The Legal Framework concerning

IDs
Prof. K.R. Shyam Sundar
XLRI

The Principal Objects of the Act:

promotion of measures for securing and preserving amity
and good relations
investigation& settlement of Industrial Disputes
Prevention of illegal Strike/Lockout
Relief to workmen in the matter of layoff and retrenchment
collective bargaining
Chapter V-A & V-B to provide for regulation of layoff,
retrenchment and closure of an undertaking
Regulating terms and conditions of employment during the
state intervention mechanisms tenure
THE OBJECT OF THE ACT IS TO MAKW PROVISION FOR
INVESTIGATION & SETTLEMENT OF IDs AND FOR CERTAIN
OTHER PURPOSES
MAJOR AMEDNMENTS IN 1976, 1982 AND 2009

Some Basic Terms - Definitions

ID any dispute or
difference between
employers & employers
or between employers
and workmen, or
between workmen &
workmen, which is
connected with the
EMPLOYMENT OR NONEMP OR TERMS OF
EMPLOYMENT OR WITH
THE CONDITIONS OF
LABOUR OR OF ANY
PERSON

Lay off failure or refusal

or inability of an
employer to give
employment to a
workman on the rolls a&
not been retrenched - on
a/c of shortage of coal,
power or RM or
accumulation of stocks or
breakdown of machinery
or natural calamity (see
the provisions) 2 hours,
second half full BASIC &
Dearness Allowance

 Lockout the temporary

closing of a place of
employment or the
suspension of work or
refusal by an employer to
continue to employ any no
of persons employed by
him/her
Strike a cessation of work
by a BODY of persons
acting in COMBINATION
or a CONCERTED REFUSAL
or a refusal under a
COMMON
UNDERSTANDING
Closure means the
permanent closing down of
a place of employment or
part thereof

Retrenchment termination of
services of a worker for any
reason otherwise than as a
punishment inflicted by way of
disciplinary action but
Excludes: VRS,
retirement or superannuation
(as per settlement),
termination due to nonnonrenewal of contract due to
expiry or on agreed conditions,
termination due to continued
illness

Lay off

Lockout

1) Generally occurs in
continuing business
2) Inability to give
employment due to
reasons mentioned in the
law
3) Lay off compensation as
per the law for non
provision of employment
4) This is due to factors often
beyond the control of the
employer

1) Closure of business
temporarily
2) Employer refuses to give
employment and
temporarily closes business
Non-employment not
due to reasons as for layoff
3) Liability would depend on
the legality of lockout
4) Used as a collective
bargaining ploy

Lay off

Retrenchment

1) A measures of economy
2) Declared by the employer
3) Statutory compensation to
be paid
4) Subsistence of employeremployee relationship
during
5) temporary measure

1) A measures of economy
2) Declared by the employer
3) Statutory compensation to
be paid
4) Termination of employeremployee relationship
during
5) Permanent measure

Lockout

Closure

1) Temporary closing of a
place of employment or
the suspension of work
2) Intention is not closure
3) As a collective bargaining
ploy
4) Post-dispute intention to
re-start production
5) NO need for compensation
unless the lockout is held
to be illegal
6) Compliance with law for
legal lockout

1) Closure of business place

on a permanent basis
2) Intention is closure
3) Due to economic or
exigencies
4) No intention at all
5) Compensation according to
the applicable law
6) Prior authorization in some
cases and some
administrative compliance

S. 2-A (1965/2010) discharge, dismissal,

retrenchment or other form of termination and
the dispute arising out of these SHALL BE
DEEMED to be ID even if no other workmen or
any union is a party to the dispute
S. 2-A 2010 Amendment:
The aggrieved worker need to approach con
machinery
After the 45th date she can make an
application to the labour adjudicatory body
for adjudication self referral as if its a govt
referral

Workman
Eight types of employment
(a) Manual
(b) Unskilled
(c) Skilled
(d) Technical
(e) Operational
(f) Clerical
(g) Supervisory
(h) Managerial or
administrative
Main work (principal nature
of duties & functions) test to
decide the category

Clearly included: (a) to (f) (no

salary limit)
Clearly excluded: (h)
Managerial power to make
appointment, take decisions
& assume responsibility to
the matters entrusted
(irrespective of salary)

 Exclusions:
Air force, naval, army
Police service or prison
personnel
Employed mainly in a
managerial or
administrative capacity
Employed in a supervisory
capacity but draws > 10,000
per month or exercises
either by the nature of the
duties attached to the office
or by powers vested in him,
functions mainly a
managerial nature

