
Industrial Disputes Act, 1947, within the local limits of whose jurisdiction the industrial establishment
wherein such workman is employed is situate and the Labour Court to which the dispute is so referred shall,
after giving the parties an opportunity of being heard, decide the dispute and such decision shall be final and
binding on the parties.
Notwithstanding anything contained in the foregoing provisions of this section, where provisions relating to
payment of subsistence allowance under any other law for the time being in force in any State are more
beneficial than the provisions of this section, the provisions of such other law shall be applicable to the
payment of subsistence allowance in that State.

In Kalyanpur Keshav Venkatrai Pai vs. Corporation Bank, the petitioner was Manager of Corporation
Bank, Kalbadevi Branch, Bombay. The petitioner claimed subsistence allowance based on Bombay Shops
and Establishments Act, 1948 and the Standing Orders Act, 1946. It was held that the Standing Orders Act
and rules will apply to only such of the employees of the Shops Act who would be “workmen” within the
meaning of the Standing Orders Act and rules framed thereunder. Employees who are not workmen as
above will not be covered by Section 38B of Bombay Shops and Establishment Act. By applying the rule of
harmonious construction, it is clear that legislation could not have intended to confer on managerial
employees the benefits if benevolent provisions meant primarily to protect ‘workman’. Since Manager of a
Bank is not a workman he cannot claim subsistence allowance.

It was held in Transport Manager vs. Vilas Sanu Deokar and Others, that if an employer does not
provide work to a Badli workman by issuing no duty order, it would not amount to suspension from work. A
person can be suspended from work provided there is a vested right in the workman to secure work from the
employer everyday while the contract of employment subsists. However, in the case of a Badli workman,
the contract of employment comes into effect only on the day he is given employment, and therefore, the
question of suspension from work on account of a ‘no duty order’ does not arise. A Badli workman is one
who performs his duty as and when work is made available to him by the employer. If there can be
suspension from work of a Badli workman, the question of being entitled to subsistence allowance during
the period he is not allotted work does not arise.

In Vijaya Bank vs. Shyamlal Kumar Lodh, respondent was an employee of Vijaya Bank which was a
nationalised bank. Shyamlal Kumar gave an application before the Labour Court which was constituted
under the Industrial Disputes Act for an award computing his subsistence allowance. The appropriate
Government in relation to the employee is the Central Government and the employee had filed his
application before the Labour Court constituted by the State Government. Therefore, the application was
contested by the appellant on the ground that the Labour Court not being constituted by the appropriate
Government had no jurisdiction. The Labour Court overruled the objection of the Bank and a Single Judge
of High Court upheld it. Division Bench of High Court also confirmed the Labour Court’s order. Hence, the
Bank preferred an appeal before the Supreme Court. The appeal was dismissed with costs of Rs. 25,000/- to
be paid to the respondent. It was observed that under Section 10A(2) of the Industrial Employment
(Standing Orders) Act, Labour Court constituted under the Industrial Disputes Act, had jurisdiction to decide
any dispute regarding subsistence allowance arising within the local limits of whose jurisdiction the
establishment was situated.

DUTIES OF CERTIFYING OFFICER

As per Section 3 of the Act, the certifying officer has to receive the five copies of draft standing orders
proposed by the employer, for adoption in his industrial establishment.

As per Section 4 of the Act, it shall be the function of the certifying officer to adjudicate upon the fairness or
reasonableness of the provisions mentioned in the standing orders. He has to ascertain that the terms of the
draft standing order are in conformity with the provisions of the Act.

As per Section 5 of the Act, the certifying officer shall forward a copy of the draft standing order to the
trade unions, once he receives the receipt of the draft standing order submitted by the employer of the
industrial establishment. It should be noted that by way of such forwarding, the trade unions are given a
chance to raise objections to the draft standing order submitted by the employer. Further, the role of the
certifying officer extends to deciding whether to accept the modification presented by trade unions or
not. That means, the decision to modify or amend the same is the discretion of the certifying officer.
The certifying officer has also a role to certify the draft standing orders, with or without modification.

As per Section 8 of the Act, the registration of the final certified copy shall be done by the certifying officer
in the register. Further, he shall furnish an approved copy of Standing Orders to any person applying for it
upon payment of the prescribed fee.

As per Section 11 of the Act, Every Certifying Officer and appellate authority shall have all the powers of a
Civil Court for the purposes of receiving evidence, administering oaths, enforcing the attendance of
witnesses, and compelling the discovery and production of documents, and shall be deemed to be a civil
court within the meaning of sections 345 and 346 of the Code of Criminal Procedure, 1973.
Clerical or arithmetical mistakes in any order passed by a Certifying Officer or appellate authority, or errors
arising therein from any accidental slip or omission may, at any time, be corrected by that Officer or
authority or the successor in office of such Officer or authority, as the case may be.

In Associated Industries vs. B.B. Singh, Supreme Court observed that the fact that under Section 11 of the
Act, the Certifying Officer and the Appellate Authority have all the powers of a Civil Court for certain
specified purpose will not convert them to a ‘Court’, nor he fact that the matter was agitated in a writ
petition before the High Court will make the proceeding before the Labour Court “a civil proceeding in a
Court”.

UNIT-3

A) INDUSTRIAL DISPUTE AND INDIVIDUAL DISPUTE

The main objective of the Act, as pointed out in the Preamble is “to make provision for the investigation and
settlement of industrial dispute”. Therefore the definition of “industrial dispute” has special significance.
The following elements should exist to constitute an industrial dispute:
(1) A dispute of difference between (a) employers and employers, or (b) employers and workmen, or (c)
workmen and workmen.
(2) The dispute or difference should be connected with (a) employment or non-employment, or (b)
terms of employment, or (c) conditions of labour of any person.
(3) The dispute may be in relation to any workman or workmen or any other person in whom they are
interested as a body.

The expression “of any person” appearing in the last line of Section 2(k) means that the person may not be a
workman but he may be someone in whose employment, terms of employment or conditions of labour the
workmen as a class have a true and substantial interest. Industrial dispute is not restricted to dispute between
an employer and a recognised majority union. It also means a difference between employer and workmen
including a minority union.

Before an industrial dispute can be raised there must be first established a relationship of employer and
employee associating together, the former following a trade or business, etc., and the latter following any
calling, service or employment, etc., in aid of the employee’s enterprise. It is not necessary that there must
be a profit motive but the enterprise must be analogous to trade or business in a commercial sense. For a
dispute to be industrial dispute it is necessary that a demand must be first raised on management and rejected
by them.
It was held in Jadhav JH vs. Forbes Gobak Ltd., that in order that a dispute relating to a single workman
may be an industrial dispute it must either be espoused by the union or by a number of workmen. In the
present case the individual dispute was espoused by the union. The Court also pointed out that there was no
particular form prescribed to effect such espousal. The objection in this case was that the union espousing
the cause of workman was not the majority union but the objection was rightly rejected by the Tribunal and
wrongly accepted by the High Court. The Supreme Court said that the High Court should not have upset the
finding of the Tribunal without holding that the conclusion was irrational or perverse.

Non-employment includes retrenchment as well as refusal to reinstate.

Whether a single workman who is aggrieved by an action of an employer can raise industrial dispute?
Before insertion of Section 2A of the Act, an individual dispute could not per se be an industrial dispute, but
it could become one if taken up by the Trade Union or a number of workmen. The section is of limited
application. It does not declare all individual disputes to be an industrial dispute. A dispute connected with a
discharged, dismissed, retrenched or terminated workman shall be an industrial dispute. If the dispute or
difference is connected with other matter then it would have to satisfy the test laid down in judicial decisions.

Thus, only a collective dispute could constitute an industrial dispute but collective dispute does not mean
that the dispute should either be sponsored by a recognised union or that all or majority of the workmen of
an industrial establishment should be parties to it.

Where an industrial dispute is espoused by union the question of the employee being a member of the union
when the cause arose is immaterial. Those taking up the cause of the aggrieved workman must be in the
same employment, i.e., there must be community of interest when the act complained against happened and
not when the dispute was referred to.

In order to make a dispute industrial dispute it is not necessary that there should be a resolution of
substantial or appreciable number of workmen. What is necessary is that there must be some expression of
“collective will” of substantial or appreciable number of workmen taking up the cause of the aggrieved
workmen.

B) ARENA OF INTERACTION AND PARTICIPANTS

(a) INDUSTRY

The Industrial Disputes (Amendment) Act, 1982 enacts altogether a new definition of Industry. It nullifies
the effect of many judicial decisions and attempts to clarify the conflicting views arising out of different
interpretations of the word ‘industry’ adopted by the Supreme Court in various cases. On account of
conflicting judicial decisions it had become difficult to understand the meaning of the word ‘industry’. the
word is defined under Section 2(j).

Some working principles have been evolved by the Supreme Court in a number of decisions which furnish a
guidance in determining what are the attributes or characteristics which would indicate that an undertaking
is analogous to trade or business. The first of such principles was stated in State of Bombay vs. Bombay
Hospital Mazdoor Sabha, wherein it was held that an activity systematically or habitually undertaken for
the production or distribution of good or for the rendering of material services to the community at large or a
part of such community with the help of employees is an undertaking.

In Bangalore Water Supply vs. A. Rajappa, a 7 Judges’ Bench of the Supreme Court exhaustively
considered the scope of industry and laid down the following test:
Triple Test: Where there is (i) systematic activity, (ii) organised by co-operation between employer and
employee, (iii) for the production and/or distribution of goods and services calculated to satisfy human
wants and wishes, prima facie, there is an industry in that enterprise. The following points were also
emphasized in the case:
(1) Industry does not include spiritual or religious services or services geared to celestial bliss, eg., making,
on a large scale, prasad or food. It includes material services and things.
(2) Absence of profit motive or gainful objective is irrelevant.
(3) The true focus is functional and the decisive test is the nature of the activity with special emphasis on the
employer-employee relations.
Dominant Nature Test: Where a complex of activities, some of which qualify for exemption, others not,
involve employees on the total undertaking some of whom are not workmen or some departments are not
productive of goods and services if isolated, even then the predominant nature of the services and the
integrated nature of the departments will be true test, the whole undertaking will be “industry”, although
those who are not workmen by definition may not benefit by status.

DN Banerjee vs. PR Mukherjee is a leading case on the point whether Municipal Corporation is an
industry or not. In the case, the Budge Budge Municipality dismissed two of its employees on charges for
negligence, insubordination and indiscipline. The Municipal Workers Union questioned the propriety of the
dismissal and the matter was referred to the Industrial Tribunal. The Tribunal directed reinstatement and the
award was challenged by the Municipality on the ground that its duties being connected with the local self-
government it was not an industry and the dispute was not an industrial dispute. The Supreme Court
observed that in the ordinary sense industry of business means an undertaking where capital and labour co-
operate with each other for the purpose of producing wealth in the shape of goods, tools, etc., and for
making profits. The Municipal Corporation was held to be an industry.

In Management of Hospitals, Orissa vs. Their Workmen it was held that the “hospital run by the
Government as a part of its function is not an industry. Hospitals run by the State of Orissa are places where
persons can get treated. They are run as departments of Government. The mere fact that payment is accepted
in respect of some beds cannot lead to the inference that the hospitals are run as a business in a commercial
way. Primarily, the hospitals are meant as free service by the Government to the patients without any profit
motive”.

In University of Delhi vs. Ram Nath the respondent was employed as driver by the University College for
Women along with one other driver, who was initially employed by Delhi University but later transferred to
University College for Women. The University found that running the buses was resulting in losses and
hence terminated the services of the two drivers. The termination was challenged on the ground that the
drivers were workmen and the termination amounted to retrenchment. They demanded retrenchment
compensation. The Tribunal decided the matter in favour of the drivers and the University challenged the
validity of the order on the ground that the University was not an industry. The Supreme Court, in this case
held that the University was not an industry but this case was overruled by the Bangalore Water Supply case
where the Supreme Court held that even a University would be an industry although such of its employees
are not workmen within the meaning of its definition and may not get the desired benefits that a workmen
may be entitled to.

In Duttatraya Gopal Paranjape vs. Rashtriya Mill Mazdoor Sangh and Others, the respondent Trade
Union employed Organising and Assistant Secretaries and also clerks, accountants, peons, etc. There were
about 60 to 100 of such employees. The services of some of them were dispensed with. Keeping in view the
test laid down in the Bangalore Water Supply case, it was held that the respondent union is an industry.

