LABOUR LAWS
THE INDUSTRIAL DISPUTES ACT, 1947
Q. 1 (a). Trace the history of the Industrial Disputes Legislation in India?
Ans. There can be no growth of Industrial structure unless the employers and the workers realize the special significance of their relations and responsibilities laid upon each other. The Constitution of India enjoins the promotion of human conditions of works and secures to all workers full enjoyment of leisure and social and cultural measures for worker’s welfare and five years plans also places particular emphasis on this object.
Before the first world war mainly before the year of 1914 to 1918 we did not have adequate legislation for the purpose of demarcating proper lines between the employer and the employee for regulating the relations between them, and also for the disputes regarding industries, for the simple reason that there were no properly organised industries and no labour awakening. There was one, Employers and Workmen’s Act, 1860 which aimed at the settlement of disputes between the employers and workmen. In the year 1924 a Bill was drafted and circulated which culminated into the Trade Disputes Act, 1929. It was a temporary enactment for five years. Consequently in 1934 by another amending Act the aforesaid Act made permanent and also amended it by the Royal Commission on Labour.
As recommended by the Royal Commission in the year of 1938 an another Trade Disputes (Amendment) Act, 1938 was passed which provided for the appointment of Conciliation Officers. It also extended the scope of the Act so as to cover certain other disputes and some other public utility services. The right to strike and lock-out were not recognised in India before 1929. For the first time it was conceded in the “Trade Disputes Act, 1929.” The Trade Dispute Act, 1929 did not provide for the amicable settlement of disputes on the faiture of the conciliation with a major dispute, particularly of an all India, character could be declared illegal on the ground of causing hardship to the community. The Bombay Trade Disputes Conciliation Act, 1934 made the Commissioner of Labour ex-officio Chief Conciliator of the Province, and provided for the appointment of Conciliation Officers to look after the interests of labour, to promote closer contacts between employers and workers.
The main defect of the Trade Disputes Act was that the proceeding instituted thereunder where not made conclusive and binding on the parties. Rule 81-A of Defence of India Rules, enacted during the war, sought to remove this defect. This Rule empowered the Central Government to refer industrial disputes to adjudicators and to enforce their award. The Rule however, ceased to be operative from October, 1946. But the need of permanent legislation on the lines of the said Rules was left under the stress of post-war industrial readjustment with the result that the Industrial Disputes Act, 1947 was passed to replace the Trade Disputes Act, 1929. This Act came into force from Ist April, 1947.
The Industrial Disputes Act, 1947 embodies the essential features of Rule 81-A of the Defence of India Rules, retaining for the most part of provisions of the Trade Disputes, Act, 1929. It introduced two new institutions namely (i) the Works Committee composed of the representatives of employers and workmen, and (ii) The Industrial Tribunals consisting of one or more members possessing qualifications ordinarily required for appointment as Judge of a High Court. The Act gives encouragement to the voluntary settlement of disputes through the Works Committee and provides for reference of a dispute to the Industrial Tribunal where the parties apply to the dispute for such reference, or where the parties deem necessary the appropriate Government may institute proceedings.
Since the Indian Independence (Adaptation of Control Acts and Ordinances) Order, 1948 several Amending Acts or Orders have been passed including the aforesaid Indian Independence Order. These Amending Acts have brought considerable changes in the main Act.
Q. 1 (b). What do you mean by “Industry” under the Industrial Disputes Act, 1947. Discuss this term in the light of latest decision of the Supreme Court of India.
OR
Analyse the ‘triple test’ laid down by Justice Krishna Iyer in the Bangalore Water Supply v. A. Rajappa, AIR 1978 S.C. 548, case while interpreting the term “industry”.
OR
In the light of the important judicial decision examine the scope of industry under the Industrial Disputes Act, 1947.
Ans. Definition of Industry. The original definition of the term ‘Industry’ was given under Section 2A of the Act. It runs as follows: “Industry” means any business, trade, commerce, business undertaking manufacturing or calling of the employer and it includes any calling. service, employment, handicraft or industry.”
