Industrial Dispute

Act, 1947
Unit 4
Introduction
This Act furnishes us with specific guidelines and guidelines in regards to the works
committee for both the businesses and all the workmen to advance measures for good
working relations and comprehension among the workmen and the businesses later on,
and to end that, it additionally it resolves any material difference in views of opinion in
regard to such issues.
Industrial Disputes Act, 1947 is the Act that regulates the labour laws as it concerns all the
workmen or all the people employed on the Indian mainland. It came into force on 1 April
1947. The capitalists or the employer and the workers always had a difference of opinion
and thus, it leads to lots of conflicts among and within both of these groups. So, these
issues were brought to the attention of the government and so they decided to pass this
Act. This Act was formed with the main objective of bringing peace and harmony to
industrial disputes between parties and solving their issues in a peaceful manner.
Objective
1. Promote Industrial Peace and Harmony: To prevent and resolve disputes between employers and
workers, thereby ensuring a stable industrial environment.
2. Provide Legal Mechanisms for Dispute Resolution: Establishes processes like conciliation,
arbitration, and adjudication through Labour Courts and Tribunals to address conflicts without
resorting to strikes or lockouts.
3. Protect the Rights of Workers: Safeguards workers from unfair labour practices, such as wrongful
dismissals, and ensures fair wages, working conditions, and compensation during lay-offs and
retrenchment.
4. Regulate Strikes and Lockouts: Imposes restrictions on strikes and lockouts, requiring prior notice in
certain sectors and prohibiting these during conciliation or adjudication proceedings.
5. Maintain a Balance of Interests: Ensures that the needs of both employers and employees are
considered, aiming for equitable and fair treatment in industrial relations.
6. Facilitate Collective Bargaining: Encourages negotiations between employers and trade unions to
amicably resolve disputes.
 Industry 2(j)