(b) WORKMAN
The definition of workman is important because the Act aims at investigation and settlement of industrial
dispute which implies a difference between employer and workman.

Section 2(s) defines workman as any person (including an apprentice) employed in any industry to do any
manual, unskilled, skilled, technical, operational, clerical or supervisory work for hire or reward, whether
the terms of employment be express or implied, and for the purposes of any proceeding under this Act in
relation to an industrial dispute, includes any such person who has been dismissed, discharged or retrenched
in connection with, or as a consequence of, that dispute, or whose dismissal, discharge or retrenchment has
led to that dispute, but does not include any such person—
(i) who is subject to the Air Force Act, 1950, or the Army Act, 1950, or the Navy Act, 1957; or
(ii) who is employed in the police service or as an officer or other employee of a prison; or
(iii) who is employed mainly in a managerial or administrative capacity; or
(iv) who, being employed in a supervisory capacity, draws wages exceeding ten thousand rupees per
mensem or exercises, either by the nature of the duties attached to the office or by reason of the powers
vested in him, functions mainly of a managerial nature.

In Punjab National Bank vs. Ghulam Dastagir, the respondent was personal driver of area manager of the
appellant Bank. Area manager was given personal allowance by bank to enable him to employ personal
driver of his own jeep. All requirements in maintaining jeep were borne by the bank. There was no material
to show that the said driver was employed by the bank, was paid his salary by bank and was included in the
list of employees of the bank. It was held that the driver was not employed by the bank and was not a
workman within Section 2(s) of the Act.

In Divisional Manager, New India Assurance Company Ltd. vs. A. Sankaralingam, the respondent was
appointed as a sweeper-cum-water carrier on a monthly wage basis. It was held that even a part time
workman would be covered within the definition of workman if he works under the control and supervision
of an employer.

In Ved Prakash Gupta vs. Messrs Detton Cables India (P) Ltd., the appellant was employed as a Security
Inspector at the gate of the factory premises. He was held to be a workman within this section because the
duty of the appellant was neither managerial nor supervisory in nature in the sense in which these terms are
understood in industrial law.

In Titaghur Papers Mills Co. Ltd. vs. 1st Industrial Tribunal, a person with technical expertise was also
held to be a workman. Although they did not run the machines themselves but stood by and guarded
ordinary workmen in the matter of running the machine, their cannot be said to be purely supervisory or
administrative.

In Miss A Sundarambal vs. Government of Goa, Daman and Diu, it was held that in order to be a
workman an employee should be employed to do any skilled, or unskilled, manual, supervisory, technical or
clerical work. Judged in this light a teacher cannot be called a workman.

In Indian Overseas Bank vs. Workmen, All India Overseas Bank Employees Union, the question was
whether jewel appraisers engaged by the bank while granting jewel loans, could be treated as workers to be
absorbed as part-time staff of the bank or not. The Supreme Court held that the jewel appraisers were not
employees of the bank as they were different from regular employees in many respects, such as they had no
fixed working hours, were not paid monthly wages but only commission, that too, by the borrowers and
could carry on any other occupation.

In Kesava Bhatt vs. Shree Ram Ambulam Trust, the Kerala High Court held that a priest is not a
workman. In its opinion a pujari cannot be equated with a mere wage earner and his services cannot be
treated as manual or clerical, etc. The deity or God he served cannot be looked upon as a profit producing
scheme and the owner of a temple cannot be equated to an industrial or commercial employer.
In TP Srivastava vs. National Tobacco Co of India Ltd., it was held by the Supreme Court that a section
salesman employed by a respondent company is not a workman because the duties of the appellant require
imaginative and creative mind which could not be termed as either manual, skilled, unskilled or clerical in
nature.

(c) EMPLOYER

Section 2(g) of the Act states the meaning of employer 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 or in relation to an industry
carried on by or on behalf of a local authority, the chief executive officer of that authority.

It does not imply that under this Act the employer only means the Central or State Government or a local
authority and where the industry is carried on by ant other authority such authority shall not be employer.
This question was sought to be argued before the Federal Court in Western India Automobile Association
vs. The State of Bombay. The Federal Court was of the opinion that the definition is neither exhaustive nor
exclusive. The industries run or owned by the authorities other than the Central and State Governments or
local authorities, were also covered by this expression under the Act.

Where a worker or a 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.

C) SETTLEMENT OF INDUSTRIAL DISPUTE

The main object of the Industrial Disputes Act is investigation and settlement of industrial disputes. With
that object in view various authorities have been created by the Act. The adjudication of industrial disputes
has at the first instance been kept out of the jurisdiction of Municipal Courts so that efforts may be made for
settlement of such disputes through some other agencies.

The various modes of settlement of disputes provided by the Act may be broadly classified under three
heads:
I. Conciliation
II. Adjudication
III. Arbitration

The authorities that make use of conciliation as the sole method of settlement of disputes are the Works
Committee, Conciliation Officer and Board of Conciliation.

The adjudication authorities are the Labour Courts and Tribunals.

I) WORKS COMMITTEE
Section 3 of the Act provides for the constitution of a works committee by the appropriate Government in
the following words:
In the case of any industrial establishment in which one hundred or more workmen are employed or have
been employed on any day in the preceding twelve months, the appropriate Government may by general or
special order require the employer to constitute in the prescribed manner a Works Committee consisting of
representatives of employers and workmen engaged in the establishment so however that the number of
representatives of workmen on the Committee shall not be less than the number of representatives of the
employer. The representatives of the workmen shall be chosen in the prescribed manner from among the
workmen engaged in the establishment and in consultation with their trade union, if any, registered under the
Indian Trade Unions Act, 1926
It shall be the duty of the Works Committee to promote measures for securing and preserving amity and
good relations between the employer and workmen and, to that end, to comment upon matters of their
common interest or concern and endeavour to compose any material difference of opinion in respect of such
matters.

The following are the duties of the Works Committee:

A. To promote measures for securing and preserving amity and good relations between the employers and
workmen,
B. To achieve the above object, it is their duty to comment upon matters of common interest or concern of
employers and workmen,
C. To endeavour to compose any material difference of opinion in respect of matters of common interest or
concern between employers and workmen.

The main purpose of creating the Works Committee is to develop a sense of partnership between the
employer and his workmen. It is a body which aims to promote good-will and measures of common interest.

A rationalisation scheme was introduced in a Jute Company. The Tribunal has held that the workmen were
entitled to wages for the period of lock-out. It was contended before the Supreme Court in Northbrook Jute
Co. Ltd. vs. Their Workmen, that the Works Committee, which was duly constituted under the Act, had
approved the scheme of rationalisation after due consideration. It was further pleaded that as the
representatives of workmen on the Works Committee had accepted the scheme , the workmen should be
have deemed to have agreed to it. The Supreme Court observed that the representatives of workmen on
Works Committee do not represent the workmen for all purposes but only for the purpose of the functions of
the Works Committee. The Works Committee was not intended to supplant or supersede the Unions for the
purpose of collective bargaining, they are not entitled to consider real or substantial changes in the
conditions of service, their task is only to smooth away frictions that might arise between the workmen and
the management in the day-to-day work.

II) CONCILIATION MACHINERY

According to Section 2(d), a “conciliation officer” means a conciliation officer appointed under this Act.
And as per Section 2(e), a “conciliation proceeding” means any proceeding held by a conciliation officer or
Board under this Act;

Section 4 provides that the appropriate Government may, by notification in the Official Gazette, appoint
such number of persons as it thinks fit, to be conciliation officers, charged 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.

According to Section 2(c), “Board” means a Board of Conciliation constituted under this Act.
Section 5 provides for the constitution of a Conciliation Board by stating that the appropriate Government
may as occasion arises by notification in the Official Gazette constitute a Board of Conciliation for
promoting the settlement of an industrial dispute.
A Board shall consist 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 and any person appointed to represent a party shall be
appointed on the recommendation of that party. Provided that, if any party fails to make a recommendation
as aforesaid within the prescribed time, the appropriate Government shall appoint such persons as it thinks
fit to represent that party.
A Board, having the prescribed quorum, may act notwithstanding the absence of the chairman or any of its
members or any vacancy in its number. Provided that if the appropriate Government notifies 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, as the case may be, has been appointed.

It is to be noted that the Chairman must be an “independent person” which means a person unconnected with
the industrial dispute or with the industry affected by such dispute.

Section 8 provides that if, for any reason a vacancy (other than a temporary absence) occurs in the office of
the chairman or any other member of a Board, the appropriate Government, shall appoint another person in
accordance with the provisions of this Act to fill the vacancy, and the proceeding may be continued before
the Board from the stage at which the vacancy is filled.

Section 9 provides the finality of orders constituting Boards. It states that no order of the appropriate
Government or of the Central Government appointing any person as the chairman or any other member of a
Board shall be called in question in any manner; and no act or proceeding before any Board shall be called
in question in any manner on the ground merely of the existence of any vacancy in, or defect in the
constitution of, such Board.
No settlement arrived at in the course of a conciliation proceeding shall be invalid by reason only of the fact
that such settlement was arrived at after the expiry of the period referred to in sub-section (6) of section 12
or sub-section (5) of section 13, as the case may be.
Where the report of any settlement arrived at in the course of conciliation proceeding before a Board is
signed by the chairman and all the other members of the Board, no 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.

Section 10 states that where the appropriate Government is of opinion that any industrial dispute exists or is
apprehended, it may at any time, by order in writing, refer the dispute to a Board for promoting a settlement
thereof. 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, the appropriate Government, if satisfied that the
persons applying represent the majority of each party, shall make the reference accordingly. Where an
industrial dispute has been referred to a Board, under this section, 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.

Section 11 provides the procedures and powers of the conciliation officers and Boards of Conciliation.
Subject to any rules that may be made in this behalf, a Board, Court shall follow such procedure as the
authority concerned may think fit.
A conciliation officer or a member of a Board may for the purpose of inquiry into any existing or
apprehended industrial dispute, after giving reasonable notice, enter the premises occupied by any
establishment to which the dispute relates.
Every Board shall have 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;
and every inquiry or investigation by a Board shall be deemed to be a judicial proceeding within the
meaning of sections 193 and 228 of the Indian Penal Code.
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 this Act, and for the aforesaid 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.
All conciliation officers and members of a Board shall be deemed to be public servants within the meaning
of section 21 of the Indian Penal Code.

Section 12 provides the duties of the Conciliation Officers. It states that where any industrial dispute exists
or is apprehended, the conciliation officer may, or where the dispute relates to a public utility service and a
notice under section 22 has been given, shall hold conciliation proceedings in the prescribed manner.
The conciliation officer shall, for the purpose of bringing about a settlement of the dispute, without delay,
investigate the dispute and all matters affecting the merits and the right settlement thereof and may do all
such things as he thinks fit for the purpose of inducing the parties to come to a fair and amicable settlement
of the dispute.
If a settlement of the dispute or of any of the matters in dispute is arrived at in the course of the conciliation
proceedings the conciliation officer shall send a report thereof to the appropriate Government or an officer
authorised in this behalf by the appropriate Government together with a memorandum of the settlement
signed by the parties to the dispute.
If no such settlement is arrived at, the conciliation officer shall, as soon as practicable after the close of the
investigation, 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 thereof,
together with a full statement of such facts and circumstances, and the reasons on account of which, in his
opinion, a settlement could not be arrived at.
If, on a consideration of the report referred to in sub-section (4), the appropriate Government is satisfied that
there is a case for reference to a Board, Labour Court, Tribunal or National Tribunal, it may make such
reference. Where the appropriate Government does not make such a reference it shall record and
communicate to the parties concerned its reasons therefor.
A report under this section shall be submitted within fourteen days of the commencement of the conciliation
proceedings or within such shorter period as may be fixed by the appropriate Government. Provided that,
subject to the approval of the conciliation officer, 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.

