Labour Laws

Labour Laws 28 August 2016
Labour Laws
3rd Semister | 3 Year LLB | Karnataka Law University
Shiva Shankara R Shetty is an

practicing chartered
accountant since 2012. He
p ro v i d i n g a p ro f e s s i o n a l
service to the Central and State
Government Undertakings,
Multi-National Companies,
Nationalised Banks, Service
S e c t o r, M a n u f a c t u r i n g
Industries, Real Estate
Developers, etc.
He also possess expert

knowledge in Income taxation
matters, Litigation, Income tax
refund, etc 1.Labour Laws
He also author of the The relationship of ‘master and servant’ which has now transformed
‘Simplified Approach to the to ‘employer and employee’ due to the advent of many labour
legislation requires an in-dept study, particularly of the origin and
Income tax’, a hand book to
development of many labour concept.
the IPCE [Inter mediate of the
Chartered Accountancy] In ancient days, human beings lived in groups. They occupied lands
wherever they vacant and cultivate and in due course, started
He resides in Bangalore. claiming rights over such properties.
Contact us: They worked collectively with the interests of groups in mind. In
such groups, when conflicts arose there used to be physical fights
M: 91 90358 46043 and the victorious group started exercising control and power over
the defeated group. This led to dividing the humanity in to 2 groups.
O: 080 2678 0452 One as ‘Ruler’ and the other as ‘Ruled’, which in course of time led
to master and servant relationship.
E: shetty@ssrshetty.co.in
The ‘group society’ at later stages of development, became small
W: www.ssrshetty.co.in units called ‘families’. ‘Family’ become the unit of the society. The
family system replaced collective group system and by passage of
time, certain families become rich by acquiring more properties and
other became poor. The rich families appointed the members of
poor families as their servants.
The servants physically laboured for their livelihood for the sake of
financial considerations from their masters. The labour system
under the master and servants was unorganised and there was
exploitation of labour in the form of low wages, prolonged working
hours, lack of leave and welfare provisions for labourers, etc.
www.ssrshetty.co.in shetty@ssrshetty.co.in 1
When industrial revolution started in the 18th century, the importance of agriculture was reduced. The large
industries established and urbanisation started. The feudal form of society became a capitalistic form of
society. Industries became the sources and basis of mass production of goods and services to meet the needs
and luxuries of the human beings.
After the 1st World War, rapid technological advancement took place, which led in to the establishment of
industries of mass scale production. The relationship of master and servant slowly got transferred in to the
relationship of employer and employee.
As the employer invested huge amounts as capital, he became more interested to earn more profits than
taking care of the welfare of employees, who were used as the instruments of production of goods and
services. Conflicts started as the labour interests and the employer interests were diametrically opposite. The
labour class of all nations got united to prevent the exploitation of labour. They formed their unions and
represented their interests collectively to the masters.
The establishment of international labour organisation in 1990 supported to labour movement and recognised
the rightful place of labourers. The general laws of master and servants, which existed before the 1st World
War, become out-dated and they needed to be replaced by the labour welfare legislations to protect the status
and dignity of the workers. Thus, the status of ‘servants’ was transformed to ‘workers’ with labour legislations
supporting them.
The master and servants theory was put to an end and the servant was raised to the status of employee/
workers. The master became the employer and duties were imposed on the employer to protect the interests
of the employees.
Doctrine of Laissez
The individual in the society is free to carry on his occupation, trade or business. He has full freedom to
regulate his trade, business or occupation in whatever manner he likes.
The object of this theory is that, there should be growth of the free private enterprises without the
intervention of the Government. It was believed that, such a concept would encourage competition, which in
turn, would result in maximum production of the goods at low cost. The Government interference would kill
the competitive spirit of the businessmen.
As per this theory, Government should not enter in to any business transaction, as it would always result in
loss, as the employees in the Government business would not have competitive spirit to match the
independent fellow businessmen.
2. Industrial jurisprudence
✦ The branch of study dealing with labour legislations is called Industrial Jurisprudence. As per this study, the
concept of master and servant is now gone and it has now become the relationship of employer and
employee.
✦ The ‘hire and fire theory’ is no longer applicable and it is easy to hire now, but difficult to fire a workmen.
✦ The labour laws are strict in dispensing with the services of workmen. The employee now, is treated as co-
partner in business and the right of labour participation in the management is legally recognised.
✦ The benefits claimed by a worker are not as per contract of employment but, out of his status as worker.