• Any business, trade, undertaking, manufacture or

calling of employers and. includes any calling,
service, employment, handicraft, or industrial
occupation or avocation of workmen.
• Bengaluru Water Supply and Sewerage Board v. A
Rajappa AIR 1978, 1978 AIR 548, 1978 SCR (3) 207
• The case is one of the most significant judgments
that dealt with the interpretation of the term
“industry” under the Industrial Disputes Act, 1947.
Bengaluru Water
Supply and Sewerage
Board v. A. Rajappa
• In this case, the dispute was between the appellants Bengaluru
Water Supply and Sewerage Board, its management and the
respondents employees. For some kind of misconduct, the
board had levied a fine over the employees and recovered the
money from them. The respondents approached the labour
court against such a fine under Section 33C(2) of the Industrial
Disputes Act, 1947 alleging that such imposition of a fine was
against the principle of natural justice.
• Key Legal Issue:
• The main issue before the court was whether the activities of
the BWSSB, a statutory body providing essential services like
water and sewerage, fell within the definition of "industry" as
per Section 2(j) of the Industrial Disputes Act, 1947.
• Labour court said: it is an industry
• HC of Karnataka: rejected the objection, and upheld the labour
court’s order.
Cont.
• SC: The board management approached the Supreme Court with the issue of whether it was covered under
the definition of industry or not. The apex court in order to declare the identity of industry, laid down a test
to determine the activities carrying out by the industry This test was called the “Triple Test method”:
• Whether there is a systematic activity carried out on the cooperation between the employer and the
employee for the purpose of production and services all the satisfaction that the human being wants and
wishes;
• It is material to know whether there is an absence of profit gainful objective behind the corporation or
venture;
• The major focus is on the employer-employee relation;
• If the organisation is for trade or business purpose it would not cease to be one based upon its philanthropic
nature.
• Hence, an organization having all the said elements not being a trade or business would be considered as an
industry. The apex court held Bangalore Water Supply and Sewerage Board an industry as per section
provided under the Industrial Disputes Act.
Workman
workman
• 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 (45 of 1950), or the Army Act, 1950 (46 of 1950), or the Navy Act,
1957 (62 of 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 one thousand six hundred 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.
Arkal Govind Rajrao v. Ciba Geigy of India
Ltd, 1985 AIR 985, 1985 SCR Supl. (1) 282
• In this case, the appellant Arkal Govind Rajrao joined the respondent’s company as a stenographer-cum-
accountant on 18 January 1956. After almost 10 years of time, the appellant was promoted to the post of
assistant. However, in 1972 the company terminated him with the contention that he was not a “workman”
defined as under Section 2(s) of the Industrial Disputes Act. The District Commissioner Labour
(Administration), Bombay referred the dispute before the Labour Court.
• The Labour Court dismissed the petition with the view that the claimant was not a workman as he was
carrying out administrative and supervisory work along with clerical work, so he could not be kept under
the definition of workman as provided under Section 2(s) of the Industrial Dispute’s Act.
• The appellant filed an appeal in the Supreme Court against the aggrieved order of the Labour Court. The
apex court was of the view that the appellant was a workman under the definition provided in Section 2(c)
of the Industrial Disputes Act. The court held that the person would not be a workman if he is indulged in
some supervisory activities.
• The apex court further added that while adjudicating such matters one has to put in mind what are primary
and basic duties along with the secondary duties of the person, as the secondary duties do not change the
character and nature of the person. The court said that basic duties have to be considered first and it
doesn’t affect the nature and character of the duties of the person.
National Engineering Industries Ltd.
v. Kishan Bhageria, 1988 AIR 329
• In this case, respondent Kishan Bhageria was working as an internal auditor. He was absent from the office for a period of
time, so the company stopped his salary and sent him on suspension. The respondent filed an application but he was
dismissed from the service.
• The respondent filed an application before the Labour Court against his dismissal. The appellant contended that
respondent’s claim was not maintainable as he was not under the term “workman” provided under the act. The Labour
Court held that the respondent was a workman as under the definition of Section 2(s) of the Industrial Disputes Act.
• The appellant moved the High Court of Rajasthan against the order. The single bench judge of the Rajasthan High Court
held that respondent Kishan Bhageria was not a workman as under the said act. The appeal was again filed before the
Division Bench of High Court where the order of the Ld. single bench judge was reversed.
• The management company moved to the apex court against the order. The Supreme Court stated that the fact in issue was
whether the person was working for the managerial post or supervisory post, and for the purpose of deciding it, one has
to look into the nature of the duties of the claimant.
• The Supreme Court stipulated that a supervisor is a person taking decisions on the behalf of the company. The person
can’t be held as a supervisor if he is merely reporting the affairs of the company and the management.
• In the said matter the apex court held the respondent as “workman” as he was not engaged in managerial work or
administration work. The Court also held that the person if would have been engaged in work of assigning duties among
the other staffs then he shall qualify the criteria of being a “supervisor”.
Retrenchm
ent
 • 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
Retrenchm the employer and the workman concerned contains a
ent stipulation in that behalf; or
• (bb) termination of the service of the workman as a
result of the on-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
Municipal Corporation of Greater Bombay v. Labour
Appellate Tribunal of India, AIR 1957 Bom 188
• This question of retrenchment was discussed in this case. The term “retrenchment” means the
termination of the employee by the employee for reasons other than awarding punishment by way of
disciplinary action, as defined under Section 2 (gg)(oo) of the Industrial Disputes Act, 1947. The section
also states providing compensation to the employee. Retrenchment of employees is generally done so
as to relieve them from a job in good faith.
• In this case, the employee company sent the show-cause notice to the employer with regard to some
misconduct as an inquiry was held. The employee was found guilty and thus unfit for the company. So,
the company terminated him from the service.
• The claimant filed the petition against the company for reinstatement and compensation as he claimed
that the company had illegally terminated him. The Labour Court found merits in the case and allowed
the claim of the claimant.
• Aggrieved from the order of the Labour Court the appellant approached the High Court of Bombay. The
Bombay High Court held that there was no retrenchment in this case as the claimant was removed on
the basis of the disciplinary proceedings initiated against him. The High Court further held that
retrenchment can only take place when the employee is relieved from the services in good faith and not
as a disciplinary action taken as a punishment.
Closure cc
• means the permanent closing down of a place of employment or part
thereof;
Sec 2