Section 13 provides the duties of Board. The section provides that where a dispute has been referred to a
Board under this Act, it shall be the duty of the Board to endeavour to bring about a settlement of the same
and for this purpose the Board shall, in such manner as it thinks fit and without delay, investigate the dispute
and all matters affecting the merits and the right settlement thereof and may do all such things as it thinks fit
for the purpose of inducing the parties to come to a fair and amicable settlement of the dispute.
If a settlement of the dispute or of any of the matters in dispute is arrived at in the course of the conciliation
proceedings, the Board shall send a report thereof to the appropriate Government together with a
memorandum of the settlement signed by the parties to the dispute.
If no such settlement is arrived at, the Board shall, as soon as practicable after the close of the investigation,
send to the appropriate Government a full report setting forth the proceedings and steps taken by the Board
for ascertaining the facts and circumstances relating to the dispute and for bringing about a settlement
thereof, together with a full statement of such facts and circumstances, its findings thereon, the reasons on
account of which, in its opinion, a settlement could not be arrived at and its recommendations for the
determination of the dispute.
If, on the receipt of a report under sub-section (3) in respect of a dispute relating to a public utility service,
the appropriate Government does not make a reference to a Labour Court, Tribunal or National Tribunal
under section 10, it shall record and communicate to the parties concerned its reasons therefor.
The Board shall submit its report under this section within two months of the date on which the dispute was
referred to it or within such shorter period as may be fixed by the appropriate Government. Provided that the
appropriate 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. Provided further that the time for the submission
of the report may be extended by such period as may be agreed on in writing by all the parties to the dispute.

It was held by the Supreme Court in Sharad Kumar vs. Government of NCT of Delhi, that the jurisdiction
vested in the appropriate Government under Section 12(5) of the Act to make or refuse a reference was
administrative in nature.

Section 16 provides the form of the report by the Board. The report of a Board shall be in writing and shall
be signed by all the members of the Board. Provided that nothing in this section shall be deemed to prevent
any member of the Board from recording any minute of dissent from a report or from any recommendation
made therein.

Section 17 provides for the publication of the report. Every report of a Board together with any minute of
dissent recorded therewith, shall, within a period of thirty days from the date of its receipt by the appropriate
Government, be published in such manner as the appropriate Government thinks fit.

Section 17A states that an award shall become enforceable on the expiry of thirty days from the date of its
publication under section 17.

Section 18 states that a settlement arrived at in the course of conciliation proceedings under this Act which
has become enforceable shall be binding on—
(a) all parties to the industrial dispute;
(b) all other parties summoned to appear in the proceedings as parties to the dispute, unless the Board,
records the opinion that they were so 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 part.

Section 20 provides that a conciliation proceeding shall be deemed to have commenced on the 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, as the case may be.
A conciliation proceeding shall be deemed to have concluded—
(a) where a settlement is arrived at, when a memorandum of the settlement is signed by the parties to the
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.

Section 21 states that there shall not be included in any report or award under this Act any information
obtained by a conciliation officer, Board, in the course of any investigation or inquiry as to a trade union or
as to any individual business (whether carried on by a person, firm or company) which is not available
otherwise than through the evidence given before such officer, Board, if the trade union, person, firm or
company, in question has made a request in writing to the conciliation officer, Board, that such information
shall be treated as confidential; nor shall such conciliation officer or any individual member of the Board, or
any person present at or concerned in the proceedings disclose any such information without the consent in
writing of the secretary of the trade union or the person, firm or company in question, as the case may be.
Provided that nothing contained in this section shall apply to a disclosure of any such information for the
purposes of a prosecution under section 193 of the Indian Penal Code.

III) COURT OF ENQUIRY

Section 2(f) defines “Court” as a Court of Enquiry constituted under the Act.

Section 6 provides for the constitution of Courts of Enquiry by the appropriate Government and states that
the appropriate Government may as occasion arises by notification in the Official Gazette constitute a Court
of Inquiry for inquiring into any matter appearing to be connected with or relevant to an industrial dispute.
A Court may consist of one independent person or of such number of independent persons as the appropriate
Government may think fit and where a Court consists of two or more members, one of them shall be
appointed as the chairman.
A Court, having the prescribed quorum, may act notwithstanding the absence of the chairman or any of its
members or any vacancy in its number. Provided that, if the appropriate Government notifies the Court that
the services of the chairman have ceased to be available, the Court shall not act until a new chairman has
been appointed.

Section 10 provides that where the appropriate Government is of opinion that any industrial dispute exists or
is apprehended, it may at any time, by order in writing, refer any matter appearing to be connected with or
relevant to the dispute to a Court for inquiry.

Section 14 provides that a Court shall inquire into the matters referred to it and report thereon to the
appropriate Government ordinarily within a period of six months from the commencement of its inquiry.

The provisions of Sections 8, 9, 11, 16, 17, 17A and 21 shall apply to the Courts of Enquiry as well.

IV) VOLUNTARY ARBITRATION

Section 10A provides for voluntary reference of disputes to arbitration and states 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 and the 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 purposes 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; and
when any such notification is issued, the employers 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 (3A), 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, shall apply to arbitration under this section.

It was held in Karnal LK Sanghatan vs. Liberty Footwear Company, that when a dispute is referred for
arbitration under an agreement under Section 10A, the requirement of publication of agreement under sub
section (3) is mandatory before the arbitrator considers the merits of the dispute. Non-compliance of the
requirement would render the award invalid and unenforceable.

According to Section 11, subject to any rules that may be made in this behalf, an arbitrator, shall follow
such procedure as the arbitrator or other authority concerned may think fit.

According to Section 20, proceedings before an arbitrator under section 10A shall be deemed to have
commenced on the date or the reference of the dispute for arbitration and such proceedings shall be deemed
to have concluded on the date on which the award becomes enforceable under section 17A.

Provisions of Section 17A, 18 an 21 shall apply to such arbitrators as well.

V) ADJUDICATION: LABOUR COURT, TRIBUNAL AND NATIONAL TRIBUNAL

Section 7 provides for the constitution of Labour Courts and state that the appropriate Government may, by
notification in the Official Gazette, constitute one or more Labour Courts for the 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 this Act.
A Labour Court shall 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) *omitted*
(d) he has held any judicial office in India for not less than seven years; or
(e) he has been the presiding officer of a Labour Court constituted under any Provincial Act or State Act
for not less than five years.
(f) 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, as the case may be, before being appointed as the
presiding officer; or
(g) he is an officer of Indian Legal Service in Grade III with three years' experience in the grade.

In The Statesman (P) Ltd. vs. HR Deb, the question was whether a magistrate holds a judicial office. The
fact that the duties of a magistrate are partly judicial and partly other do not detract from the position that
while acting as a magistrate he is a judicial officer. The phrase ‘holding a judicial office’ postulates that
there is an office and that office is primarily judicial.

Section 7A provides that the constitution of Industrial Tribunals and state that the appropriate Government
may, by notification in the Official Gazette, constitute one or more Industrial Tribunals for the adjudication
of industrial disputes relating to any matter, whether specified in the Second Schedule or the Third Schedule
and for performing such other functions as may be assigned to them under this Act.
The Industrial Tribunal constituted by the Central Government under sub-section (1) shall also exercise, on
and from the commencement of Part XIV of Chapter VI of the Finance Act, 2017, the jurisdiction, powers
and authority conferred on the Tribunal referred to in section 7D of the Employees' Provident Funds and
Miscellaneous Provisions Act, 1952.
A Tribunal shall 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 Tribunal unless—
(a) he is, or has been, a Judge of a High Court; or
(aa) he has, for a period of not less than three years, been a District Judge or an Additional District
Judge;
(b) 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, as the case may be, before being appointed
as the presiding officer; or
(c) he is an officer of Indian Legal Service in Grade III with three years' experience in the grade.
The appropriate Government may, if it so thinks fit, appoint two persons as assessors to advise the Tribunal
in the proceeding before it.

Section 7B provides for the constitution of National Tribunals. It states that the Central Government may,
by notification in the Official Gazette, constitute one or more National Industrial Tribunals for the
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, or affected by, such disputes.
A National Tribunal shall consist of one person only to be appointed by the Central Government.
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.
The Central Government may, if it so thinks fit, appoint two persons as assessors to advise the National
Tribunal in the proceeding before it.

Section 7C provides the disqualifications of the presiding officers of the adjudicating authorities. The
section states that 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.

Section 7D provides the qualifications, terms and conditions of the officers of such authorities.
Notwithstanding anything contained in this Act, the qualifications, appointment, term of office, salaries and
allowances, resignation and removal and other terms and conditions of service of the Presiding Officer of
the Industrial Tribunal appointed by the Central Government under sub-section (1) of section 7A, shall, after
the commencement of the Tribunals Reforms Act, 2021, be governed by the provisions of Chapter II of the
said Act. Provided that the Presiding Officer appointed before the commencement of Part XIV of Chapter
VI of the Finance Act, 2017, shall continue to be governed by the provisions of this Act, and the rules made
thereunder as if the provisions of section 184 of the Finance Act, 2017 had not come into force.

Section 9 provides that No order of the appropriate Government or of the Central Government appointing
any person as the presiding officer of a Labour Court, Tribunal or National Tribunal shall be called in
question in any manner; and no act or proceeding before Court shall be called in question in any manner on
the ground merely of the existence of any vacancy in, or defect in the constitution of such Court.

Under Section 10, a dispute can be referred by the appropriate Government to any Board, Courts or
Tribunals.

In Sadhu Ram vs. Delhi Transport Corporation, the Conciliation Officer has reported to the Government
the fact of failure of conciliation proceeding. On this report, the Government referred the dispute to the
Labour Court. The Supreme Court held that the Government was justified in thinking that there was an
industrial dispute and, therefore, the reference to the Labour Court was within its powers.
Section 11A provides the power of the adjudicating authorities to give relief in case of discharge or
dismissal of workmen and states that where an industrial dispute relating to the discharge or dismissal of a
workman has been referred to a Labour Court, Tribunal or National Tribunal for adjudication and, in the
course of the adjudication proceedings, the Labour Court, Tribunal or National Tribunal, as the case may be,
is satisfied that the order of discharge or dismissal was not justified, it may, by its award, set aside the order
of discharge or dismissal and direct reinstatement of the workman on such terms and conditions, if any, as it
thinks fit, or give such other relief to the workman including the award of any lesser punishment in lieu of
discharge or dismissal as the circumstances of the case may require. Provided that in any proceeding under
this section the Labour Court, Tribunal or National Tribunal, as the case may be, shall rely only on the
materials on record and shall not take any fresh evidence in relation to the matter.

In Hindustan Machine Tools Limited, Bangalore vs. Mohd. Usman and Another, it was held that
Section 11A confers power on the Labour Court to evaluate the severity of misconduct and to access
whether punishment imposed by the employer is commensurate with the gravity of the misconduct.

In General Secretary, SICF Workers’ Union vs. MD KS CD Corporation Ltd and Others, the Supreme
Court observed that since Section 11A of the Act was not applicable in the case, the Labour Court had no
power to reappraise the evidence recorded by the enquiry officer.

Section 15 provides the duties of the authorities stating that where an industrial dispute has been referred to
a Labour Court, Tribunal or National Tribunal for adjudication, it shall hold its proceedings expeditiously
and shall, within the period specified in the order referring such industrial dispute or the further period
extended under the second proviso to sub-section (2A) of section 10], submit its award to the appropriate
Government.

According to Section 16 the award of a Labour Court or Tribunal or National Tribunal shall be in writing
and shall be signed by its presiding officer.

Section 17A provides that an award shall become enforceable on the expiry of thirty days from the date of
its publication under section 17. Provided that—
(a) if the appropriate Government is of opinion, in any case where the award has been given by a Labour
Court or Tribunal in relation to an industrial dispute to which it is a party; or
(b) if the Central Government is of opinion, in any case where the award has been given by a National
Tribunal,
that it will be inexpedient on public grounds affecting national economy or social justice to give effect to the
whole or any part of the award, the appropriate Government, or as the case may be, the Central Government
may, by notification in the Official Gazette, declare that the award shall not become enforceable on the
expiry of the said period of thirty days.
Where any declaration has been made in relation to an award under the proviso to sub-section (1), the
appropriate Government or the Central Government may, within ninety days from the date of publication of
the award under section 17, make an order rejecting or modifying the award, and shall, on the first available
opportunity, lay the award together with a copy of the order before the Legislature of the State, if the order
has been made by a State Government, or before Parliament, if the order has been made by the Central
Government.
Where any award as rejected or modified by an order made under sub-section (2) is laid before the
Legislature of a State or before Parliament, such award shall become enforceable on the expiry of fifteen
days from the date on which it is so laid; and where no order under sub-section (2) is made in pursuance of a
declaration under the proviso to sub-section (1), the award shall become enforceable on the expiry of the
period of ninety days referred to in sub-section (2).
Subject to the provisions of sub-section (1) and sub-section (3) regarding the enforceability of an award, the
award shall come into operation with effect from such date as may be specified therein, but where no date is
so specified, it shall come into operation on the date when the award becomes enforceable under sub-section
(1) or sub- section (3), as the case may be.
In SM Mujeeb vs. Labour Court Anantapur and Another, the dispute was heard by one officer but the
award was signed by the successor presiding officer of the Tribunal. It was held that the award is illegal and
vitiated. This is a material irregularity. An award can be pronounced by the Labour Court on the same day
without waiting till the date of its publication in the Gazette.