✦ The industrial society is now moving from contract to status. The workers now can claim better share in
the productions and profit of the industry
3. Labour policy in India
As per the report of the National Commission on Labour, 1969, the following labour policy was
recommended to the Government to follow in the labour administration.
• cooperation for increasing the ‘production’ and ‘productivity’.
• adequate labour legislation and their enforcement;
• enhancing the worker status in the industry;
• maintenance of industrial peace;
• ensuring the fare wage standards and provisions of social security;
• recognistion of the state as the custodian of the interest of the labour community;
• encouragement to the mutual settlement, collective bargaining and voluntary arbitration;
• intervention by the state in favour of the weaker party to ensure fair and equal treatment to all concerned;
• evolving the partnership between the employer and employees to promote the satisfaction of the economic
needs of the society;
• consultation between employer, employee and Government.
4. Principles of labour legislation
Social justice: Equitable distribution of profits and other benefits of the industry between employer and
workers and protecting the workers against harmful effects to their health, safety and morality.
Social equity: Any standards fixed by the legislation remains in force until it is charged by another
legislation. Such legislations are based on social equity.
Social security: Guarantee provided by the Government against certain risks to which the labourers are
exposed.
Industrial Disputes Act, 1947
5. Objectives of the Act
✦ To bring and maintain industrial peace and economic justice in industries,
✦ Prevention and speedy settlement of disputes between the employer and workmen, so that the industrial
operations are not adversely and permanently affected,
✦ To render economic justice to the workmen by settlement of industrial disputes.
6. Salient features of the Industrial Disputes Act, 1947
• Any industrial dispute between the employer and employee is settled by conciliation proceedings through
Conciliation Officer, Boards of Conciliation, etc.
• In case of failure of conciliation proceedings, the Government may refer the disputes for adjudication by
industrial tribunals, labour courts, national tribunal and through arbitration.
• The awards passed by the industrial tribunals, labour courts, national tribunals and arbitration are all
binding on both the employer and employee.
• The Act prohibits the strikes and lock-outs -
✦ during the pendency of any conciliation or adjudication proceedings,
✦ during the course of settlements,
✦ during the pendency of awards of Industrial Tribunals.
• During the emergency, the Act empowers the appropriate Government to declare certain industries as the
public utility services like transport other than railway, banks, electricity, water, foodstuffs, etc., and impose
restrictions before going on strike or lock-out.
• The Act provides for compensation for lay-off or retrenchments pf workmen by the employer,
• The employer has to pay compensation to workmen in case of transfer or closure of an undertaking.
• Effective enforcement of the provisions of the Industrial Disputes Act,
• It provides protection of workmen, so that his condition of service can’t altered during the pendency of
industrial disputes,
• It provides recovery of wages and other payments through revenue recovery proceedings, in case of award
is in favour of the workmen.
7. Appropriate Government
In relation to industrial disputes, ‘Appropriate Government’ means the Central Government and the State
Government concerned depending on the disputes.
In case of an industry carried by or under the authority of the Central Government or the industry being
located in more than one state, the Appropriate Government is the Central Government. So that, the
problems may be conveniently and uniformly dealt with by the Central Government.
In, Bharat Glass Works P. Ltd Vs. State of West Bengal, held that for an industry carried on under the authority of
the Central Government, it must be an industry belonging to the Central Government i.e., Central
Government Undertaking.
When a banking or an insurance company has its branches in more than one state, the Appropriate
Government, in case of industrial disputes relating to such company, is the Central Government.
In case of a dispute arising in Union Territory, reference may be made by the Central Government. Since, the
Central Government is the Appropriate Government in relation to Inion Territory.
8. Industry
Industry means any business, trade, manufacture, undertaking or calling of employees and includes any
calling, service, employment, handicrafts or industrial occupation of a workmen.
Sec. 2(j) of the Industrial Disputes Act, 1947, states, ‘industry means, any systematic activity carried on by
cooperation between an employer and his workmen’.
The workmen may be employed by the employer directly or by or through any agency including a contractor.
The employment should be for production, supply or distribution of goods or services to satisfy human wants
or wishes.
The term ‘industry’ includes, any activity of the Dock Labour Board and promotion of sales or business or
both. However, the term ‘industry’ doesn’t includes -
✦ agricultural operation, which is carried on as the main activity,
✦ hospitals or dispensaries,
✦ educational, scientific, research or training institutions,
✦ institutions engage in any charitable, social or philanthropic services,
✦ khadi or village industries,
✦ any activity of the Government as sovereign function,
✦ any domestic services,
✦ any professional services, employees being less than 10,
✦ any activity carried on by a cooperative society or a club, the employees less than 10.