This definition may be divided into two parts, one from point of view of employer, and the other from the point of view of workmen. The terms used in the definition are not defined in the Act, due to this, it is difficult to understand their meaning. It was held in State of Bombay v. Hospital Mazdoor Sabha, AIR 1960 SC 610, by the Supreme Court that if any activity provides the substantial services in a systematic way by production and distribution of goods, commodities, then such activity will come under the ambit of definition of “Industry.” Likewise in Madras Gymkhana Club Employees Union v. Gymkhana Management, AIR 1968 SC 554, it was held that the “industry” must be related with economic activity. There must be equal arrangement of employer’s capital and workman’s labour as these factors are essential for running an industry.
Bangalore Water Supply Case.- There were many uncertainties regarding the definition of ‘industry’. The Supreme Court gave a landmark decision in Bangalore Water Supply v. A. Rajappa, AIR 1978 SC 548 and done away with the uncertainties and Justice Krishna lyer propounded “triple test”:
(i) There is organized activity.
(ii) The activity is organized by co-operation between employer and employees.
(iii) It is for the production and distribution of goods to satisfy human needs (wants) and wishes (but not merely spiritual or religious).
It was propounded in this case/decision:-
(a) Profit motive or gainful objective is irrelevant, not important.
(b) Religious or spiritual services fall out of the definition.
(c) Sovereign acts/activities are not industry. Small labs are not included in the definition.
Amended definition of Industry.- The aforesaid decision made inoperative the impact of original definition, so new definition was inserted by the Amending Act of 1982, which runs as follows:
‘Industry’ means any systematic activity carried on by co-operation between an employer and his workmen (whether such workinen are employed by such employer directly or by or through any agency, including a contractor), for the production, supply or distribution of goods or services, with a view to satisfy human wants or wishes (not being wants or wishes which are merely spiritual or religious in nature, whether or not,-
(i) any capital has been invested for the purpose of carrying on such activity, or
(ii) such activity is carried on with the motive to make any gain or profit.
and includes-
(i) Any activity of the Dock Labour Board established under Section 5A of the Dock Workers Regulation of Employment Act, 1948; and
(ii) Any activity relating to the promotion of sales or business or both carried on by an establishment.
but does not include-
(1) any “agriculture operation”, except where such agriculture operation is carried on in an integrated manner with any other activity and such activity is predominant one,
(2) hospitals or dispensaries, or
(3) educational, scientific, research training institutions, or
(4) institutions owned or managed by organizations wholly or substantially engaged in any charitable, social or philanthropic service, or
(5) Khadi or village industries,
(6) any activity of the Government related to the Sovereign function of the Government, including all the activities carried on by the departments of the Central Government dealing with defence, research, atomic energy and space, or
(7) any domestic service, or
(8) any activity being a profession practised by an individual or body of individuals and number of employed persons less than ten,
(9) any activity carried on by Co-operative Society or a club or any other like body of individuals, if the number of persons employed by them in relation to such activity is less than ten.
Q. 2 (a). Define ‘industrial dispute’. When does an individual dispute become an industrial dispute?
OR
What do you mean by industrial dispute? Explain with the help of definition given in the Industrial Disputes Act, 1947 and Judicial decisions.
Ans. According to Section 2 (k) of the Industrial Disputes Act, 1947, “industrial disputes” means any dispute or differer.ce between employers and employers, or employers and workmen, or workmen and workmen which is connected with the employment or non-employment, or the terms of employment or the conditions of service of labour.”
As per definition, an industrial dispute pre-supposes the existence of an industry. For such a dispute-
(i) Dispute or difference must exist between the employer and workmen or workmen and workmen.
(ii) It must relate to the employment or non-employment or conditions of service.
The ambit of the industrial dispute is very comprehensive. A system or mode of appointment, poor or deplorable conditions of working wages, bonus, dearness allowance, overtime wages, ill-treatment of employer, unskilled management and leadership, provocation of employers and workmen by the politicians, retrenchment, discharge, dismissal of workmen, layoff, lockout by the employer, and strike by the employees, and other matters come under this head of industrial dispute. The Supreme Court, while deciding the case Workmen of Dima Kuchi Tea Estate v. The Management of Dimakuchi Tea Estate, AIR 1958 SC 353 interpreted the term ‘industrial dispute’ in three heads:
(1) There must be a real dispute or difference in existence but that must be substantive.