Section 17B provides that where in any case, a Labour Court, Tribunal or National Tribunal by its award
directs reinstatement of any workman and the employer prefers any proceedings against such award in a
High Court or the Supreme Court, the employer shall be liable to pay such workman, during the period of
pendency of such proceedings in the High Court or the Supreme Court, full wages last drawn by him,
inclusive of any maintenance allowance admissible to him under any rule if the workman had not been
employed in any establishment during such period and an affidavit by such workman had been filed to that
effect in such Court. Provided that where it is proved to the satisfaction of the High Court or the Supreme
Court that such workman had been employed and had been receiving adequate remuneration during any
such period or part thereof, the Court shall order that no wages shall be payable under this section for such
period or part, as the case may be.

Section 20 states that proceedings before a Labour Court, Tribunal or National Tribunal shall be deemed to
have commenced on the date or the reference of the dispute for adjudication, and such proceedings shall be
deemed to have concluded on the date on which the award becomes enforceable under section 17A.

The provisions of Section 8, 11, 17, 18 and 21 shall apply to the adjudicating authorities as well.

Section 19 is of a common application to all the authorities constituted under the Act. The section states that
a settlement shall come into operation on such date as is agreed upon by the parties to the dispute, and if no
date is agreed upon, on the date on which the memorandum of the settlement is signed by the parties to the
dispute.
Such settlement shall be binding for such period as is agreed upon by the parties, and if no such period is
agreed upon, for a period of six months 9[from the date on which the memorandum of settlement is signed
by the parties to the dispute], and shall continue to be binding on the parties after the expiry of the period
aforesaid, until the expiry of two months from the date on which a notice in writing of an intention to
terminate the settlement is given by one of the parties to the other party or parties to the settlement.
An award shall, subject to the provisions of this section, remain in operation for a period of one year from
the date on which the award becomes enforceable under section 17A. Provided that the appropriate
Government may reduce the said period and fix such period as it thinks fit. Provided further that the
appropriate Government may, before the expiry of the said period, extend the period of operation by any
period not exceeding one year at a time as it thinks fit so, however, that the total period of operation of any
award does not exceed three years from the date on which it came into operation.
Where the appropriate Government, whether of its own motion or on the application of any party bound by
the award, considers that since the award was made, there has been a material change in the circumstances
on which it was based, the appropriate Government may refer the award or a part of it to a Labour Court, if
the award was that of a Labour Court or to a Tribunal, if the award was that of a Tribunal or of a National
Tribunal for decision whether the period of operation should not, by reason of such change, be shortened
and the decision of Labour Court or the Tribunal, as the case may be on such reference shall, be final.
Nothing contained in sub-section (3) shall apply to any award which by its nature, terms or other
circumstances does not impose, after it has been given effect to, any continuing obligation on the parties
bound by the award.
Notwithstanding the expiry of the period of operation under sub-section (3), the award shall continue 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 party or parties intimating its intention to terminate the award.
No notice given under sub-section (2) or sub-section (6) shall have effect, unless it is given by a party
representing the majority of persons bound by the settlement or award, as the case may be.

D) POWERS OF THE APPROPRIATE GOVERNMENT UNDER THE

INDUSTRIAL DISPUTES ACT, 1947
Under Section 10 only the appropriate Government has the power to refer the disputes. The section states
that where the appropriate Government is of opinion that any industrial dispute exists or is apprehended, it
may at any time], by order in writing,—
(a) refer the dispute to a Board for promoting a settlement thereof; or
(b) refer any matter appearing to be connected with or relevant to the dispute to a Court for inquiry; or
(c) refer the dispute or any matter appearing to be connected with, or relevant to, the dispute, if it relates
to any matter specified in the Second Schedule, to a Labour Court for adjudication; or
(d) refer the dispute or any matter appearing to be connected with, or relevant to, the dispute, whether it
relates to any matter specified in the Second Schedule or the Third Schedule, to a Tribunal for
adjudication. Provided that 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 under clause (c). Provided further that where the dispute relates to
a public utility service and a notice under section 22 has been given, the appropriate Government shall,
unless it considers that the notice has been frivolously or vexatiously given or that it would be
inexpedient so to do, make a reference under this sub-section notwithstanding that any other
proceedings under this Act in respect of the dispute may have commenced. Provided also that where the
dispute in relation to which the Central Government is the appropriate Government, it shall be
competent for that Government to refer the dispute to a Labour Court or an Industrial Tribunal, as the
case may be, constituted by the State Government.

Where the Central Government is of opinion that any industrial dispute exists or is apprehended and the
dispute involves any question of national importance or is of such a nature that industrial establishments
situated in more than one State are likely to be interested in, or affected by, such dispute and that the dispute
should be adjudicated by a National Tribunal, then, the Central Government may, whether or not it is the
appropriate Government in relation to that dispute, at any time, by order in writing, refer the dispute or any
matter appearing to be connected with, or relevant to, the dispute, whether it relates to any matter specified
in the Second Schedule or the Third Schedule, to a National Tribunal for adjudication.
Where the parties to an industrial dispute apply in the prescribed manner, whether jointly or separately, for a
reference of the dispute to a Board, Court, Labour Court, Tribunal or National Tribunal, the appropriate
Government, if satisfied that the persons applying represent the majority of each party, shall make the
reference accordingly.

An order referring an industrial dispute to a Labour Court, Tribunal or National Tribunal under this section
shall specify the period within which such Labour Court, Tribunal or National Tribunal shall submit its
award on such dispute to the appropriate Government. Provided that where such industrial dispute is
connected with an individual workman, no such period shall exceed three months. Provided further that
where the parties to an industrial dispute apply in the prescribed manner, whether jointly or separately, to the
Labour Court, Tribunal or National Tribunal for extension of such period or for any other reason, and the
presiding officer of such Labour Court, Tribunal or National Tribunal considers it necessary or expedient to
extend such period, he may for reasons to be recorded in writing, extend such period by such further period
as he may think fit. Provided also that in computing any period specified in this sub-section, the period, if
any, for which the proceedings before the Labour Court, Tribunal or National Tribunal had been stayed by
any injunction or order of a Civil Court shall be excluded. Provided also that no proceedings before a
Labour Court, Tribunal or National Tribunal shall lapse merely on the ground that any period specified
under this sub-section had expired without such proceedings being completed.

Where an industrial dispute has been referred to a Board, Labour Court, Tribunal or National Tribunal under
this section, the appropriate Government may by order prohibit the continuance of any strike or lock-out in
connection with such dispute which may be in existence on the date of the reference.
Where in an order referring an industrial dispute to a Labour Court, Tribunal or National Tribunal under this
section or in a subsequent order, the appropriate Government has specified the points of dispute for
adjudication, the Labour Court or the Tribunal or the National Tribunal, as the case may be, shall confine its
adjudication to those points and matters incidental thereto.
Where a dispute concerning any establishment or establishments has been, or is to be, referred to a Labour
Court, Tribunal or National Tribunal under this section and the appropriate Government is of opinion,
whether on an application made to it in this behalf or otherwise, that the dispute is of such a nature that any
other establishment, group or class of establishments of a similar nature is likely to be interested in, or
affected by, such dispute, the appropriate Government may, at the time of making the reference or at any
time thereafter but before the submission of the award, include in that reference such establishment, group or
class of establishments, whether or not at the time of such inclusion any dispute exists or is apprehended in
that establishment, group or class of establishments.

Where any reference has been made under sub-section (1A) to a National Tribunal, then notwithstanding
anything contained in this Act, no Labour Court or Tribunal shall have jurisdiction to adjudicate upon any
matter which is under adjudication before the National Tribunal, and accordingly,—
(a) if the matter under adjudication before the National Tribunal is pending a proceeding before a
Labour Court or Tribunal, the proceeding before the Labour Court or the Tribunal, as the case may be,
in so far as it relates to such matter, shall be deemed to have been quashed on such reference to the
National Tribunal; and
(b) it shall not be lawful for the appropriate Government to refer the matter under adjudication before
the National Tribunal to any Labour Court or Tribunal for adjudication during the pendency of the
proceeding in relation to such matter before the National Tribunal.

Where any industrial dispute, in relation to which the Central Government is not the appropriate
Government, is referred to a National Tribunal, then notwithstanding anything contained in this Act, any
reference in section 15, section 17, section 19, section 33A, section 33B and section 36A to the appropriate
Government in relation to such dispute shall be construed as a reference to the Central Government but, save
as aforesaid and as otherwise expressly provided in this Act, any reference in any other provision of this Act
to the appropriate Government in relation to that dispute shall mean a reference to the State Government.
No proceedings before a Labour Court, Tribunal or National Tribunal in relation to an industrial dispute
shall lapse merely by reason of the death of any of the parties to the dispute being a workman, and such
Labour Court, Tribunal or National Tribunal shall complete such proceedings and submit its award to the
appropriate Government.

E) UNFAIR LABOUR PRACTICE

Section 25T and 25U are the provisions that relate to the unfair labour practices. The sections state that no
employer or workman or a trade union, whether registered under the Trader Unions Act, 1926, or not, shall
commit any unfair labour practice.
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.

Victimization means one of the two things. One is when the workman concerned is innocent and yet he is
punished because he has in some way displeased the employer. The second instance is where an employee
had committed an offence but is given a punishment quite out of proportion to the gravity of the offence,
simply because he has incurred the displeasure of the employer, or where the punishment is shockingly
disproportion to the misconduct or is such as no reasonable employer would impose under the circumstances.

In Eveready Flash Light Company vs. Labour Court Bareilly, the company appointed a workman on
daily rate basis on 18th January, 1958 after trying him for four days. On April 12, 1958 he was appointed on
probation for 6 months which could be further extended by the company at its discretion. He was elected a
member of the working committee of the union on September 9, 1958. on 10 th September the management
served him with a notice of warning that in spite of repeated warnings he had shown no improvement in his
work. The warning was repeated on 11th October. On November 21, 1958 his service was terminated. It was
held that a condition of employment which is designed to invest the employer with arbitrary power to keep
the workmen at his mercy as regards his chance of being made permanent, and to eventually lead to deprive
him of such chance would amount to unfair labour practice.

In Bengal Bhatdee Coal Co. vs. Singh, thirteen workmen during strike obstructed other workers who were
willing to work from doing their work by sitting down between the tramlines. The Company served charge-
sheets on them. The welfare officer of the company conducted domestic enquiry and recommended their
dismissal. The Supreme Court observed that looking at the nature of the offence committed by these
workmen it cannot be said that the punishment inflicted was grossly out of proportion or was
unconscionable. Therefore, the action taken by the company in dismissing these employees did not amount
to victimization.

UNIT-4

A) CONCEPT OF STRIKE

Strike is collective stoppage of work by workmen undertaken in order to bring pressure upon those who
depend on the sale or use of the products of work. Lock-out is a weapon in the hands of the employer,
similar to that of strike in the armoury of workmen used for compelling persons employed by him to accept
his terms or conditions of or affecting employment.

I) GHERAO

It literally means to “surround”, to “confine” or to “seize”. Gherao means encirclement which is used to
criminally intimidate the employer to accept the demands of the workers. The essential ingredients of this
type of protest are:
(a) Encircling the management either with violence or without violence, and restricting their free movement
which may be called wrongful confinement, and
(b) To put a check, in various ways, on the free access to the outside communications, and
(c) Using coercive means to make the management to agree to the demand or charter of demands put forth
by a group of workers or their leaders or the officials and members of the Trade Union, if such Union exists,
and lastly,
(d) The workers technically commit the wrong of trespass on the property of the employers. Using abusive
language, unbecoming behaviour of workers and their leaders are also the common features of Gherao.