However, various judgements held that, the following activities not within the meaning of ‘industry’, they are:
• spiritual or religious service,
• restricted category of clubs, cooperatives, research labs and gurukulas,
• free legal or medical services on honorarium basis.
For the purpose of ‘industry’, it is immaterial whether any capital is invested for carrying on the activity or
such activity is carried on with a motive of making gain or profit.
State of UP Vs. Jai Bir Singh, 2005: The Supreme Court held that, wherever the Government undertake
any public welfare activities in discharge of constitutional obligations, such activities should be treated as
discharge of sovereign functions. The sovereign function is out of preview of ‘industry’. The right of employee
in such activities may be regulated by a separate legislation and not by industrial law.
BWSSB Vs. Rajappa: A 7 judges bench of the Supreme Court exhaustively considered the scope of
‘industry’ and laid down the ‘Triple Test Role’:
✦ if there is a systematic activity;
✦ if organised by cooperation between employer and employees, and
✦ for the production or distribution of goods and services, then there is an ‘industry’ in that enterprises.
9. Important decided case laws
• State of Bombay Vs. Hospital Mazdoor Sabha: The employer was Government running a group of
hospitals. It was contended that government established hospitals for welfare of the people and not as
economic proposition with profit motive.
However, the SC held that, the definition of ‘indutry’ is very wide and it includes all forms of organised
activities for production of goods involving cooperation between the employer and the workmen. Thus, it
held that hospitals established by government for the welfare of the people are also industries.
• Corporation of city of Nagpur Vs. Its employees, 1960: The Governmental and Municipal functions
were industries. Some departments which were engaged in activities partly industrial and partly non-
industrial. In such case, pre-dominant activity shall be taken for note.
If the activity is an industry and if it is carried by a private employer as well as, Government, it is an
‘industry’ within the meaning of the definition. So, the education department, the health department, the
taxation department, etc., of the City Corporation were held to be industries.
• University of Delhi Vs. Ramnath, 1963: It was held that, educational institutions were industries.
• Management of Saf Dar Jung Hospital vs. Kuldip Singh, 1970: The 6 judges of the bench of the SC,
re-examined the whole concept of the ‘industry’ and decided the definition of industry, directly. It laid
stress on the point that the activity must be similar to trade or business. Thus, this decision is overruled the
earlier decision in State of Bombay Vs. Hospital Mazdoor sabha.
• BWSSB Vs. Rajappa, 1978: In this leading case, SC gave a wide meaning to the term ‘industry’ and it
brought clubs, educational and research institutions and charitable projects within the purview of the
definition of ‘industry’.
The SC overruled the earlier decisions and laid down the following conclusions;
✦ if it satisfies the ‘Triple Test Rule’, then it is an industry.
✦ the ownership may be public, private, joint or other sector,
✦ profit motive is irrelevant,
✦ there must be employer and employee relationship,
✦ an organised activity possessing all the above elements, although there is no trade or business, is
‘industry’,
✦ the following are included under the term ‘industry’, if they fulfil the above conditions:
• professions;
• clubs;
• educational institutions;
• cooperations;
• research institution; and
• charitable projects.
✦ If there is mixture of activities, consisting of ‘industrial and non-industrial’ services, then the dominant
nature of services will decide whether it is an industry or not,
✦ Strict sovereign functions are exempted and not the welfare activities or economic adventure
undertaken by government or statutory bodies.
10. Industrial dispute
Industrial dispute means any dispute of difference between:
• Employers and employees, or
• Employers and workmen, or
• Workmen and workmen,
which connected with -
✦ the employment, non-employment, the terms of the employment, or
✦ the conditions of labour of any person.
The workmen can rise a dispute regarding any person if such person is directly or substantially interested in
the conditions of employment.
In ordinary sense, an ‘industrial dispute’ means a dispute between the workmen and the management. There
are 2 limitations for the definition of industrial dispute:
✦ The term ‘industrial’ relates only to industry and its disputes,
✦ Such dispute must relate to the relationship of the employer and workmen, the terms of employment or
non-employment and the conditions of labour.
The real test whether a dispute is an industrial dispute or not, is depends on whether the majority of
workmen are involved in the dispute or not.
Types of Industrial Dispute
• Individual dispute: If any employer discharges, retrenches or dismisses an individual workmen, such
dispute between such workmen and his employer is deemed to be an individual dispute.
• Collective dispute: A dispute, initially initiated by an individual, may be supported by group of workmen
or a union or a sufficient number of workers becomes an collective dispute.