The mere designation does

not matter
The main nature of duties
and powers conferred on
the employee as well as
the functions

Taxonomy of Industrial Disputes

Industrial Disputes

Interest Disputes

Rights Disputes

Recognition
disputes
Unfair Labour
Practices

Interests and Rights Disputes

Interest

Rights

Also known as collective

labour disputes, conflicts
on interests, economic
disputes
Relate to creation of new
terms & conditions of
employment for the general
body of workers arising
out of deadlocks in
collective negotiations
Compromise give & take
Conciliable

Also known as grievance

disputes, conflicts of rights,
legal, individual disputes
Disputes arising out of
interpretation & application of
existing regulations (incl.
custom) & day-to-day relations
in the establishment
Alleged violation of existing
rights or unfair treatment
Settlement on the basis of
some existing
rulebook/standards
Judiciable

Conflict
Dealing
Methods

Preventive

Work
Committee

Grievance
Redressal
Committee

Investigative

Settlement

State

Court of
Inquiry
Conciliation

Conciliation
Officer

Concili
ation
Board

NonState
Compulsory
Adjudication

LC/TRI
B

NT

Collective
Bargaining

Voluntary
Arbitration

Sources of Grievances
Grievances generally arise from the day-to-day working
relations in the undertaking, usually as a worker or trade
union protest against an act or omission of management
that is considered to violate workers' rights.
Grievances typically arise on such questions as
discipline and dismissal,
the payment of wages and other fringe benefits,
working time, overtime and time-off entitlements,
promotion,
demotion and transfer, rights deriving from seniority, rights
of supervisors and union officers,
job classification problems,
the relationship of works rules to the collective agreement
and
the fulfillment of obligations relating to safety and health
laid down in the agreement

 ID Act 1947 Chapter II-B (Act of 24 of 2010,

with effect from 15 Sep 2010)
20+ establishments (1982-2010 = 50+) to set
up one or more Grievance Redressal Cell for
the resolution of disputes arising out of
individual grievances
GRC = not > 6 & in equal numbers
Chairman by rotation
Half the membership for women
Grievance redressal <30 days from the date of
receipt of WRITTEN application

CONCILIATION
CONCILIATION & C.B.
Historically the practice of
third party intervention via
mediation or conciliation
arose thanks to failures in
negotiations
Hence Con has been seen as
an extension of C.B. or
assisted C.B.
The parties continue their
negotiations at conciliation
The agreement arising out
of con is merely aided by
conciliator voluntary in
nature

DEFINITION OF CONCILIATION
the practice by which the
services of a neutral third
party are used in a dispute
as a means of helping the
disputing parties to reduce
the extent of their
differences and to arrive at
an amicable settlement or
agreed solution (ILO)

Conciliation/Mediation/Arbitration (V.A.&C.A)
CONCILIATION & MEDIATION

CONCILIATION & ARBITRATION

Hair splitting difference

Difference of degree than
kind
Med a stronger form of
intervention mild to up to
offer of solutions
Encourage, facilitate & leave
settlements to parties
weaker form
BUT BOTH USED INTERCHANGEABLY

Differences in approach
aiding/solution giving
In process talks separately
or jointly/hearing process,
always jointly
Informal/ more formal
No judgment/judgment
imposed
Failure possible/award
binding (usually)

 VOLUNARY ARBITRATION VERSUS

COMPULSORY ARBITRATION OR
ADJUDICATION

Conciliation Officer THE LAW

S. 4 (C.II) The govt may appoint any
number of persons to mediate in &
promote the settlement of Industrial
Disputes
S. 12 For bringing about settlement, she
shall without delay investigate the dispute
& all related matters affecting the merits &
the right settlement thereof
She may do all such things as she thinks fit
for the purpose of inducing the parties to a
fair & amicable settlement of ID

Settlement or Failure of Conciliation Conciliation Officer

(CO)
In case of a settlement, the CO shall send a report to authorized
officer with settlement copy [12(3)]
In case of failure, after the closure of INVESTIGATION SEND A
FAILURE REPORT
On consideration of failure report, the govt if satisfied of a case
for refer to adjudication
or else refuse to refer and communicate the reasons for it
[12 (6)] The report should be submitted within 14 days FROM
THE DATE OF COMMENCEMENT OF CONCILIATION PROCEEDINGS
OR WITHIN SHORTER PERIOD AS FIXED BY GOVT though
extendable by Conciliation officer with consensus from all the
parties to the dispute