It amounts to criminal conspiracy under section 120-A of the Indian penal code and is not saved by section
17 of the trade unions act.

The meaning of criminal conspiracy as per Section 120A of the Indian Penal Code is an agreement done by
two or more persons for the commission of an illegal act. The act committed will be punishable with death,
imprisonment for life or imprisonment of either description of a term of 2 years or more.

The Trade Union Act, 1926 grants a registered trade union an immunity. Nevertheless, the immunity is only
applicable with regard to the legal agreements made by trade union members for the promotion of legitimate
trade union purposes. The right to call for a strike and persuade members is one of the rights granted to
registered trade unions in the stimulation of their industrial conflicts. Section 17 safeguards a trade union
from a crime if the arrangement they have entered into is not an agreement to conduct an offence.

In the case of West India Steel Company Ltd. vs. Azeez, a trade union representative protested against the
delegation of a worker to another sector by blocking or stopping work inside the factory for five hours. It
was decided that a worker in a factory had to obey the directives issued by his superiors. A trade union
leader is not exempt from following the rules. There is no legal authority for a trade union official or any
other employee to share managerial responsibilities.

The said principle was introduced as a formal means of protest in the labour sector by Subodh Banerjee,
labor minister in 1969 united front governments of west Bengal. Gherao can be punishable under sections
147, 148, 342, 506 of the IPC if it involves threat, violence. Gherao is usually short and also might land for a
few days, a peaceful Gherao consists crimes whereas violent Gherao posses a threat to the well-being and
the prop.

II) BANDH AND LOCK-OUT

Trade Unions resort to bandh when an industrial dispute reaches its extreme edge. When the employers fail
to find any solution to a problem or dispute and strike also fails to serve its purpose, then the weapon or
bandh, an aggressive form of strike, is let loose. Under it, trade unions try to get the work of all industrial
establishments stopped at the district or state level to get their demands fulfilled. In this situation, it is the
serious effort of the trade unions to ensure that different industrial institutions, non-industrial institutions,
schools, colleges, commercial establishment of the town or the state should remain closed, so that employers
could be pressurised.

Bandh is an aggressive form of strike. This extreme measure is used by different trade unions in our country,
in order to make their campaign a success.

Lock-out is the antithesis of strike. According to Section 2(l), “lock-out” means the temporary closing of a
place of employment, or the suspension of work, or the refusal by an employer to continue to employ any
number of persons employed by him.
The following is to be satisfied to constitute a lockout-
1.(i) Temporary closing of place of employment by the employer or,
(ii) Suspension of work by the employer or,
(iii) Refusal by an employer to continue to employ any number of persons employed by him.
2. the above mentioned should be motivated by coercion.
3. an industry as per defined in the act.
4. a dispute in the industry.

In lock-out the relationship of employer-employee remains as before, only some links in that chain of
relationship are broken. Just as strike is a weapon available to the employees for enforcing their industrial
demands, a lock-out is a weapon available to the employer to persuade by a coercive process the employees
to see his point of view and to accept his demands.

III) TYPES OF STRIKE

Section 2(q) defines strike as meaning

 a cessation of work by a body of persons employed in any industry acting in combination or
 a concerned refusal of any number of persons who are or have been so employed to continue to work or
to accept employment, or
 a refusal under a common understanding, of any number of persons who are or have been so employed
to continue to work or to accept employment.

It was held by the Labour Appellate Tribunal in Standard Vacuum Oil Co. vs. Gunaseelam M.G., that
action of the employees applying en bloc for casual leave to celebrate May day was not strike. This decision
is not sound in view of the fact that all the ingredients of a strike are present in the present case, and under
all circumstances, it was a defiance of the authority of the management who refused to declare the day as
closed day as desired by the government.

There are mainly four kinds of strike which can be broadly classified as under:
1. General Strike: A general strike is one, where the workmen join together for a common cause and stay
away from work as a mark of protest thus depriving the employer of their labour to run the industry. In such
form of strike the collective action is taken by the workmen against the management in general with the
ultimate object to force the management to negotiate the settlement of dispute with the striking workmen.
Hartals and Bandhs also fall in this category. In these types, the motives are invariably political and the
public is inconvenienced to put pressure on the government to resolve the tangle. These are, therefore,
considered unjistified.
2. Stay in, sit down, and tool down and pen down strike: These are some of the variants of strike resorted
to by the workmen under different circumstances. Here in such cases the workmen enter the place of work
but do not do any work. They simply occupy their places of work and either stay in or sit down. In these
forms the employer is not allowed to carry on his business. The employer is also prevented to employ other
labourers to carry on his business. Factory workers staying inside the premises and refusing to work is also
known as sit down strike. Likewise, factory workers who refuse to work with their tools is known as Tool
Down Strike.
In the case of Punjab National Bank vs. Their Workmen, the Bank dismissed 150 employees for taking
part in a pen down strike. The Labour Appellate Tribunal reinstated 136 of them. The management
challenged the award for reinstatement before the Supreme Court on the ground of the conduct of the
employees in entering upon a pen down strike and its effect on their claim for reinstatement. The Supreme
Court held that it would be difficult to exclude a strike when workmen enter the premises of their
employment and refuse to take their tools in hand and start their usual work. Thus, pen down strike is a
strike and it cannot be considered illegal provided it is peaceful.
3. Go Slow Strike: In such a strike, the workmen do not stay away from work, they do come to their work
and work also but with a slow speed in order to lower down the production and thereby cause loss to the
employer. It is not a strike but is serious misconduct which is insidious in its nature and cannot be
countenanced.
The Supreme Court in Bharat Sugar Mill Ltd. vs. Jai Singh, held that “go slow” which is a picturesque
description of delaying of production by workmen pretending to be engaged in the factory is one of the most
pernicious practices that discontended or disgruntled workmen sometimes resort. For the delaying
production and thereby reducing the output, the workmen claim to have remained employed and thus to be
entitled to full wages.
4. Sympathetic Strike: A sympathetic strike is one which is called for the purpose of indirectly aiding
others. The striking employees having no demand or grievance of their own and the strike having no direct
relation to the advancement of the interest of the strikers. Such a strike is unjustifiable invasion on the right
of employees and is, therefore, unlawful.
In Kambalingam vs. Indian Metal and Metallurgical Corporation, Madras, it was held that when the
workers in concert absent themselves out of sympathy to some cause wholly unrelated to their employment
or even in regard to condition of employment of other workers in service under other management, such
absence could not be held to be strike, as the essential element of the intention to use it against the
management is absent. The management would be entitled to take disciplinary proceeding against the
workmen for their absence on the ground of breach of condition of service.

Apart from these hunger strike has also been considered as a form of strike by the court in the case of
Pipraich Sugar Mills Ltd. vs. Their Workmen.

IV) RIGHTS TO STRIKE AND LOCK-OUT

A strike is a cessation of work by a body of persons employed in any industry, acting in combination, or a
concerted refusal, or a refusal under a common understanding, of any number of persons who are or have
been so employed to continue to work or to accept employment. Under the Industrial Disputes Act, 1947,
the right to strike is subject to certain conditions:
1. Notice of Strike: Employees must give notice of strike to the employer at least six weeks before going
on strike.
2. Prohibition during Conciliation and Adjudication: Strikes are prohibited during the pendency of
conciliation proceedings before a Board and seven days after the conclusion of such proceedings.
Similarly, strikes are prohibited during the pendency of adjudication proceedings before a Labour Court,
Tribunal, or National Tribunal and two months after the conclusion of such proceedings.
3. Public Utility Services: For industries classified as public utility services, a 14-day notice is required
before commencing a strike, and strikes are prohibited during the pendency of any conciliation
proceedings and seven days after the conclusion of such proceedings.

A lock-out is the temporary closing of a place of employment, the suspension of work, or the refusal by an
employer to continue to employ any number of persons employed by him. The Industrial Disputes Act, 1947,
also regulates the right of employers to declare a lock-out, with specific conditions:
1. Notice of Lock-out: Employers must provide notice of lock-out to the employees at least six weeks
before the lock-out.
2. Prohibition during Conciliation and Adjudication: Lock-outs are prohibited during the pendency of
conciliation proceedings before a Board and seven days after the conclusion of such proceedings.
Similarly, lock-outs are prohibited during the pendency of adjudication proceedings before a Labour
Court, Tribunal, or National Tribunal and two months after the conclusion of such proceedings.
3. Public Utility Services: In public utility services, a 14-day notice is required before declaring a lock-
out, and lock-outs are prohibited during the pendency of any conciliation proceedings and seven days
after the conclusion of such proceedings.

Both rights to strike and lock-out are regulated to ensure industrial peace and prevent abrupt disruptions that
could harm the interests of workers, employers, and the economy. The Act strikes a balance by allowing
these actions under regulated conditions, providing a legal framework to resolve industrial disputes amicably
and efficiently.

V) GENERAL PROHIBITION OF STRIKES AND LOCK-OUTS

The provisions of Section 23 are general in nature. It imposes general restrictions on declaring strikes in
breach of contract and lock-outs in both public utility as well as non-public utility services in the following
circumstances, namely:
(i) During the pendency of conciliation proceedings before a Board and fill the expiry of 7 days after the
conclusion of such proceedings,
(ii) During the pendency and two months after the conclusion of proceedings pending before a Labour Court,
Tribunal or National Tribunal,
(iii) During the pendency and two months after the conclusion of arbitration proceedings before an arbitrator
when a notification has been issued under Section 10A(3A), or
(iv) During any period in which a settlement or award is in operation in respect of any of the matter covered
by the settlement or award.

The words in various clauses of the section are of wide import and cover all strikes and lock-outs
irrespective of the subject-matter of the dispute pending before these authorities.

In the case of Ballarpur Collieries Co. vs. Salim M. Merchant, the Regional Labour Commissioner used his
good offices to arrive at a settlement while dealing with conciliation proceedings, but he did not act
according to the provisions of the Act. The matter in dispute at the time of strike was not covered by
settlement and therefore Section 23(c) was held to have no application in the case.

The settlement referred to in Section 23(c) which prohibits strike must be one which is binding on all
persons, therefore, any settlement arrived at privately which does not bind all the workmen, strike in breach
of such settlement would, therefore, not be illegal.
VI) PROHIBITION OF STRIKES AND LOCK-OUTS IN PUBLIC UTILITY
SERVICES

Section 22 of the Act lays down restrictions on the right to strike and lock-out in the public utility services.
The employer or the workmen is not restrained from declaring lock-out or going on strike but it is required
of them to fulfill certain conditions as enumerated in the section.

With respect to strike the law requires that in a public utility service, no person can go on strike in breach of
contract of service unless:
(a) A notice of strike has been given to the employer. The notice should be given within 6 weeks before
striking. In case workmen choose to go on strike, they can do so within 6 weeks from the date of notice.
After the expiry of 6 weeks, a fresh notice is required,
(b) A minimum of 14 days should have expired between the giving of notice and the date of strike,
(c) The strike shall not be resorted to before the date of strike specified in the notice, and
(d) The strike shall not be resorted to in the period during which any conciliation proceeding s are pending
and even after the conclusion of the proceedings during a further period of 7 days.

Similar conditions as stated above in the case of strike have to be satisfied before the employer can declare
lock-out to be legal under the Act. Any breach or contravention or non-compliance with the above
requirements of law before going on strike or declaring lock-out will make such a strike or lock-out illegal.

If, however, a strike is already in existence and the employer intends to declare lock-out or if lock-out is
already in existence and employees want to resort to strike, it is not necessary to give the notices as is
otherwise required. However, a duty is cast on the employer to send intimation of the lock-out declared by
him or of the strike declared by the workmen to such authority as may be specified by the appropriate
government.

VII) ILLEGAL STRIKES AND LOCK-OUTS

Section 24 of the Act lays down the grounds which make the strike and lock-out illegal which are as under:
(i) A strike or lock-out shall be illegal if it is commenced or declared in contravention of Section 22 in
public utility service.
(ii) A strike or lock-out shall be illegal if it is commenced or declared in contravention of Section 23 in any
industrial establishment.
(iii) A strike or lock-out shall be illegal if it is continued in contravention of an order made by appropriate
government under Section 10(3) or under Section 10A(4A) of the Act.