A collective dispute may be relates to any of the following matters:
✦ wages, bonus, profit sharing, gratuity, compensation and other allowances;
✦ working hours, leave with wages, holidays;
✦ rules of discipline, retrenchment of workmen, closure of establishment and nationalisation.
All collective disputes are individual disputes.
• Deemed industrial dispute: The dismissal of an individual workmen is deemed to be an industrial

dispute. Section 2-A of the Industrial Disputes Act provides that, any dispute between a workmen and his
employer, in relation to his discharges or dismissal or retrenchment or termination of services is deemed to
be an industrial dispute.
However, the dispute must be connected with or arises out of such discharge, dismissal, retrenchment or
termination. It is not necessary that other workmen or any union of workmen is also a party to the
dispute.
An individual dispute becomes an industrial dispute when the cause of the particular workmen is taken up by
the majority of workmen in the industry. The number of workmen whose association will convent an
individual dispute in to an industrial dispute, depends on the facts of each case and the nature of the dispute.
However, a dispute which arises after an establishment closed down, is not an industrial dispute and it can’t be
referred for adjudication.
11. Settlement
Normally, a dispute between an individual workmen and his employer referred to conciliation officer or Board
of Conciliation. Settlement is the decision arrived in the course of such conciliation proceedings.
There are 2 types:
A. A settlement which is arrived in the course of conciliation proceedings. In case of settlement between, a
representative of union of workers and the management, then such settlement is binding all the workmen.
B. A written agreement between employer and workmen arrived at otherwise than in the course of
conciliation proceedings. Such written agreement must be signed by the parties to the agreement. A copy
of the agreement must be sent to an authorised officer of Appropriate Government and to the conciliation
officer.
The representative of workers union or the employer can’t discriminate between members of the
representative of union and other workmen who are not members. The benefits, advantages and
disadvantages or liabilities arising out of settlement equally applicable to each workmen in the undertakings.
12. Workmen
Workmen means, any person employed in a industry to do any annual, skilled, unskilled, technical,
operational, clerical or supervisory work for hire or reward. The term ‘workmen’ also includes apprentice.
The term of employment may be expressed or implied, however, the term ‘workmen’ doesn’t include the
following person:
✦ who is subject to the Air Force Act, 1950 or the Army Act, 1950 or the Navy Act, 1957; or
✦ who is employed in the police service or as an officer or other employee of a prison; or
✦ who is employed mainly in a managerial or administrative capacity; or
✦ who draws wages exceeding Rs. 1,600/- per month and function mainly of a managerial nature.
Essentials of the workmen
• The terms of the employment must be exist. However, it may be expressed or implied.
• There must be a employee and employer relationship.
• The workmen should be employed to do the work in an industry.
In case, a contractor employs a workmen to do work which he contracted with a third person, then the
workmen of the contractor doesn’t become a workmen of the third person.
Miss. A Sundarambal Vs. Govt. of Goa, 1987: The SC held that, in order to be a workmen, an employee
should be employed to do any skilled or unskilled, annual, supervisory, technical or clerical work. Judged in
this light, a teacher can’t be called a workmen.
Madikal Services Cooperative bank Ltd. Vs. Labour Court, Kozhikode, 1988 (Kerala): The court held
that, the branch manager of a cooperative bank is not a workmen, because he is responsible for the executive
administration of the bank.
Difference between workmen and independent contractor
Workmen Independent Contractor
1 Employer and employee relationship exist. 1 No employer and employee relationship

exist between workmen and independent
contractor.
2 The employer can control and supervise the 2 The independent contractor can’t control
work done by the workmen. and supervise the work done by the
workmen.
Casual labour: A workmen engaged on a casual basis without a letter of appointment for doing a particular
urgent work. His work automatically comes to an end when the work over. The definition of workmen
includes casual labour also.
Badli workmen: A workmen who is employed in an industry in the place of another workmen whose name
is borne in the master roll of the industry is called ‘Badli Workmen’. However, if he has completed one year of
continuous service in the industry, then he will become workmen of such industry.
13. Award
Interim or final determination of any industrial dispute or of any question relating to it by any Labour Court,
Industrial Tribunal or National Tribunal or Arbitration.
Conditions constituting an Award
✦ It must be interim or final determination.
✦ The dispute must be industrial dispute.
✦ Such determination must be delivered by any Labour Court, Industrial Tribunal, National Tribunal or
Arbitration.
✦ An order of decision permitting the parties to withdraw the dispute doesn’t amount to an award.