(2) The dispute must have arisen between-
(a) Workmen and workmen.
(b) Employer and workmen.
(c) Employer and employer.
The dispute should be connected with-
(i) Employment or non-employment of any person.
(ii) Terms or conditions of service of any person.
It was held that any person means a person, in whose dispute the workmen, as a class have a direct and substantial interest and in whose work they have community of interest. The dispute, is of such nature which can be settled through adjudication.
Non-employment includes suspension, layoff retrenchment and dismissal of workmen and also the non-payment of money due to the employees.
When an individual workman can raise individual dispute.- According to strict theory, an individual dispute is not per se, an industrial dispute. In the beginning, such dispute must have been supported by the Union of the workmen or by an appreciable number of workmen. Subsequent support of the Union cannot convert an individual dispute into an industrial one, continuous support from the Unions also not essential. It may be noted that by the amendment made in 1965, a new Section 2 (A) was added and inserted into the Act, making it clear that an individual workman can raise industrial dispute even without support of the Union of majority of the workmen. It was held in Workmen v. Indian Express, AIR 1970 SC 737 that the dispute can be raised even by the outside union also. Even the general (outside) union can raise the individual dispute. In this case action was taken against two news paper employees. The dispute raised by 25% members of the general Union was held valid and legal.
It was held in General Secretary Hindustan Teleprinter General Employees Union v. State of Tamil Nadu, 1988 (1) LLJ 159 Mad., the refusal to pay 20% bonus on demand, converts it into industrial dispute.
Q. 2 (b). Explain the following terms under the Industrial Disputes Act, 1947.
(i) Average pay.
(ii) Conciliation proceeding.
(iii) Employer.
(iv) Independent person.
(v) Public utility service.
(vi) Industrial Establishment or undertaking.
(vii) Working committee.
(viii) Conciliation officer.
(ix) Court of inquiry.
(x) Collective bargaining.
(xi) “Workman,” is police constable also a workman.
Ans.(i) Average pay. According to Section 2 (aaa) ‘average pay’ means the average of the wages payable to workman,-
(i) in the case of a monthly paid workman, in the three complete calendar months.
(ii) in the case of a weekly paid workman, in the four complete weeks, and
(iii) in the case of daily paid workman, in the twelve full working days.
This definition classifies workmen in three categories for the purpose of reference to the ‘average pay.
(ii) Conciliation Proceeding- According to Section 2 (e) ‘conciliation proceeding’ means any proceeding held by a conciliation officer or Board under this Act.
(iii) Employer- Under Section 2 (g) an employer ‘means-
(i) in relation to an industry carried on by or under the authority of any department of the Central or State Government, the authority prescribed in this behalf or where no authority is prescribed, the head of the department,
(ii) in relation to an industry carried on by or on behalf of a local sitthority, the chief executive officer of that authority.
(iv) Independent Person.- A person is deemed to be independent with reference to his appointment, when he is appointed the presiding officer, of a Board, Court or tribunal or as a member. He should in no way be related to any party of the industrial dispute and should have no interest in any of the parties who is to be affected by the dispute. But he will not be barred from being independent merely because he happens to be the share- holder of any incorporated Company which is a party to such a dispute, but he is bound to reveal this fact to the appropriate government as to what kind of and upto what extent, he holds the share therein. On receiving the letter of appointment if the duty of the share holder to reveal this fact. Having come to know the reality the appropriate government may change its mind, and appoint any other person by cancelling the previous appointment.
(v) Public Utility Service.- According to Section 2 (n), ‘Public Utility Service’ means-
(a) any railway service, or any transport service, for the carriage of passengers or goods by air,
(b) any service in or in connection with the working of any major port or dock,
(c) any section of industrial establishment on working of which the safety of the establishment or the workmen employed therein depends,
(d) any postal, telegraph or telephone service,
(e) an industry which supplies power, light or water to the public,
(f) any system of public conservancy or sanitation.