It is not all strikes and lock-outs which are prohibited under the scheme of the Act. The Act has prohibited
only certain types of strikes and lock-outs, which do no fit into the scheme of the Act. The right to strike and
lock-out, legitimate weapons in the hands of workers and employers respectively in the industrial field, has
been regulated by putting certain checks in order to achieve the object of harmonious relations between the
workers and employers. Therefore, strikes and lock-outs shall not be deemed to be illegal if:
(i) Their commencement is not in contravention of the provisions of the Act, or
(ii) Their continuance was not prohibited by the appropriate government under Section 10(3), or
(iii) A lock-out is declared in consequence of an illegal strike as laid down above or a strike is declared in
consequence of an illegal lock-out.

VIII) JUSTIFICATION OF STRIKES AND LOCK-OUTS

Sections 22, 23 and 24 of the Act are the main provisions which make the strike illegal, if these statutory
provisions of the Act are contravened. The purpose of the strike may make it illegal in other countries but
the same is not true in case of India. Here in India the distinction can be drawn between ‘justified’ and
‘unjustified’ strike. The question of justifiability or otherwise of a strike, therefore, would depend upon
whether the demands are bona fide for the betterment of conditions of service of workmen or whether they
are made frivolous or for any ulterior purpose. Strike resorted to for settlement of economic conditions like
wages, dearness allowance, bonus, provident fund, gratuity, loan and holiday would prima facie make it
justifiable. The question whether the strike in a particular case is justified or not is a mere question of fact?
The answer is that it is a mixed question of fact and law.

If the object of the strike be illegal under the provisions of the Act, the strike under the Indian law may be
unjustified but will not be illegal. Similarly, a strike may be legal if it is commenced without contravening
the statutory provisions and it may be justified if it is bona fide resorted to for the betterment of the
condition of service of workmen. A strike may be both legal and justified at the commencement but as if
progresses the strikers may resort to acts of violence and sabotage. Though such a strike may not become
illegal, it will certainly become unjustified with the resort to such acts on the part of the workmen. Whereas
an illegal strike is prima facie unjustified and therefore the question of justification of illegal strike is
irrelevant. That the two conclusions, that a strike is illegal and at the same time justified cannot in law exist.

The Supreme Court in the case of India General Navigation and Railway Co. Ltd. vs. Their Workmen,
clarifying the above position in law observed that the law has made a distinction between a strike which is
illegal and one which is not, but it has not made any distinction between an illegal strike which may be said
to be justifiable and one which is not justifiable. The distinction is not warranted by the Act, and is wholly
misconceived, specially in the case of employees in a public utility service. In other words, a strike which is
illegal must be unjustified is the natural conclusion from the above holding.

IX) PENALTIES FOR ILLEGAL STRIKES AND LOCK-OUTS

The State or the appropriate government has, therefore, been vested by the Act with powers to punish all
such persons including employers who resort to illegal strikes or lock-outs thereby putting out of gear the
industrial structure upon which the social interest depends to a very great extent. The following are the
provisions of the Act:
 Section 26 imposes on a workman punishment for commencing, continuing or otherwise acting in
furtherance of, a strike which is illegal under this Act. Such a person may be imprisoned for a term
which may extend to one month, or with fine which may extend to fifty rupees, or with both. Any
employer who commences, continues, or otherwise acts in furtherance of a lock-out which is illegal
under this 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 27 of the Act states that 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 this 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.
 The giving of financial aid to illegal strikes and lock-outs has also been made a penal offence under
Section 28 of the Act. The punishment is the same as prescribed under Section 27, namely,
imprisonment for a term which may extend to six months, or with fine which may extend to one
thousand rupees, or with both.
 The settlement arrived at or the award given in the process of industrial adjudication has been given
special sanctity under the scheme of the Act, namely, Section 29. therefore, any person who commits a
breach of any term of any settlement or award, which is binding on him under this Act, shall be
punishable with imprisonment for a term which may extend to six months, or with fine, or with both
2[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] and 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.
 Under the provisions of Section 30, 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.
 Any employer who closes down any undertaking without complying with the provisions of section
25FFA shall be punishable under Section 30A with an imprisonment for a term which may extend to six
months, or with fine which may extend to five thousand rupees, or with both.
 Under Section 31, 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. 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.

X) WAGES FOR STRIKES AND LOCK-OUTS

To entitle the workmen to wages for the period of strike, a strike should not only be legal but it should also
not be unjustified. In order to be entitled to wages, the workmen are required to exhaust the normal avenues
for the settlement of dispute as provided under the scheme of the Act before resorting to strike. As regards
payment of wages during strike which is legal and justified, the matter depends upon the propriety of strike,
the manner of conducting the strike and the conduct of the employer. Therefore, a strike which is not
provoked by the high-handed action of the employer would not be justified strike. If the workers do not elect
to have recourse to conciliation before they resort to it in such cases the employer cannot be blamed for the
loss of wages during strike period.

The Supreme Court in the case of Crompton Greaves Ltd. vs. Its Workmen, held that in order to entitle
the workmen to wages for the period of strike, the strike should be legal as well as justified. A strike is legal
if it does not violate any provision of the statute. It can’t be said to be unjustified unless the reasons for it are
entirely perverse or unreasonable. Whether a particular strike was justified or not is a question of fact which
has to be judged in the light of the facts and circumstances in each case.

The use of force or violence or acts of sabotage resorted to by workmen during strike disentitles them to
wages for strike period.

B) LAY-OFF

The Industrial Disputes Act, 1947 contained no provisions for payment of lay-off and retrenchment
compensation to workmen who were laid off or retrenched, under certain contingencies. It all depended
upon the sweet will of an employer to pay compensation to such workers who were ‘laid off’ or ‘retrenched’
on account of temporary closure of business due to economic reasons or otherwise. In order to ameliorate
the conditions of workers, the Act was amended in 1953 and a new Chapter V-A was added in the original
Act.

Section 2(kkk) defines lay-off as the failure, refusal or inability of an employer on account of shortage of
coal, power or raw materials or the accumulation of stocks or the break-down of machinery or natural
calamity or for any other connected reason to give employment to a workman whose name is borne on the
muster rolls of his industrial establishment and who has not been retrenched.
Every workman whose name is borne on the muster rolls of the industrial establishment and who presents
himself for work at the establishment at the time appointed for the purpose during normal working hours on
any day and is not given employment by the employer within two hours of his so presenting himself shall be
deemed to have been laid-off for that day within the meaning of this clause.
Provided that if the workman, instead of being given employment at the commencement of any shift for any
day is asked to present himself for the purpose during the second half of the shift for the day and is given
employment then, he shall be deemed to have been laid-off only for one-half of that day.
Provided further that if he is not given any such employment even after so presenting himself, he shall not
be deemed to have been laid-off for the second half of the shift for the day and shall be entitled to full basic
wages and dearness allowance for that part of the day.

I) RETRENCHMENT

The definition of the term retrenchment as given in Section 2(oo) is exhaustive and comprehensive.
According to the definition, ‘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,
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.

The Supreme Court in DCM vs. Shambhu Nath, held that the striking off the name of the workman
contrary to the provisions of the Standing Orders amounts to retrenchment as defined in Section 2(oo) and
hence mandatory provisions of Section 25 had to be followed.

In the case of M/s Gammon India Ltd. vs. Sri Niranjan Das, it was held by the Supreme Court that when
services of a senior clerk were terminated due to reduction in the volume of business of the company as a
result of recession in work amounts to ‘retrenchment’ of a worker is invalid, the reinstatement in service is
the proper relief which the court can order.

Retrenchment must be only in a living industry. The other provisions of the Act also such as lock-out, strike,
lay-off, conciliation and adjudication proceedings including retrenchment have meaning only if they refer to
an industry which is running and not to the one which is closed. There can be no retrenchment unless there
is discharge of surplus labour or staff in a continuing or running industry.

II) TRANSFER AND CLOSURE: DEFINITION OF LAY-OFF AND

RETRENCHMENT COMPENSATION

Transfer and closure refer to the process by which an establishment or business entity is moved from one
location to another or closed permanently. The process involves a series of legal and practical considerations
that need to be addressed to ensure that it is executed within the confines of the law.

Lay-off and Retrenchment are terms used to define temporary or permanent termination of the employment
of a worker. The act protects workers against arbitrary termination of employment by their employers.
One such policy is the provision of compensation for layoffs and retrenchments. These are two different
concepts, but they both focus on ensuring that workers are not left without support in case they lose their
jobs.

Section 25C of The Industrial Disputes Act, 1947 deal with the layoff compensation. The IDA provides for
payment of compensation to workers who have been laid off. This compensation is based on the length of
time the employee has been laid off. According to the Act, workers are entitled to receive 50% of their basic
wages and dearness allowance (DA) for the layoff period. It is important to note that the payment of
compensation is only applicable if there is no provision in the employment contract or collective bargaining
agreement that provides for payment of compensation during a layoff. according to Section 25E, A worker is
not eligible to layoff pay if the worker is fired because their actions are causing other employees to work
less efficiently or because of a strike. if the employee misses at least one day each week of the mandatory
working hours at the company. if the employee indicates a desire to decline the alternative employment
offered to him.

In the case of State Bank of India vs. N. Sundaramony and Ors., the Supreme Court in this case held that
employees who have been laid off are entitled to compensation equivalent to 50% of their basic wages and
dearness allowance. However, this compensation is only payable for the first 45 days of layoff. After that,
the employee may be terminated or retrenched.

Under the IDA, if an employer retrenches a worker, they must provide compensation to the worker. The
amount of compensation is based on the length of service of the worker and the basic wage and dearness
allowance received by the worker. If the worker has worked for one year for the employer, they are entitled
to receive 15 days’ wages as compensation.

The landmark decision in Workmen of Hindustan Lever Ltd v. Hindustan Lever Ltd clarified the
principles and guidelines to be followed while providing compensation to the workmen during
Retrenchment. This case dealt with the issue of what constitutes ‘surplus’ employees, and the compensation
that they are entitled to receive. The court held that the employer should consider and apply the ‘last in first
out’ principle while identifying employees for retrenchment. The court further held that the compensation
should be proportionate to the length of service, and the more senior employees should receive better
compensation than the junior employees.

III) COMPENSATION TO WORKMEN IN CASE OF TRANSFER OF

UNDERTAKING CLOSURE

In order to claim lay off compensation, a workman is required to have completed one year continuous
service. Section 25B defines ‘continuous service’ for the purpose of this Chapter of the Act to enable a
workman to claim compensation.

A workman shall be said to be in continuous service for a period if he is, for that period, in uninterrupted
service, including service which may be interrupted on account of sickness or authorised leave or an
accident or a strike which is not illegal, or a lock-out or a cessation of work which is not due to any fault on
the part of the workman;
Where a workman is not in continuous service within the meaning of clause (1) 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 the workman, during a period of twelve calendar months preceding the date
with reference to which calculation is to be made, has actually worked under the employer for not less than:
(i) 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;
(b) for a period of six months, if the workman, during a period of six calendar months preceding the date
with reference to which calculation is to be made, has actually worked under the employer for not less than:
(i) ninety-five days, in the case of a workman employed below ground in a mine; and
(ii) one hundred and twenty days, in any other case.
For the purposes of clause (2), the number of days on which a workman has actually worked under an
employer shall include the days on which:
(i) he has been laid-off under an agreement or as permitted by standing orders made under the Industrial
Employment (Standing Orders) Act, 1946, or under this 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; so, however, that the total period of such
maternity leave does not exceed twelve weeks.
Section 25C of the Act entitles a workman to get compensation from the employer for the period he is laid
off as laying off is an action of the employer and deprives the worker of the opportunity to work and earn
wages. Before a workman becomes entitled to compensation, the following conditions must be satisfied:
(a) His name must be borne on the muster roll and he should not have been retrenched,
(b) He must have completed not less than one year of continuous service, as defined in section 25B, and
(c) The workman must not be a badli or casual workman. An employer is duty bound to maintain muster roll
in such cases under Section 25D of the Act.

Section 25FF provides retrenchment compensation in the case of transfer of undertaking. Before a workman
can claim compensation under Section 25FF, the following conditions must be cumulatively fulfilled:
(a) There should be a transfer of ownership or management of an undertaking from one employer to
another by an agreement or by operation of law.
(b) Such undertaking must be industry within the meaning of Section 2(j) and the workman claiming
compensation must be a workman within the meaning of Section 2(s).
(c) Such workman should have put in minimum one year of continuous service immediately before such
transfer of management or ownership.
(d) The workman is served with a valid notice.
But a workman will not be entitled to the benefits of Section 25FF in case of change of employer if in such a
case:
(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.