• K. “industrial dispute” means

any dispute or difference
between employers and
employers, or between
employers and workmen, or
between workmen and
workmen, which is connected
with the employment or non-
employment or the terms of
employment or with the
conditions of labour, of any
person.
• Kkk. “lay-off” (with its grammatical variations and cognate expressions) means the failure, refusal or inability
of an employer on account of shortage of coal, power or raw materials or the accumulation of stocks or the
breakdown of machinery 6[or natural calamity or for any other connected reason] to give employment to a
workman whose name is borne on the muster rolls of his industrial establishment and who has not been
retrenched.
• Explanation.- Every workman whose name is borne on the muster rolls of the industrial establishment and
who presents himself for work at the establishment at the time appointed for the purpose during normal
working hours on any day and is not given employment by the employer within two hours of his so
presenting himself shall be deemed to have been laid-off 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
Individual
dispute vs.
Industrial
dispute
Central Provinces Transport Limited Nagpur, v.
Raghunath Gopal Patwardhan 1957 AIR 104, 1956
SCR 956
• In this case, respondent Raghunath Gopal Patwardhan was working under the appellant “Central
Provinces Transport Limited Nagpur”. The appellant alleged that the respondent stole some of the goods
from the appellant’s company. A domestic inquiry was conducted by the company where the respondent
was found guilty. He was dismissed on the ground of misconduct and gross negligence.
• The respondent approached the Industrial Court for reinstatement, where the appellant contented the
maintainability of the case as it was an individual dispute, not an industrial dispute.
• The Industrial Court decided in the favour of the respondent claiming the dispute to be an industrial one.
This position was upheld by the Labour Appellate Tribunal while deciding the appeal filed by the
appellant.
• Aggrieved by the order of the Labour Appellate Tribunal, the appellant approached the Supreme Court.
The apex court held that the dispute was an individual one and not an industrial one. The court further
added that the dispute would have been industrial if the cause had been taken by the union or a mass of
workmen.
• The court was of the opinion that the definition of Section 2(k) of the Industrial Dispute’s Act was wide
enough to include a dispute between an employer and an employee. Further, the dispute must attract the
workmen’s support from the industry to become an industrial one otherwise it will be an individual one.
Strike and lock-out
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• 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;
• Q. “strike” means 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;
• https://blog.ipleaders.in/right-to-strike-under-industrial-dispute-act-1
947/
CP- Questions
1. What is the legal definition of a "strike" under the Industrial Disputes Act, 1947?
2. How does the Act differentiate between legal and illegal strikes?
3. What are the procedural requirements that must be fulfilled by workmen before going on a
legal strike?
4. What are the consequences or penalties for participating in an illegal strike under the Act?
5. How has the judiciary in India interpreted the right to strike in the context of fundamental
rights and public interest?
6. What are the different types of strikes recognized under the Industrial Disputes Act, 1947 and
by Indian courts?
7. What are the legal consequences for employers and employees during a lawful strike?
8. How does a strike affect the employer-employee relationship under the Industrial Disputes
Act?
9. What is the role of the government and labour authorities during the course of a strike?
Syndicate Bank and Ors v. K. Umesh
Nayak, 1995 AIR 319, 1994 SCC (5) 572
• In this case, the major issue before the Supreme Court was whether the workmen were to get
paid during the period of strike despite the fact that the strike was legal or illegal. The apex
court decided the matter in the light of conflicting opinions rendered by itself in other decisions
of the smaller bench.
• The apex court held that the strike can be held illegal if it contravenes the provisions of the
Industrial Disputes Act, 1947. For the purpose of deciding the legality of the strike the Court
had to take certain things into consideration such as; whether the demands of the workmen
like pay scale, service issues were justified or not. The Court stated that in every case the
detailed inquiry on facts and circumstances of the strike shall be taken into consideration.
• The SC held that the strike is a result of a long struggle between the employer and the
employee. It is the last weapon available to the employees in order to allow their demands to
be fulfilled by the industry. The court stated it as a normal act and it seeks the concept of the
strike to be regulated with the right of the employer to lockout and provide machinery for
peaceful inquiry and settlement of disputes between them. The court ordered the employer to
pay the workers for the “strike period”.
Management of Kairbetta Estate, Kotagiri Po v.
Rajamanickam, 1960 AIR 893, 1960 SCR (3) 371
• In this case, Ramkrishna Iyer the manager of the appellant was violently assaulted by the workers which resulted in
serious injury along with multiple fractures. The staff of the company was also threatened by the workers. The staff
of the lower division denied going on work in the lower division as a threat to their lives. The management closed
the company’s lower division for a period of time.
• The respondents filed a complaint in the Labour Court under Section 33A of the Industrial Disputes Act, 1947 as they
contended that the work in the division was stopped without any prior notice. The said section deals with the
adjudication of the disputes whether the conditions of the service changed during the pendency of the proceedings.
The respondents also claimed compensation for the layoff as under Section 25 of the Industrial Disputes Act, 1947.
The Labour Court allowed the claim of the respondents.
• Aggrieved from the order of the Labour Court the appellant approached the apex court. The apex court while
deciding the issue made the distinction between the layoff and the lockout and held that the present case was
“lockout” not “lay-off” as there was a work stoppage initiated by the management of the company due to the labour
dispute. In the layoff, the management has to provide compensation if the work is stopped due to different reasons
such as shortage of coal or anything similar.
• The lockout was a tool available to the employer to force his demands against the employee. The Supreme Court
held that in this case, the workmen had become aggressive and went out of control of the employer and not
adhering to his request, so the employer can make a closure and such closure shall be considered as a lockout not
layoff, hence no compensation shall be provided to the workman.
Settlement
p. “settlement” means a settlement arrived at in the
course of conciliation proceeding and includes a written
agreement between the employer and workmen arrived
at otherwise than in the course of conciliation proceeding
where such agreement has been signed by the parties
thereto in such manner as may be prescribed and a copy
thereof has been sent to [an officer authorised in this
behalf by] the appropriate Government and the
conciliation officer;