(g) any industry specified in the first schedule which the appropriate Government may, if satisfied, that public emergency or public interest so requires by notification in official gazette declare to be a public utility service for the purposes of this Act, for such period as may be specified in the notification.
However, the period so specified cannot, in the first instance exceed six months.
(vi) Industrial establishment or undertaking. This term means an establishment or undertaking in which any industry is carried on.
But if several activities are on union establishment, any one or some of such activities is, or are, an industry or industries, then-
(a) if any unit of such establishment or undertaking carrying on any activity, being an industry is severable from the other unit or units, such unit shall be deemed to be separate establishment, or undertaking,
(b) if the predominant activity or each of the predominant activities carried on in such establishment or any unit thereof is an industry and other activity is not severable from and is, for the purpose of carrying on or aiding the carrying on of such predominant activity or activities, the entire establishment or undertaking, as the case may be unit thereof, shall be deemed to be an industrial establishment or undertaking.
(vii) Working Committee.- Section 3 provides that in industrial establishment in which 100 or more workmen are employed (or have been employed on any day in the last 12 months) the appropriate government may by general or special order, require the employer to constitute a works committee in the prescribed manner. Consisting of representatives of employers and workmen in equal number. There cannot be more than 20 members in all. The members from amongst the workmen shall be elected by the prescribed mode of election in consultation with Trade Union if any registered under the Trade Unions Act, 1926. After the election constitution of the works committee, the members will select one president, two vice presidents, one secretary and two joint secretaries. Their election shall be held every year. The term of office of this Committee is three years. There must be atleast one meeting within the interval of three months.
Duties of Works Committee.- Sub-section (2) enumerates the duties of the committee. According to this sub-section following shall be its duties,-
(a) to promote measures to preserve amity and cordial relations between the employer and the workmen,
(b) to comment upon issues of common interest or concern and to attempt to settle any material difference of opinion in such matters. The recommendary or advisory finding is not binding on the employer-M/s. North Brook Jute Co. v. Their Workmen, AIR 1960 SC 879.
(viii) Conciliation Officer.- Section 4 of the Act provides the mode of appointmeat of the conciliation officers. The appropriate Government may by Gazetted notification, appoint conciliation officers in such number and for such area, as it thinks fit either permanently or temporarily. Their main aim is to mediate in the settlement of industrial disputes and to promote their settlement. Conciliation officer may be appointed for a specified area or for any specified industries in a specified area or for specified industries. The jurisdiction, powers and functions of the conciliation officer shall be notified in the official gazette. There must be an industrial dispute in existence to interfere in-Management of Needle Industry v. The Labour Court, 1986 I LLJ 405.
(ix) Court of Inquiry.- Section 6 contains the provision for Court of inquiry. The appropriate Government may, as occasion arises by notification in official gazette, constitute a Court of inquiry for inquiring into any matter appearing to be connected with or relevant to any industrial dispute. This Court shall consist of one or more independent persons as the appropriate Government thinks fit, and if there are more than two members in the Court one of them shall be appointed as its chairman. If it has the prescribed quorum, it can act despite the absence of the chairman or any of its members or any vacancy in its numbers. However, if the appropriate Government notifies the Court that the services of the chairman are no longer available, the Court cannot act until a new chairman has been appointed.
(x) Collective Bargaining.- Collective bargaining is a process, wherein the Trade Unions and the employers negotiate, put forward their reasons, and come to some certain settlement on the points of issues of disputes or differences. The main or the substantial condition of such bargaining is that both the parties must be of sound nature and able to settle their problems on the strength of their own. In this respect the weapon in the hands of the workmen is strike and lock-out in the hands of employers.
There is full trial of strength in the process of the collective bargaining. This process has been in vogue for a long time. The Government treats it as costlier, because strikes and lock-outs are taken recourse too. For the better progress of the industries, the disputes of Collective bargaining need settlement at the top priority and amity and good understanding must be promoted and established between the two disputing parties, the employers and the workmen. That will ensure the industrial progress of the country.