In case of Board of Directors of South Arcott Electricity Distribution Government Co. Ltd. vs.
Elumalai, an undertaking was acquired by government and consequently employees were taken over by the
new employer, namely the State Government. The conditions of service were less favourable to workmen
under the State Government as compared to the old employer before transfer of the undertaking. The
workman claimed compensation from the company which was engaged in the electricity distribution
business. The claim was disputed by the company. The Supreme Court held that the proviso to Section 25FF
cannot be invoked by the company to defeat the claim made by the workmen under the principal clause of
that section. The right to retrenchment compensation accruing to the workmen under the principal section
was upheld.

Under the provisions of Section 25FFF though termination of services on closure of business may not be
retrenchment, the workmen concerned are entitled to compensation as if, the said termination was
retrenchment and the compensation payable under Section 25FFF without proviso, is substantially the
compensation that is payable under Section 25F of the Act as and by way of retrenchment compensation.

In order to be entitled to compensation, the following conditions should be fulfilled:

(a) The workman should be in continuous service for not less than one year.
(b) The closure of undertaking should be on account of unavoidable circumstances beyond the control of the
employer. Financial difficulties or accumulation of stock are not such unavoidable difficulties or the expiry
of the period of the lease or the license granted when the period of the lease or license expires on or after
1.4.1967 are not such unavoidable circumstances.

In the case of Avon Services (Production Agencies) vs. Industrial Tribunal, Haryana, the Supreme Court
held that the sabotage of a certain work which was part of an undertaking but which could not be classified
as an independent undertaking would not amount to closure of an undertaking. This amounts to
retrenchment and as conditions precedent were not complied with, the retrenchment was invalid and the
relief of reinstatement with back wages was amply deserved.

IV) CLOSURE: PREVENTION AND REGULATION

Closure is a term used to describe the temporary shutdown of a business or organization. The reasons for
closure can vary, but often include financial difficulties, legal issues, or health and safety concerns.

According to Section 2(c) of the Act, “closure” means the permanent closing down of a place of
employment or part thereof.

Preventing closures requires proactive measures to ensure that businesses and organizations remain
financially stable and are able to weather unexpected challenges. This can include measures such as creating
emergency funds, providing financial assistance and incentives to struggling businesses, and offering
training and support to help businesses adapt to changing market conditions.

Regulation is also an important aspect of preventing closures. Governments and regulatory bodies can
establish policies and guidelines to help ensure that businesses and organizations operate in a safe and
responsible manner. This can include requirements for health and safety standards, financial reporting and
transparency, and compliance with local laws and regulations.

Section 25(O) of the Industrial Disputes Act, 1947 provides for the closure of an undertaking or
establishment, without prior permission from the appropriate government authority, if certain conditions are
met. The following are the provisions of Section 25(O):
1. Conditions for closure: An employer can close down an undertaking or establishment without
seeking prior permission from the appropriate government authority, if it has less than 50 workmen,
and the employer pays compensation to the workmen equivalent to 15 days’ average pay for every
completed year of continuous service.
2. Notice to the appropriate government authority: The employer is required to give notice of the
closure to the appropriate government authority at least 60 days in advance, in the prescribed manner.
3. Notice to workmen: The employer is required to give notice of the closure to the workmen at least 60
days in advance, or pay wages in lieu of such notice.
4. Procedure for payment of compensation: The compensation payable to the workmen must be paid at
the time of closure, or within 15 days from the date of notice of closure, whichever is earlier.
5. Penalty for non-compliance: If the employer fails to comply with the provisions of Section 25(O), it
shall be punishable with imprisonment for a term of up to six months, or with a fine of up to Rs.
5,000, or both.

It is important to note that Section 25(O) is applicable only to establishments with less than 50 workmen.
For establishments with 50 or more workmen, prior permission from the appropriate government authority is
required for closure under Section 25(N) of the Industrial Disputes Act.

The following are the procedures for grant and refusal of permission for closure:
Grant of permission: If the government authority is satisfied with the reasons given by the employer for
closure, and if the employer has complied with all the requirements of the Industrial Disputes Act, the
authority may grant permission for the closure. The employer must give notice of the closure to the
government authority and the workmen at least 60 days in advance.

Refusal of permission: If the government authority is not satisfied with the reasons given by the employer
for closure, or if the employer has not complied with the requirements of the Industrial Disputes Act, the
authority may refuse permission for the closure. In such cases, the employer may approach the Labor Court
or the Industrial Tribunal for adjudication. The Labor Court or the Industrial Tribunal may then examine the
reasons for closure and the interests of the workmen, and may either uphold the decision of the government
authority or order the employer to reinstate the workmen with back wages.

If the government authority does not communicate its decision within the specified time, the permission for
closure is deemed to have been granted. The following are the time limits within which the government
authority must communicate its decision:
 1. Within 60 days of the receipt of the application for permission, if the establishment has less than 100
workmen on its rolls.
2. Within 90 days of the receipt of the application for permission, if the establishment has 100 or more
workmen on its rolls.

If the government authority fails to communicate its decision within the specified time limit, the permission
for closure is deemed to have been granted. However, it is important to note that the employer must still
comply with the notice and compensation requirements as specified in the Industrial Disputes Act, even if
permission is deemed to have been granted.

V) CONDITIONS: PRECEDENT FOR RETRENCHMENT

Under the provisions of Section 25F certain conditions are laid down which are to be complied with by the
employer before he can exercise the right of retrenchment under the present Act. Following conditions are to
be complied with before a workman is to be retrenched by the employer:
(a) Written notice of one month indicating the reasons for retrenchment should be given to the workman,
(b) The retrenchment cannot be effected before the expiry of the period of notice,
(c) In the alternative the workman should be paid wages for the period of notice,
(d) Compensation equivalent to 15 days’ average pay for every completed year of service or any part thereof
in excess of six months, and
(e) Notice in the manner prescribed should be served on the appropriate government or such authority as
may be specified.

The Supreme Court in Bombay Union of Journalists vs. State of Bombay, held that serving of notice is
not a condition precedent to the making of retrenchment. Non-compliance would amount not to illegality but
an irregularity which can be waived.

Under the provisions of the Act, requirement of paying compensation is mandatory pre-condition for
retrenchment of a workman, non-compliance will render the retrenchment invalid and inoperative and would
attract the penalty as prescribed under Section 31(2) of the Act.

VI) SPECIAL PROVISIONS RELATING TO LAY-OFF, RETRENCHMENT AND

CLOSURE IN CERTAIN ESTABLISHMENTS
Section 25K of the Act provides for the applicability of Chapter V-B. Chapter V-B applies to an industrial
establishment in which more than 100 workmen are employed for the preceding 12 months. The industry
should not be seasonal or intermittent in nature. Any disputes related to the nature of the industry the words
of the appropriate government will be final.

Section 25M establishes the procedure of lay-off. The following are such procedures:
1. Unless the appropriate government or the specified authority by the government (hereinafter;
specified authority) grants permission, no workman whose name is on the muster roll may be laid off.
Lay-offs due to shortage of power or natural calamity and in cases of mines fire, explosion, flood, or
increase of inflammable gas are exceptions to make an application.
2. Copy of application made to the authority in a prescribed manner with specified reasons of lay-off
should be served to the workmen as well.
3. When the employer has laid off workmen without making an application (exceptions to mines,
power cuts, and natural calamities) an application has to be made to the appropriate authority within
30 days of such lay-off.
4. When an application is made asking for permission the appropriate authority shall inquire,
investigate and grant or deny the permission considering all the relevant factors. The reasons for the
decision shall be in writing and served to both the employer and workmen.
5. When such an application is made to the appropriate authority and within 60 days no decision is
communicated to the employer it shall be deemed to have granted the permission.
 6. The order passed by the appropriate authority is binding on the employer and the employees and
shall be in force for a year, starting from the day of the order.
7. The order passed by the appropriate authority can review its judgment when an application is made
by the employer or workmen or voluntarily. If the case is referred to a Tribunal. The Tribunal shall
pass the order within 30 days from the day of reference.
8. Lay-offs made without permission or made after denying permission shall be considered illegal and
all the laid-off workmen will be eligible for all benefits as if they were still working.
9. Taking permission from the appropriate authority or applying for such permission can be excepted if
the appropriate Government deems it necessary during the period of accident or death of the owner
or such similar period.
10. The laid-off workmen under this section will also be entitled to compensation of half of the basic
wage and dearness allowance under Section 25 C provided the workman’s name is on the muster roll
and he has worked for a year.
11. The explanation specified for Section 25M states that when the employer provides an alternative job
for the workmen, it is not considered a lay-off. On the condition that the alternative employment
does not require additional skills or prior experience, the location of the new job remains the same as
before or within a reasonable distance, posing no difficulty for the worker to commute, and the
worker is paid their regular wages for this work.

The constitutionality of Section 25M was contested in Papnasam Labour Union v. Madhura Coats Ltd.,
based on the contention that it imposes unreasonable restrictions as the Section prescribes for prior
permission from the authority. The court held that the imposed restrictions are not arbitrary in nature and
certain exceptions have been laid out under the Section for circumstances like power cuts and natural
calamities where taking permission would not be possible.

Section 25N specifies the conditions precedent to the retrenchment of a workman.

1. A workman who has been employed continuously for a year cannot be retrenched unless (a) a three-
month notice is served in writing along with the reasons for retrenchment and such notice period
should be expired and dues payable to the workman should be clear. (b) Permission has been granted
by the appropriate authority.
2. The employer should make an application to the appropriate authority in the prescribed manner along
with the reasons for retrenchment. A copy of the application should be also served to the employees.
3. When an application is made asking for permission the appropriate authority shall inquire,
investigate and grant or deny the permission considering all the relevant factors. The reasons for the
decision shall be in writing and served to both the employer and workmen.
4. When such an application is made to the appropriate authority and within 60 days no decision is
communicated to the employer it shall be deemed to have granted the permission.
5. The order passed by the appropriate authority is binding on the employer and the employees and
shall be in force for a year, starting from the day of the order.
6. The order passed by the appropriate authority can review its judgment when an application is made
by the employer or workmen or voluntarily. If the case is referred to a Tribunal. The Tribunal shall
pass the order within 30 days from the day of reference.
7. Retrenchment made without permission or made after denying permission by the appropriate
authority shall be considered illegal and all the retrenched workmen will be eligible for all benefits as
if they were still working.
8. Taking permission from the appropriate authority or applying for such permission can be excepted if
the appropriate Government deems it necessary during the period of accident or death of the owner
or such similar period.
9. When permission is granted by the specified authority or is deemed to have granted permission every
workman in the establishment will be entitled to compensation just before the date of applying for
permission. The worker who is retrenched will receive compensation that is equivalent to fifteen
days’ average pay for each year of completed continuous service. If the worker has served for less
than a year but more than six months, the compensation will be prorated based on the portion of the
year served.
In the case of KV Rajendram v. Deputy Commissioner, the division bench of the Madras High Court was
asked to rule on the constitutionality of Sections 25N and 25Q of the Industrial Disputes Act, 1947. The
Court determined that Section 25N and Section 25Q as it relates to the imposition of penalties for violating
the clause in Section 25N were unconstitutional. The Supreme Court’s ruling in Excel Wear v. Union of
India, which deemed Sections 25O and 25R of the IDA to violate the Constitution, served as the foundation
for the court’s reasoning supporting this point of view.

Section 25O provides for the procedure for closing down an undertaking. (already discussed above)

The Supreme Court maintained the constitutionality of Section 25-N in Workmen of Meenakshi Mills Ltd.
v. Meenakshi Mills Ltd. As a result, there had been disagreement among the High Courts on the legality of
Section 25-O. The modified Section 25-O was not deemed to be in violation of the Constitution by the
Supreme Court in the current case, and Article 19(6) of the Constitution preserved it.

Section 25P talks about provisions relating to the reopening of an undertaking that was closed before the
commencement of the Act. The appropriate Government may permit restarting of an undertaking falling
within this Chapter by issuing a public order in the Official Gazette if the following conditions are met.
1. The undertaking was closed due to unavoidable circumstances beyond the control of the employer.
2. There should be a potential of resuming back the undertaking.
3. It is necessary for the rehabilitation of the workmen previously employed or necessary to maintain
the demand and supply of essential commodities.
4. The restarting of the undertaking will not cause undue hardship to the employer.