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Bata Shoe Co. Ltd. v. D.N Ganguly,
1961 AIR 1158, 1961 SCR (3) 308
• A dispute arose between the Bata Company/appellant and the workers/respondent. The dispute
went in course of the conciliation where the parties in disputes amicably reached a settlement.
However, after the settlement, the workers went on strike. The company claimed the strike as
illegal and irrelevant in light of the settlement done by the respondent. The company held the
inquiry and dismissed the workers who had gone on strike.
• With regard to the dispute of termination of workers, the conciliation proceeding was again
preferred reaching an agreement signed by both parties of the dispute. However, in the whole
process of conciliation, no conciliation officer was present.
• The question in issue before the apex court was whether the settlement was done by the
company and the workers were as per as provided under Section 12 and Section 18 of the
Industrial Dispute Act, 1947. The apex court held the settlement at which the parties had arrived
was according to the provisions of the sections provided under the Industrial Dispute Act and the
settlement was binding over the parties as they can’t deny the terms at which they had arrived
upon at the time of settlement.
Wages
Wages
rr. “wages” means all remuneration capable of being expressed in terms of money, which
would, if the terms of employment, expressed or implied, were fulfilled, be payable to a
workman in respect of his employment, or of work done in such employment, and includes-
(i) such allowances (including dearness allowance) as the workman is for the time being
entitled to;
(ii) the value of any house accommodation, or of supply of light, water, medical attendance
or other amenity or of any service or of any concessional supply of foodgrains or other
articles;
(iii) any travelling concession;
(iv) any commission payable on the promotion of sales or business or both
but does not include- (a) any bonus; (b) any contribution paid or payable by the employer to
any pension fund or provident fund or for the benefit of the workman under any law for the
time being in force; (c) any gratuity payable on the termination of his service
Works Committee
• 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 (16 of 1926).
• (2) 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.

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Conciliation
Officers
• (1) 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.
• (2) 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.
Unfair Labour Practices
Sec 2 ra
• “unfair labour practice” means any of the practices specified in the
Fifth Schedule.
• Sec: 25T. Prohibition of Unfair Labour Practice.- No employer or
workman or a trade union, whether registered under the Trade
Unions Act, 1926 (16 of 1926) or not shall commit any unfair labour
practice.
• Sec: 25U. Penalty for committing unfair labour practices.- 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.]
Penalties
• 26. Penalty for illegal strikes and lock-outs
• 27. Penalty for instigation etc
• 28. Penalty for giving financial aid to illegal strikes and lock-outs
• 29. Penalty for breach of settlement or award.
• 30. Penalty for disclosing confidential information.-
• 30A. Penalty for closure without notice
• 31. Penalty for other offences.