✦ An compromise between the parties, in a matter pending before the Tribunal, the decision of the tribunal
based on such compromise is also constitute an award.
✦ The award must be speaking one. Failure to give reasons constitute an error of the law.
✦ An award should be a determination of the dispute. If there is no determination, there can be no award.
✦ Before giving an award, the parties must be heard. An award made without giving a parties sufficient
opportunity of making representation is violation of the principles of natural justice.
✦ An award doesn’t have retrospective effect. However, in certain cases, an Tribunal can pass award
retrospectively.
Publication of the award
Every award of a labour court or industrial tribunal or national tribunal or arbitration must be published
within 30 days from the date of its receipt by the Appropriate Government. However, delay in publication
doesn’t invalidate the award. But, if it is not publishes, it can’t be relied upon.
In case, any award contains any confidential matters, should not be published. Therefore, publication of the
award by the Appropriate Government is not mandatory.
Enforcement of an award
The award should be enforceable within 30 days from the date of its publication. However, an award shall not
become enforceable even after the expiry of 30 days only on the following grounds:
✦ it affects the national economy;
✦ it is not meets the social justice.
The Appropriate Government may make an order, rejecting or modifying the award within 90 days from the
date of its publication. In certain cases, an Tribunal can pass an award retrospectively.
Person on whom award is binding, Sec. 18
• In case of arbitration award: binding all the parties to the agreement.
• In case of an award of an labour court. Industrial tribunal or national tribunal:
✦ all the parties to the dispute
in case an award made under reference covering a particular industry in a specified area, is binding on all
the establishments in that area even if they have not taken part in the adjudicating proceedings.
✦ all the parties summoned to appear in the proceedings as parties to the disputes.
An employer: the award is binding on his legal heirs, successors or assignees in respect of the establishment
to which the dispute relates.
An workmen: the award is binding to all the employees in the establishment, and all the persons who
subsequently become employed in that establishment.
Period of operation of the award
Normally an award is in operation for 1 year. However, the Appropriate Government may reduce or increase
the period. But the total period of operation of any award shall not exceed 3 years from the date of its
enforcement.
Appeal to High Court or Supreme Court
The aggrieved party can challenge the award before the High Court or Supreme Court on the grounds of
✦ jurisdictional errors;
✦ violation of the principles of natural justice;
✦ question of the law, etc.
However, any award of any labour court, industrial tribunal, national tribunal or arbitration can’t challenge in
any civil court.
Difference between the Award and Settlement
Award Settlement
1 Award is passed by adjudicating authority. 1 Settlement is the result of the effort of

It may be interim or final determination. conciliation officers or Board of
Conciliation.
2 There are 2 types of awards namely interim 2 There are 2 categories: One is a
award and final award. settlement which is arrived at in the
course of a conciliation proceedings and
second is a written agreement between
employer & workmen arrived otherwise
than in the course of conciliation
proceedings.
3 It is in the nature of judgement. 3 It is in the nature of compromise.
4 It prohibits a suit or action in a civil court. 4 It doesn’t prohibits a suit or action in a civil
court.
5 It is enforceable after its publication. 5 It is enforceable immediately.
6 It is passed by the presiding officer of the 6 It is an conciliation or agreement by the

Tribunal, Labour Court or Arbitration. parties themselves.
14. Strikes
It is a collective stoppage of work by workmen to bring pressure on employer or management. Strike is

generally ‘workers last resort’ to settle their disputes with the management. Mere absent from work doesn’t
amount to participation in a strike. The strike must be out of some consent among the workmen that they
would not continue to work.
Refusal to work even for a few hours amounts to strike provided there is a common consent among the
workers.
Prohibition of strikes, Sec. 22
Public utility services, Sec. 22(1): Employers in public utility services must not go on strike without fulfilling
the following 4 conditions:
• A notice of strike must be given within 6 weeks before the strike. A strike notice is valid only 6 months.
After the expiry of such 6 weeks, a fresh notice of strike must be given again.
• The employees must not go on strike within 14 days of giving such notice. So, a strike immediately after the
notice is also illegal.
• The workmen should not go on strike before the expiry of the dates specified in the notice, which was
already served to employer.
• The workmen should not go on strike during the pendency of conciliation proceedings before the
conciliation officer and within 7 days after the conclusion of such proceedings.
In other words, the strike can be commenced from the 8th day of the conclusion of such proceedings.
Rules
✦ Notice may be given by the Trade Union or the Representative of the workmen authorised in this behalf.
✦ Notice of strike must be given by prescribed number of persons in the prescribed manner.