(xi) “Workman,” is police constable also a workman.- The term “Workman” has been defined in Section 2(s) of the Industrial Disputes Act, 1947. In means 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 the dispute, are whose dismissal, discharge or retrenchment has led to that dispute, but does not include any person:
(i) who is subject to Army Act, 1950 on the Air Force Act, 1950, Navy Act 1957, or
(ii) who is employed in the police service or as an officer or others employee of 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 power vested in him, functions mainly of a managerial nature.
The above definition of “workmen” which has been substituted by the Act 6 of 1956 clearly indicates that all persons employed in any industry to do any skilled or unskilled, manual technical operational, clerical or supervisory work are workman within the meaning of this Act. It includes any apprentice also. However, there are certain exceptions to this general rule which are mentioned above.
Tungbhadra Sugar Works v. Labour Court (1985) I LLJ 465 (Kam) is an important case on medical representative whether they are workman under the definition of “workman” of the Act.
What is the condition of a police service man as an workman?- Under the definition of the Act, it is clear from the exceptional clause (ii) that who is employed in the police service or as an officer or other employee of prison does not fall within the definition of the term “workman”.
In the case of Devinder Singh v. Municipal Council. Sonaur (2011) 6 SCC 584 the Apex Court has considered the question whether a police service man is a workman under the definition of Section 2 (s) of the Act or not and held that the Section 2 (s) contains an exhaustive definition of term “workman”. Who is employed in police service as an officer or other employee of a prison does not fall within the definition of the term “workman”.
Q.3 (a). What are the various Authorities under the Industrial Disputes Act, 1947? Discuss the constitution and functions of the Authorities.
Or
What machineries does the Industrial Disputes Act, 1947 provide for the settlement of the Industrial Disputes? Are these measures sufficient in your opinion in the direction of achieving the aim?
Ans. The following machineries or Authorities are provided under the Act for the settlement and adjuration of the Industrial Disputes.
(1) Conciliation machinery. This machinery consists of the following machinery-
(a) Working Committee. In this committee the equal number of representatives are elected/selected from the side of employers and workmen, but in case the number should exceed twenty. The duty of this committee is to promote measures for the amity and good relations between the parties and comment on the points of their common interests and make sincere efforts for settlement of their substantial differences.
(b) Conciliation Officer. Conciliation Officers are appointed by the appropriate Governments (by the State or the Central Government, as the case may be) for mediating and promoting the settlement of the disputes between the employers and the workmen. The appropriate Government, can appoint as many as conciliation officers as it may think fit. They may be appointed for a specified area or industry or industries in the specified area.
It is necessary that the parties related to the dispute must sit together and discuss the matter in an amicable atmosphere.
(c) Conciliation Board. This is also constituted by the appropriate Government for the settlement of industrial disputes through mutual agreement. The parties to the dispute sit together and try to reach at a meeting point acceptable to them. The chairman of the Board is an independent person, not being interested in any of the parties or having no concern with dispute in question. In addition to the chairman, there are equal number of representatives of the employers and the workmen as members as the appropriate Government thinks fit. The representatives are appointed with the consent of the parties.
(2) Adjudication Machinery. It consists of the following three authorities-
(i) Labour Court. Such Court is constituted by the appropriate Government under Section 7 of the Act. Labour Courts adjudicate such industrial disputes which are referred to them by the appropriate Government under Section 10 (1). Such disputes may be related to the matters of the second schedule. The Court is presided over by a single judge.
(ii) Industrial Tribunal. Such tribunal is constituted by the appropriate Government under Section 7 (a) of the Act. Tribunals adjudicate the industrial dispute which are referred to them by the appropriate Government for that purpose under Section 10 (1). Such disputes may be related to any items of second or third schedule of the Act.
(iii) National Industrial Tribunal. Such tribunal is constituted by the appropriate Government under Section 7 (b) of the Act. This tribunal adjudicates only such industrial disputes which are connected with any matter of public utility service or are of national importance, or any dispute in which State and the Central Government has interest or such industries which are spread in more than one State.
(iv) Court of Inquiry. Court of Inquiry is constituted by the appropriate Government under Section 6 of the Act for inquiring into any matter related to any industrial dispute. There is one independent person as a chairman of the Court appointed by the appropriate Government and two or more members duly appointed by the Government.