Labour Court (1 person)

The propriety or legality of an
order passed by an employer
under the standing orders;
The application and interpretation
of standing orders which regulate
conditions of employment.
Discharge or dismissal of workmen
including reinstatement of, or
grant of relief to, workmen
Wrongfully dismissed;
Withdrawal of any customary
concession or privilege;
Illegality or otherwise of a strike or
lock-out; and
All matters other than those
specified in the Third Schedule
ALL MATTERS IN 3rd Schedule if N
= <100 (govt may refer to LC) IMPORTANT

Tribunals (1 person)
Wages, including the period and
mode of payment;
Compensatory and other
allowances;
Hours of work and rest
intervals;
Leave with wages and holidays;
Bonus, profit sharing, provident
fund and gratuity;
Shift working otherwise than in
accordance with standing
orders;
Classification by grades;
Rules of discipline;
Rationalization;
Retrenchment of workmen and
closure of establishment

POWERS OF LAB JUDICIARY

In settling the Industrial Disputes the functions of the
tribunal are not confined to administration in
accordance with law.
It can confer rights and privileges on either parties
which it considers reasonable and proper though they
may not be within the terms of existing agreement.
It is not merely to interpret to give effect to
contractual rights or obligations of the parties but it
can create new rights and obligations between them
which it considers essential fore them for keeping
industrial peace (Bharat Bank vs. The Employees of
Bharat Bank, (1950), LLJ 921

Powers of Labour Judiciary

Power to deliver ex-parte award
Cannot rescind or cancel reference and pronounce no
dispute award for absence of one party and bound by
reference
Power to cancel promotion order by management if
found mala fide victimisation
Tribunal may in consultation with the parties frame rules
for promotion
Pronounce ad hoc rise in wages/interim relief to protect
a party from irreparable loss & balance & convenience
11-A direct re-instatement on such conditions it deems
fit if the dismissal or discharge etc. Was not justified or
lessen the punishment (proportionality principle)

S. 11-A

11-A If the compulsory adjudication

bodies find the orders relating to discharge
or dismissal of workers WAS NOT JUSTIFIED,
they CAN BY ITS AWARD SET IT ASIDE and
order REINSTATEMENT of workers under
such conditions or to GIVE LESSER
PUNISHMENT IN PLACE OF DISMISSAL OR
DISCHARGE as circumstances of the cases
require no fresh record or matter for
these

Award
The decisions of the adjudication body =
AWARD
The final output of a Board/Court = Report
Report or Award shall be published within 30
days by govt
An award is enforceable on the expiry of 30
days from the date of publication unless
govt desires a review on public grounds

CA SOME BASICS
Why Compulsory Adjudication (CA) over CB?
The main objectives of CA model were,
expeditious settlement of industrial disputes,
easy access to disputants (especially weaker),
inexpensive process, administration of
industrial justice in an informal set up (quasi
judicial), the judges of labour judiciary to be
helped by assessors
Qualified presence of lawyering in
adjudication (17/2)

Time Process in Adjudication

Action

Time

Action

Time

Claim statement by
disputant

15 days

Evidence date

1 month or 60 days
from date of ref

Response

15

Adjournments

3 * 7 (normally)

One more chance

by LC

15

Arguments/hearing

15 from close of
evidence

First hearing

<1 month from the

date of ref

Submission of
award

1 month from
arguments or oral
hearing or by GO

Filing of written
statement and
forwarding by LC

15 days

Publication of
award

1 month from
receipt of award

Rejoinder

15

Juridification Thesis

the behaviour of line and personnel managers,

shop stewards and full time officers in dealing
with individual and collective emp issues (is)
determined by reference to legal (or what are
believed to be legal) norms, procedures, rather
than to voluntarily agreed norm and procedures
or to custom and practice (Clark and
Wedderburn 1983 quoted in Saini 1991)
The process involves classification of industrial
matters into two watertight compartments, viz.
lawful or unlawful GREY AREAS SUBJECT TO
LITIGIATION..

