LOCK -OUT

• In any Industrial Endeavour co-operation of

labour and capital is quite essential for its
success, although they have interests contrary
to each other. They have different strategies
and weapons to ventilate their grievances and
safeguard their interests. These democratic
weapons often used by them are strikes and
lock-outs.
• Just as strike is a weapon available to
employees for enforcing their Industrial
demands, a lock-out is a weapon available to
the employer to persuade by a coercive
process to see his point of view and to accept
his demands. In the struggle between capital
and labour, as the weapon of strike is available
to labour and is often used by it, so is the
weapon of lock-out available to the employer
and can be used by him.
• Section 2(l) of the Industrial Disputes Act,
1947 defines “Lock-out” to mean:
• The temporary closing of employment or the
suspension of work, or the refusal by an
employer to continue to employ any number
of persons employed by him.
• Lock-out is usually implemented by simply
refusing to admit employees onto company
premises and may include changing locks and
hiring security guards for the premises.
• First known lockout was declared in 1895 in
Budge Budge Jute Mills.
• A permanent discontinuance of business is not
a lock-out, because a lock-out is a temporary
closure of a place of business, not a
termination of the business itself. After a
declaration of lock-out by an employer the
workmen are not required to present
themselves for work.
• Economic reforms in general and labour
reforms in particular are said to have
strengthened the bargaining power of the
employers,.
on the one hand, and have
rendered unions and workers vulnerable, on
the other. Trade unions have been
complaining about the rising incidence of
lockouts. They demand curbs on lockouts
similar to those on closures.
• Strikes are almost always defensive acts,
protesting against the deeds of the employers.
Lockout enhances the bargaining power of the
already powerful employers. Its value and
impact are disproportionately greater than
those of strikes.
 Section23
• Employer cannot go for lock — out in the
following cases:
• During the pendency of conciliation
proceedings before a board and 7 days after
the conciliation proceeding;
• During the pendency of proceeding before a
Labour Court , Industrial Tribunal or National
Tribunal and two months after the conclusion
of such proceedings;
• During the pendency of arbitration
proceedings before an arbitrator and two
months after the conclusion of such
proceedings, where a notification under sub-
section (3A) ofSection10A or
• During any period in which a settlement or
award is in operation in respect of the matters
covered by the award or settlement.
 Effect of illegality of Lockout on
Payment of Wages
• Statesman Ltd v. Their Workmen,(1976)
• North Brook Jute Co. Ltd v . Their Workmen(1960)
• Courts held that, if the lock out is illegal ,full wages
for the period of lockout shall have to be paid to
workers.
 Effect of Legal but unjustified Lockout on Payment of
Wages

• Tribunals and Courts have generally awarded wages to

workmen when a lockout was legal but unjustified.
• In Bharat Barrel and Drum Mfg Co. v. Their Workmen(1952)
• In this case certain workmen turned up for work at the
appointed hour on a certain date. Finding the doors locked,
they waited half an hour and then left. There upon the
management locked its door and demanded explanation from
workmen for not attending the work on concerned day.
• The tribunal held that workmen were entitled to wages for
the lockout period.
• Italkholic Tea Estate v. Their Workmen(1954) in this
case the labour appellate tribunal held that workmen
cannot be denied wages on the ground of their
failure to report for work every day during the
lockout period because lockout implies that the
employer would not allow the workmen concerned in
the dispute to work and the act of the employer ,in
declaring lockout amounted to an anticipatory
breach of contract on his part under any obligation to
present themselves for work.
• Tribunals and courts are often faced with the
situation where unjustified strike was followed by
unjustified lockout and vice-versa . Faced with
this situation , the Supreme Court in India Marine
Service Pvt Ltd v. Their Workmen(1963) evolved
the doctrine of ‘apportionment of blame’.
• Where,however a strike is unjustified and is
followed by a lockout which becomes
unjustified,a case of apportionment of blame
arises.
• Prohibition of lock-outs .
• Section 22 (1) No employer carrying on any public utility
service shall lock-out any of his workmen -
Without giving them notice of lock-out within 6 weeks before
locking-out ; or
• b) Within 14 days of giving such notice; or
• c) Before the expiry of the date of lock-out specified in any
such notice as aforesaid; or
• d) During the pendency of any conciliation proceeding before
a conciliation officer and 7 days after the conclusion of such
proceeding.
•
• The notice of lock-out or strike under this section shall not be
necessary where there is already in existence a strike or
lockout in public utility service, but the employer shall send
intimation of such lock-out or strike on the day on which it is
declared to such authority as may be specified by appropriate
government either generally or for a particular area or for a
particular class of public utility services.
Notice of lock-out(u/s 22(2) shall be given in such
manner as may be prescribed.
If on any day an employer gives to any person
employed by him any such notices as are referred to
in sub section (2),he shall within 5 days thereof
report to the appropriate government or to the
prescribed authority, the number of such notices
received or given on that day.
 Illegal Lock-outs.