(v) Arbitration Machinery. Section 10 (a) contains the provision for referring the industrial disputes for arbitration voluntarily by the employers and the workmen with free consent. The number of arbitrators shall be equal from both the parties. The parties can refer the disputes by their mutual agreement reduced in writing provided they are not already referred to Labour Court or tribunal for adjudication under Section 10 of the Act. Disputes cannot be referred for adjudication and arbitration at one and the same time. That will be illegal procedure.
(vi) Grievance Settlement Authority. The provision for such authority was made by adding/inserting a new Section 9 (c) through an amendment made in 1982. The employer of such establishment, where the number of the workmen is 100 or more, is bound to appoint such authority for the purpose of settlement of individual dispute. Now, first of all, the individual industrial dispute should be referred to the Grievance Settlement Authority. This is mandatory provision. It is only on the non-acceptance of the decision of the authority, that the dispute may be referred for adjudication under Section 10 (1).
Are these measures sufficient. In spite of the fact of the said provision of the constitution of five machineries, there is no decreasing trend in the industrial disputes, and at the same time it has not been possible to wipeout the differences between the employers and the workmen. The increasing dissatisfaction and inimical attitude is not satisfactorily removed or lessened. The Central Government is well acquainted with such a situation. This is why the Standing Committee of the Central Labour Ministry is very seriously thinking of introducing a new system for the settlement of the industrial disputes.
Limitation.- No period of limitation is prescribed for. Limitation Act does not apply. [Prabhakar v. Director, Sericulture, AIR 2016 SC 2984].
Q. 3 (b). Discuss the constitution, powers and functions of the Board of Conciliation constituted under the Industrial Disputes Act, 1947. What shall be the consequence if the Board fails to reach any conciliation?
Ans. Constitution of Conciliation Board. Section 5 of the Industrial Disputes Act, 1947 contains the provision for the constitution of the conciliation Board, a body constituted by the appropriate Government by the notification in the Official Gazette for purpose of settling the industrial disputes arising between the employers and employees. The Board shall consist of a chairman, two or four members as the appropriate Government deems fit. The chairman shall be an independent person and the members/ representatives atives o of the parties shall be equal in number and be appointed on the recommendation of the employers and workmen respectively. If any party fails to appoint its representative in the prescribed time, then the Government will appoint such persons as it thinks fit for purpose of that party’s representation. The number of Board shall be 3 or 5. If the quorum is complete, the Board may function even if the Chairman is absent or any member. But if the appropriate Government notifies that the services of the chairman or any member shall not be available, the Board will not function till the chairman or the member, as the case may be, is not appointed.
The main function and duty of the Board is to make an acceptable settlement of the disputes between the parties and send the report to the appropriate Government. In case the Board has failed to reach any settlement, it will assign the reasons of the failure so as to enable the Government to refer the dispute for adjudication to any one of the proper machineries-Labour Court or Tribunal.
Powers and Duties of the Conciliation Board. Section 13 of the Act mentions the functions to be performed by the Conciliation Board. The function of the Board commences only when any industrial dispute is referred to it by the appropriate Government. Some of the powers of the Civil Court are vested in the Board. The Board shall complete its function and send the report of settlement within the period of 60 days prescribed for this purpose. This period of two months may be extended, but with the consent of both the parties. The consent must be in writing, signed by an agreement of the parties. The members of the Board may enter the premises occupied by any establishment to which the dispute relates. The Board has power of-
(a) enforcing the attendance of any person and examining him on oath
(b) compelling the production of documents and material objects,
(c) issuing commission for the examination of witnesses,
(d) such other matters as may be prescribed.
The report of the Board shall be in writing signed by all the members of the Board. Any member may record a minute of dissent. The report when submitted shall be published by the appropriate Government within 30 days of its receipt.
The utility of conciliation proceeding- Such proceeding cannot be called adjudication. Its main function is the mediation and settlement of disputes between the parties. The Board submits its report to the appropriate Government. If the parties do not agree, the matter/dispute is referred to the Labour Court for adjudication. Hence it can be said that the conciliation proceeding has no legal effect and not binding on the parties.