Juridification processes Sainis study findings

Though in general disputants perceive CB as the best method
esp. for Collective Disputes, the inevitability of CA is entrenched
in the actors beliefs (inequality fear)
CA works better for employers as it prevents CB; for workers
belief in industrial justice
Shift of power outside voluntary boundaries into judicial system
High use of law specialists MC or outside union leaders
vested interests strengthen juridification
Legalistic arguments - ? The very fundamental issue at dispute
long legal struggle on basic issues (improper espousal of dispute)
Higher average adjournments by law professionals
Long time to settle the cases by labour judiciary on an average
3 years (1113 days)
Legal reasoning sticks to law say MW (min converted into max)
or bonus as per law even otherwise

Judicial administrative burden

On 31-12-1985 cases in SC ranged from 1971 to
1985
Cases reaching SC in 1971 must have had at least
5 years of legal existence in lower courts + 5 years
in HC? = 25 years?
Pending labour matters in 7 HCs in 18985 = 10233
General tendency to rush to SC avoding HC under
A. 136
Terrible impact on weaker adversary is it justice
seeking or weakening and destroying adversary?

Go-slow and Wildcat Strike & Gherao

Go slow:
No cessation of work or
refusal to work or emp
For circumvention
SC disapproves of it:
Is a serious misconduct
being a covert & a more
dangerous breach of
contract of employment
not recognized as a
legitimate weapon of
workers to redress their
grievances (Bharat Sugar
Mills v. Jai Singh, 1961, 2 LLJ
644, SC; Bank of India v. T.S.
Kelawala, 1990, 2 RSJ, I at
15, SC)

Wild cat strike:

Withdraw first and bargain
later not legal in PU
services U.S.22 + S.O. of the
companies
The judiciary considers as
illegal and unjustified
Gherao punishable even if
used for CB purposes
guilty under S. 339 or 340 of
IPC(Jay Engg Works v. State
of WB, AIR, 1968, Cal. 407)
The defense that it was a
concerted action does not
secure them immunity
under S.17 of the TU Act

Fundamental right to Strike

Derivatory argument from Art. 19 (1) (c) for right to

strike
even a very liberal interpretation of sub-clause (c)
of A.19 cannot lead to the conclusion that the trade
unions have a guaranteed right to strike, either as a
part of C.B. or otherwise. (All India Bank Employees
Assn v. National IT, AIR 1962, SC 171
it is a statutory right and not a fundamental right as it
is controlled by law it is a recognized weapon subject
to regulations
It is a part of democracy and to strike to press for their
demands and express their grievances
BUT NOT RAISED TO THE HIGHEST PEDESTAL
DUNDAMENTAL RIGHT TO STRIKE

 No govt servant shall participate in any demo

or resort to any strike in connection with any
matter pertaining to his condition of service
(Rule 4A, Central Civil Services (Conduct)
rules, 1955
TN GOVT EMPLOYEES STRIKE 2003

Section 9-A
No employer shall change the conditions of service in
respect of matters specified in 4th Schedule without
giving the workers affected by such change a notice or
within 21 days of giving such a notice except that the
changes are in pursuance of any agreement or award
Change in weekly holiday or introducing a machinery
on experimental basis and making it a permanent
change - attraction of S.9-A
The objective of the section is to afford an opportunity
to workers affected by changes and hear their
representation industrial democracy
Criticism difficult to introduce technological changes

Chap V-B
Industrial establishment includes:
A factory registered under the Factories Act
A mine under the Indian Mines Act, 1951
a plantation under PLA 1951
Company in which not < 51% of paid-up share
held by Central government

Lay off
25-C lay off compensation = 50% of Basic
wages + Dearness allowance
25-M industrial establishments employing
>99 workers prior permission from govt
before laying off of workers if no
communication within 60 days deemed
permission

Retrenchment 25 - N Chap V-B

No worker who has been in continuous service for not < 1
year shall be retrenched until:
(a) Given 3 months notice giving reasons or payment in lieu
of notice
(b) prior permission of govt via application (or else illegal)
60 days time post which deemed permission
Govt may consider: the employers contentions, workers
views, genuineness or adequacy of employers reasons, the
interests of workers and ALL OTHER RELEVANT FACTORS
grant or refuse permission
Where permission granted = retrenchment compensation =
15 days of average pay for every completed year of
continuous service or any part there of in excess of 6 months
Govt can grant or refuse permission

25-O- Closure chap V-B

Employer shall apply for prior permission at least 90
days before the intended date of closure stating the
reasons
Serve the same notice to representatives of workers
Govt makes enquiry, hear employers, workers, persons
interested in such closure
Regard to the genuineness and adequacy of reasons,
the interests of general public and all other relevant
factors grant or refuse (60 days time for deemed)
The order final and binding and in force for 1 year
(unless suo moto review or referral to adjudication)
Where permission granted, compensation to affected
workers = as if retrenched