✦ The employer has to report to Appropriate Government or Authority within 15 days from the receipt of
such notice.
Industrial undertakings, Sec. 23
• A workmen should not go on strike during the pendency of conciliation proceedings before the Board of
Conciliation and within 7 days from the conclusion of such conciliation proceedings.
• The workmen should not on strike during the pendency of proceedings before any labour court, industrial
tribunal, national tribunal or arbitration and within 2 months from the conclusion of such proceedings.
BR Singh Vs. Union of India, 1989: The SC held that, strike is a form of demonstration. Though the right to
strike or right to demonstrate is not a fundamental right, it is recognised as a mode of redressed for resolving
the grievances of the workers. However, it is not an absolute right and subject to provisions of the Industrial
Dispute Act, 1947.
Illegal strikes, Sec. 24
In the following cases, strike is deemed illegal:
✦ Public utility services: If the 4 conditions given are violated, it is illegal strike.
✦ Industrial undertaking: If the 4 conditions are violated, it is illegal strike.
✦ The appropriate Government by order, may prohibit the continuation of strike in the connection with any
dispute referred to the Board of Conciliation, Labour Court, Industrial Tribunal, National Tribunal or
Arbitration.
Consequences of an illegal strike
• loss of pay for the period of strike;
• loss of benefit of holidays with wages;
• suspension of pending enquiry for their alleged misconduct;
• dismissal of workmen;
• punishment with imprisonment or fine or both;
• no recovery of conciliation to illegal strike;
• if the employer is not guilty of unfair labour practices and he has also engaged other workmen in the
interim period to continue the work, the striking employee have no right to reinstatement nor to wages.
Wages during the strike period
Wages may be given to the workmen for the period of strikes, only if the strike is legal and justified.
15. Lock-out
Lock-out is temporary closing of place of employment or suspension of the work or refusal by the employer to
continue to employ any number of persons employed by him.
In other words, lockout is an temporary closure of the place of business. It succeeds the strike. Lockout is the
weapon for the employers, as strike is the weapon for the workmen.
However, the following are not lockout -
✦ Retrenchment of an workmen on the basis of rationalisation of employees in the establishment;
✦ Preventing the employees, who are terminated from the service, coming to the place of work;
✦ An employer refusing to allow ‘late-comers’ on a day to work on that day.
Difference between strikes and lockouts
Strikes Lock-out
1 It is an collective stoppage of the work by 1 It is an temporary closing of place of

workmen to bring pressure on business by the employer.
management.
2 It is an weapon in the hands of employee. 2 It is an weapon in the hands of employer.
3 It is initiated by the employees. 3 It is succeeding to strikes.
4 The employer may appoint substitutes 4 The undertaking absolutely stop the
workmen to continue the work. works.
5 For illegal strikes, workmen will not get 5 For illegal lockout, workmen will get
wages during the strike period. wages during the lockout period.
16. Lay-off
Layoff is the failure or refusal or inability of an employer to provide employment to his workmen on the
account of -
• Shortage of coal;
• Shortage of raw material;
• Break down of any machinery; or
• Accumulation of stock for any other reason.
The name of the workmen to be laid off must be present in the muster roll. Layoff takes place only in a
continuing business. During the layoff, only a portion of business is closed. The employee must not have been
retrenched.
Non applicability of the provisions of layoff
✦ The provisions of the layoff do not apply to industries containing 50 persons or less than, the average
number of persons working in a day in the preceding calendar month.
✦ The provisions of the layoff will not applicable to season industries. The Government will decide whether
the industry is seasonal or temporary. The decision of the Government is final and it can be questioned in
any Court.
Circumstances of layoff
Under the following 3 circumstances layoff takes place:
• If any workmen present himself for the work at the appointed place and if he is not given any work with 3
hours, then it is layoff for the day.
• If any workmen is not given any employment in the first half of the shift, but given in the second half of the
shift, they layoff is only for half a day.
• If any workmen is given employment for a few hours in both first and second half of the shift, then there is
no layoff and it is considered as a full working day and full wages is given for the day.
Conditions for layoff compensation
✦ The name of workmen must be present in the muster roll.
✦ The workmen should not be temporary, casual or badli worker.
✦ The workmen must have completed 1 year of continuous service.
The continuous service means, uninterrupted service. However, any interruption due to following accounts
will not be considered and the service is deemed to be continuous. The accounts shall be -
• Sickness;
• Authorised leave;
• An accident;
• A strike which is legal;
• Lockout;
• Cessation of work which is not due to any fault on the part of the workmen.