The industrial establishment should be restarted within one month of the Government publishing grant in the
Official Gazette.

Section 25Q specifies the punishment for laying off and retrenching workmen without permission i.e.,
violation of Section 25M and 25N. The offense shall be subject to a potential penalty of imprisonment for a
period of up to one month, or a fine of up to one thousand rupees, or both.

Section 25R provides a penalty for closing down the undertaking by violating Section 25(O) (failure to
make an application to take permission) as imprisonment which may extend for a period of up to 6 months,
or a fine of up to five thousand rupees, or both. If sub-section (2) of Section 25(O) i.e., closing down the
undertaking after denial of permission and violation of guidelines provided under Section 25P amounts to
imprisonment which may extend to one year or a fine of five thousand rupees or both. If the offense
continues then a fine which may extend to two thousand rupees may be levied for each day of such
contravention.

VII) PROCEDURE FOR RETRENCHMENT AND RE-EMPLOYMENT OF

RETRENCHED WORKMEN AND PENALTY

Section 25G gives legislative recognition to the well recognised principle of retrenchment in industrial law,
namely, ‘first come last go’ or ‘last come first go’. This principle is required to be adhered to by every
employer in an industrial undertaking. The section prescribes certain conditions which must be satisfied
before the workman can claim the above protection which are as follows:
(a) The workman must be workman within the meaning of Section 2(s),
(b) Such a workman should be citizen of India,
(c) Industrial establishment employing such workman should be an industry within the meaning of Section
2(j),
(d) The workman should belong to a particular category of workmen in that industrial establishment, and
(e) There should be no agreement between the employer and the workman contrary to the procedure of “last
come and first go”. The Standing Orders will constitute an agreement for the purpose of this section.
The failure to comply with the principle of ‘last come first go’ or in case of departure, the reasons for such
departure not being recorded, would render the retrenchment invalid. A workman who is improperly
retrenched has a right to reinstatement even if someone has been engaged in his place.

Retrenchment of surplus staff causes undue sufferings not only to the retrenched workman but to all his
dependents. Therefore, in order to avoid hardship to the worker and his family, the provisions have been
made in Section 25H that such workman should be given an opportunity to join service whenever an
occasion arises to employ another hand. This section casts an obligation on the employer to give opportunity
to retrenched workman in such a case and prescribes certain conditions which should be fulfilled by him in
order to claim preference in employment over the other workmen seeking employment under the employer.
In order to claim preference the following conditions be fulfilled by the retrenched workman:
(a) The workman should have been retrenched prior to re-employment (thus dismissed, discharged or
superannuated workman cannot claim preference in employment),
(b) He should be a citizen of India,
(c) The workman should offer himself for re-employment in response to the notice by the employer,
(d) The workman should have been retrenched from the same category of service in the industrial
establishment in which the re-employment is proposed.

In Karnataka State Road Transport Corporation, Bangalore vs. Sheikh Abdul Khader, the services of
some of the employees were terminated either during the initial period of probation or during the extended
period of probation on the ground of unsuitability. The termination of service was held to amount to
retrenchment and retrenched employees were held entitled for compensation. Where the very order of
retrenchment itself if held to be invalid, the employee would continue to be in service and would be entitled
to wages.

C) DISCIPLINARY ACTION AND DOMESTIC ENQUIRY

Domestic Enquiry is generally applicable for an enquiry into alleged indiscipline and misconduct. Domestic
Enquiry is a universally accepted concept that extends to all court and enquiry jobs. It is common for
disciplinary authorities in a department or industry to appoint a competent person as an officer or officers to
inquire into the allegations against an employee. They are commonly referred to as “investigations” and are
also known as domestic enquiries.

Dismissing an employee without a fair and just domestic investigation amounts to a violation of the laws of
natural justice and is mortification to the Labour Courts/Industrial Tribunals. As a result, adverse decisions
or actions will be taken against the contractor.

In addition, the investigating officer cannot punish the employee when he verifies the facts, evidence, and
the Guilty Rules. Only the Supervisor or Approving entity, known as the notified regulatory authority, can
impose the penalty and take appropriate action.

Principles Of Natural Justice

 Nemo in propria causa judex, esse debet
“No one should be made a judge in his own case, or the rules against bias”
 Audi alteram partem
“Hear the other party, or the rule of fair hearing, or the rule that no one should be condemned unheard.

Disciplinary Action
In common parlance, where domestic enquiry ends, disciplinary action begins. Disciplinary action refers to
the measures an employer initiates to address and resolve employee misconduct or performance problems.
Steps may be verbal or written warnings, performance improvement plans, holding wages or salary for a
short period, delay in promotions, suspension, demotion, or termination of employment.
Disciplinary action is a tool in the hands of management to ensure compliance with the rules and regulations
of the organization. It is the source of enforcing the guidelines, rules, regulations, and code of conduct of
employees and dealing with the consequences and penal provisions for non-compliance.

While none of the Statues has laid down any precise procedure for holding a domestic enquiry yet several
important stages of the process of domestic enquiry can be enumerated:
1. Preliminary Enquiry: After a report about the misconduct committed by the delinquent\workman is
received by the employer, he is required to decide whether a prima facie case exists for a formal enquiry.
For this purpose, he may hold a preliminary enquiry of an informal nature. Such an enquiry is purely
informal and does not call for the observance of any specific rules of natural justice and can be held ex-parte
i.e. the workman need not be questioned or otherwise asked to take part in it. Statements taken in the
preliminary enquiry cannot be used as evidence in the formal inquiry. In fact the preliminary enquiry is
intended only for the disciplinary authority to satisfy himself whether departmental action is called for or not.
Hence, there may not be any formal report about the preliminary enquiry and no reference is to be made to it
in the subsequent enquiry.
2. Framing of Charges: This is easily the most important and perhaps, the most crucial stage in the entire
proceedings, because the success of any disciplinary case depends primarily on the soundness of the charges.
The charges are, in turn, based on imputations so that if the imputations or allegations are based on solid
evidence, the chances of successful conclusion of the domestic enquiry are gratefully enhanced.
Unfortunately, gathering of fool proof evidence requires extreme care, patient and laborious work needing
lot of time which is very often grudged. There is little realisation that hurriedly drawn up changes based on
insufficiently gathered information enable the worker to wriggle out of the noose and escape punishment. As
such, time spent in the informal enquiry in building up a sound basis for the charges is time well spent.
Charges should be specific and precise based upon the statement of allegations and ought to be related to the
misconducts specified under the service rules or the certified standing orders applicable to the establishment.
3. Service of Charge-sheet: Once chargesheet is prepared, it is required to be served on the workman
concerned and proof of its service obtained. If the workman is present, service may be affected by personal
service, obtaining acknowledgment of its receipt either on a copy of the chargesheet or in a dak book or on a
separate piece of paper. At the time of service of chargesheet it is advisable (necessary) to have at least two
witnesses, so that in case of refusal to accept chargesheet, the fact is recorded by the person serving the
chargesheet and signature of witnesses obtained. In some companies (and under certain Standing Orders)
there is a good system of reading over and explaining the contents of the chargesheets in the language
understood by the workman concerned, in presence of witnesses. In fact these endorsements are printed on
the copies of chargesheet. In case of illiterate or semi-illiterate workman, this practice is warranted and
should be encouraged.
If the workman is absent or if he has refused to accept the chargesheet, the chargesheet (along with an
endorsement to that effect about its earlier refusal and if necessary with a further chargesheet for `refusal. to
accept Company's communication') is required to be sent to the workman's last known address, by
Registered post with A.D. (It is a good idea to send one copy by ordinary post under certificate of posting, as
well).
4. Reply to the Charge-sheet:
After the chargesheet is received by the workman he may:
i) ask for further details or for inspection of documents referred to in chargesheet,
ii) accept the accusations, plead guilty of the -charges and tender apologies,
iii) may ask for time to submit explanation,
iv) may explain away the accusation and deny the charges,
v) may not submit any explanation.
1. It is advisable to give details if any asked for by employee and also allow him to inspect documents if any
relevant to the charge.
2. If he pleads guilty, in writing, confirmation of such pleading should be obtained in writing in presence of
two witnesses lest the charge of coercion/intimidation is brought against the management.
3. Extension of time for explanation, if prayed for, should be given at. least once as a measure of abundant
caution, depending upon the ground on which such prayer is made.
4. The explanation given should be properly considered and if the same is found satisfactory, management
should promptly withdraw the chargesheet in writing.
5. If explanation is not submitted either a further opportunity suo moto, may be given or enquiry notice may
be issued, with advice for submitting explanation if any, before the commencement of the enquiry.

D) MANAGEMENT’S PREROGATIVE DURING THE PENDENCY OF

PROCEEDINGS

The main purpose of industrial adjudication is to establish industrial peace. This purpose would be defeated
unless the conditions of service of the workmen and their right to continue in employment, as far as possible,
remain unchanged during the pendency of proceedings before authorities under the Industrial Disputes Act,
1947. Sections 33 and 33A have been enacted for the purpose of achieving this object. Section 33 which is
incidentally the largest section provides:
During the pendency of any proceeding before the conciliation, adjudication or arbitration authorities the
employer’s right to make alterations in the conditions of service in regard to matters connected with the
dispute are absolutely prohibited. But there is no restriction at all on alterations with regard to matters
unconnected with the pending dispute.
For misconduct which is connected with the dispute, the employer is required to take the express permission
in writing of the authority before which the proceeding in respect of the dispute is pending, before taking
action against the workmen by way of discharge or dismissal or some other punishment for the misconduct.
For misconduct which is unconnected with the pending dispute such permission is not required and the
employer may discharge or dismiss or otherwise punish the workmen for such misconduct provided that the
employer must pay the workmen one month’s wages and apply to the, authority for approval of the action
taken by him. The dispute must be adjudicated upon within three months from the date of receipt of such
application.
In the case of a protected workman, whether the misconduct committed by him, is or is not connected with
the dispute, the employer must in every case obtain, the express permission in writing of the Authority
before which the proceeding is pending before taking any action against him by way of discharge or
dismissal or some other punishment. Section 33(4) provides for the maximum and minimum number of
workmen to be recognised as “protected workmen” in every establishment.

Section 33A provides that when the employer has taken any action in contravention of the provisions of
Section 33 during the pendency of any proceeding before an authority under the Act, the employee
aggrieved by such contravention may make a complaint in writing to the authority concerned, and on receipt
of such a complaint, the authority shall adjudicate upon the complaint as if it were a dispute referred for
adjudication under Section 10(1) and shall make an award thereon. The provisions of the Act as to
submission, publication and operation of awards shall apply to an award made by the authority concerned
under Section 33A, as if it was an award made under a reference for adjudication under Section 10(1) o f the
Act.

E) NOTICE OF CHANGE

Under the Industrial Disputes Act, 1947, Section 9A deals with the procedure for making changes to the
terms of service for workers in any industrial establishment. This section is crucial in maintaining industrial
harmony and ensuring that employees are not subjected to abrupt changes in their employment conditions.

Employers are required to provide a 21-day notice to the employees before implementing any changes in the
conditions of service. This notice must specify the nature of the proposed changes and be displayed
conspicuously in the workplace where it can be easily seen by the employees affected.

The changes requiring notice under this section include alterations in wages, working hours, leave policies,
job roles, and other significant terms of employment. The schedule to the Act (Fourth Schedule) lists the
specific matters that require such notice.
The purpose of Section 9A is to prevent sudden and unilateral changes by the employer that could adversely
affect the workers. It ensures that employees have adequate time to consider the proposed changes and raise
any concerns or objections they may have.

If an employer fails to provide the mandatory notice, any changes made may be deemed invalid, and the
employer could face legal consequences. The employees may also raise an industrial dispute if they are
adversely affected by such changes without proper notice.

The requirement of notice under Section 9A does not apply in cases where the changes are a result of a
settlement or an award, or if the terms of employment explicitly provide for such changes.

Section 9A is significant as it promotes transparency and fairness in the employer-employee relationship. By

mandating prior notice for changes in service conditions, it provides employees with an opportunity to
understand, discuss, and prepare for the changes, thereby fostering a more stable and cooperative work
environment. This provision helps in preventing industrial unrest and ensures that any modifications in
employment terms are carried out with due consideration to the workers' rights and well-being.