• A strike or a lock- out shall be illegal if-

• (i) it is commenced or declared in
contravention of section 22 or section 23; or
• (ii) it is continued in contravention of an order
made under sub- section (3) of section 10 or
sub- section (4A) of section 10A].
• (2) Where a strike or lock- out in pursuance of an industrial dispute
has already commenced and is in existence at the time of the
reference of the dispute to a Board, an arbitrator, or Labour Court,
Tribunal or National Tribunal], the continuance of such strike or
lock- out shall not be deemed to be illegal, provided that such strike
or lock- out was not at its commencement in contravention of the
provisions of this Act or the continuance thereof was not prohibited
under sub- section (3) of section 10 1or sub- section (4A) of section
10A].

• (3) A lock- out declared in consequence of an illegal strike or a strike

declared in consequence of an illegal lock- out shall not be deemed
to be illegal.
 Section 25

• No person shall knowingly expend or apply

any money in direct furtherance of support of
any illegal strike or lock- out.
 Section 26

• Penalty for illegal strikes and lock- outs.

• -(1) Any workman who commences, continues or
otherwise acts in furtherance of, a strike 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 fifty rupees, or with both.
• (2) 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

• Penalty for instigation, etc. 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.
 Section28

• Penalty for giving financial aid to illegal

strikes and lock- outs.-
• Any person who knowingly expends or
applies any money in direct furtherance or
support of any illegal strike or lock- out 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.
• Difference between lock-out and closure. Lock-out and
closure of a business are often confused. This is because
cessation of work is common to both.
• Closure is a fundamental right and if it is not a lock-out, the
workers cannot grudge [J.K. Hosiery Factory v. Labour
Appellate Tribunal, A.I.R. (1956) All. 498].
• The State cannot compel an employer to carry on his
business because several employees may be thrown out of
employment if it is closed. The grounds for closure of a
business may be actual loss or apprehended loss. It may
also be disinclination to run the risk of running the business
[Indian Metal & Metallurgical Corp. V. Industrial Tribunal,
Madras, 3 F. J.R. 420 High Court, Madras].
• The points of difference between a lock-out and closure are as follows:
• In the case of lock-out it is only the place of business which is closed (and
not the business itself), while in the case of closure of a business not only
the place of business but the business itself is closed [Express Newspapers
(Pvt.) Ltd. V. Their Workmen, A.I.R. (1963) S.C. 569]. The closure of a
business indicates the final and irrevocable termination of the business
itself. Lock-out, on the other hand, indicates the closure of the place of
business or the place of employment and not the closure of the business
itself.
• Lock-out is a weapon of coercion in the hands of employer; closure is
generally for trade reasons.
• In closure there is severance of employment relationship whereas in lock-
out there is no severance but only suspension of such relationship.
• A lock-out is caused by the existence or apprehension of an industrial
dispute whereas a closure need not be in consequence of an industrial
dispute.
• Thank you.