The total period of continuous service shall be include the Government and weekly holidays.
Layoff compensation
✦ Layoff compensation is 50% of basic pay and dearness allowance.
✦ In case, layoff exceeds 45 days either continuously or intermittently then the full wage must be paid to the
workmen.
However, any agreement between the employer and employee, then additional one week in extent of 45 days,
the layoff compensation shall be paid to the workmen.
The employer can retrench a workmen after the said 45 days. But he has to pay retrenchment compensation.
The layoff compensation already paid can be deducted from the retrenchment compensation.
Workmen not entitled to compensation
• Alternative employment: When the workmen refuses to accept any alternative employment in the same
establishment or any other establishment of the industry within a radius of 5 miles -
• such alternative employment not require any special skill or experience
• same wage as in the original employment shall be paid
• The employee doesn’t present for work at the establishment and at the appointed hour during the normal
working hour atlas once a day.
• If layoff due to illegal strike or slow down production by the workers.
17. Notice of change
As per Sec. 9-A of the Industrial Disputes Act, 1947, it is compulsory for the employer to serve a notice before
making any change in the conditions of service of any workmen in any respect of the matters specified in the
schedule. Fourth schedule relates to -
• Wages, period of wages and mode of payment,
• Employer contribution to any labour welfare funds,
• Compensation and other allowances,
• Working hours and intervals,
• Leave with pay and holidays,
• Starting, alteration or discontinuance of shift working,
• Classification by guards,
• Withdrawal of any privileges,
• Introduction of any new rules or alteration of existing rules,
• Improvement of plant or techniques which results to retrenchment of the workmen,
• Any increase or reduction of employees other than casual workers.
Notice in the prescribed manner shall be given to the workmen who will be affected by the change, stating
the proposed changes to be made.
The change should be affected after giving a time of 21 days. Any changes made within 21 days, it becomes
invalid.
The purpose of giving a notice to the workmen is to give an opportunity to the workmen to consider the
effect of a proposed change and if necessary, to present their view on the proposal.
When a workmen is retrenched, it can’t be considered as change in his condition of service, and hence no
notice is necessary.
18. Retrenchment of workmen
Retrenchment means termination of service of a workmen for any reason by the employer. However, such
termination should not be resulted as punishment by way of disciplinary action. The followings are not
considered as retrenchment:
✦ Voluntary retirement,
✦ Retirement at the age of superannuation, if there is a stipulation in the contact between the employer and
employee,
✦ Termination of service on the ground of continuing illness,
✦ Termination of service due to non renewed of contract,
✦ Compulsory retirement: Service of the workmen is concluded and hence, it amounts to termination of
services.
Difference between retrenchment and closure of business
Retrenchment Closure of Business
1 Termination of service of a workmen for 1 Closing of the business or establishment

any reason by the employer otherwise for trade reason.
than punishment.
2 It affects only some workmen whose 2 It affects all the employees.

service has been terminated.
3 The business remains undisturbed and it 3 The business will be discontinued.

continues.
4 The compensation is equivalent to 15 4 In case of closure, due to bonafide

days average pay for every completed reasons, no compensation is given.
years of continuous service and any part
in excess of the 6 months.
To invoke the provisions of retrenchment, the workmen must have continuous service of 240 days in a
calendar year of 365 days.
Conditions for retrenchment
Such persons can be retrenched, only if the following conditions are fulfilled. Otherwise, the retrenchment is
invalid.
• One month notice specifying the reason in writing must be given.
• In case, notice period is less than one month, then one month salary must be paid.
• If there is an agreement between the employer and employee about the termination of service, then no
notice is required.
• The compensation is 15 days average wages for every completed years of continuous service. In case of,
incomplete year of service is less than a year, but exceeds 6 months, then it has to be taken as one calendar
year.
• The notice must be sent to the Appropriate Government or any other specified authority in this regard.
Compensation is a mandatory pre-condition for retrenchment of a workmen. Therefore, non-payment of

compensation renders a retrenchment is invalid. It also attract penalty under the Industrial Disputes Act,
1947.
If retrenchment is proved unlawful, the workmen has a right to reinstatement with continuity of service and
right to wages for such period.
If pre-requisite have not been complied, the termination of service is void ab initio.
19.Labour courts
The Appropriate Government may constitute one or more courts for adjudication of industrial disputes. The
labour courts consists only one person, called ‘Presiding Officer’. The following persons shall be appoint as a
presiding officer:
• High Court Judge, District Judge or Additional District Judge with at least 3 years of experience;
• Any judicial officer worked as Chairmen of Labour Appellate Tribunal at least 5 years;
• Any other judicial officer with 7 years experience or more.
However, the following persons shall not be appointed as the presiding officer of a labour court:
✦ Any person who is not an independent,
✦ Any person who attained a age of 65 years.
Functions of the labour courts
• The Appropriate Government may make a reference of any industrial dispute to the Labour Court for
adjudication.
• In addition to the above, the following matters can be adjudicated by the labour court:
• the legality of an order passed by the employer under the standing order;
• discharge or dismissal of workmen including the reinstatement;
• grant of relief to wrongly dismissed workmen;
• withdrawal of any benefit or privileges or perquisites;
• legality of strike, lockout;
• any other matter in relation to industrial dispute.
The Labour Court has to adjudicate the industrial disputes relating to the matters within its jurisdiction.
When an industrial dispute has been referred to the labour court, it should hold proceedings immediately and
submit its award within the specified period to the Appropriate Government.
The award should be in writing and signed by the presiding officer. The award should be published within 30
days from the date of its receipt by the Appropriate Government.
Powers of the Presiding Officer
✦ The presiding officer may, after giving a notice, enter in to the premises of the establishment where there is
a dispute.
✦ The labour court shall have the same powers as are vested in a Civil Court regarding the following:
• enforcing the attendance of any person and examining him on oath;
• compelling the production of documents;
• issuing commissions for examining the witnesses;
• any other matter as may be prescribed.
✦ The Court may appoint one or more Assessor to advice in the proceedings before it.
When a industrial dispute is referred to labour court, the Appropriate Government may prohibit the
continuance of any strike or lockout in connection with such dispute.
20.Protected workmen
A executive member or other member of recognised trade union is known as ‘protected workmen’. Sec. 33(4)
provides that, in every establishment, the number of protected workmen must be 1% of the total number of
workmen employed therein.
However, the total number of protected workmen should not less than 5 and should not exceeds 100. The
employer should not adversely alter the conditions of service of workmen immediately before the
commencement of such proceedings. The employer should not discharge or dismiss such protected workmen,
during the pendency of any adjudicating proceedings.
21. Closure of an Industrial Undertaking
An employer who intends to close down an undertaking must serve notice to the Appropriate Government at
least 60 days prior to the date on which it is to be closed.
The notice should be served in the prescribed manner and should clearly state the reasons for the closure of
the undertaking. Any employer who fails to comply these provisions, shall be punished with imprisonment up
to 6 months or fine or both. Fine shall be Rs. 5,000/-
Exceptions to the Sec. 25FFA of Industrial Dispute Act, 1947
• A undertaking contains less than 50 workmen;
• A undertaking where less than 50 workmen were employed in the preceding 12 months;
• An undertaking set up to construct buildings, canals, deems, roads or bridges.
Under exceptional circumstances like death of the employer or accident in the undertaking, the Appropriate
Government may exempt the undertaking from the application of Sec. 25FFA.
Compensation to the workmen
✦ If an undertaking is closed down due to unavailable circumstances beyond the control of the employer, the
compensation to be paid, shall not exceed 3 months average pay.
Average pay = average pay of the 12 complete months immediately preceding the months in which the
event occurs.
✦ If an undertaking is closed down for any reason, every workmen who has been in continuous service for one
year or more, is entitled to notice and compensation. Such compensation is paid as if the workmen has
been retrenched.
✦ If an undertaking set-up for construction of building, bridges, etc., and such construction completed within
2 years, then compensation will not be given to any workmen.
But, if the construction work is not completed within 2 years, then compensation is payable.
✦ If an undertaking engaged in mining operation is closed down due to exhaustive of the minerals in the area,
then under the following conditions satisfied, the workmen are not entitled to any compensation.
• The employer provides alternative employment from the date of closure, at the same pay.
• Such alternative employment not interrupt the service of the workmen.
✦ The closure of business must be genuine and bonafide.
Procedure for close down an undertaking
• File a application for permission to close down the undertaking, to Appropriate Government at least 90
days before the proposed date of closure.
• The application should be in prescribed manner and clearly state the reason for the intended closure.
• A copy of the application shall be served simultaneously to the representation of the workmen.
• The Appropriate Government shall make such enquiry as is needed and may give reasonable opportunity of
being heard to the employer, the workmen and the interested persons in the closure.
• Then it will grant or refuse the permission for closure. Before making such order, the Appropriate
Government shall take account of the genuineness and adequacy of the reasons stated by the employer, the
interests of the general public and all other relevant facts.
It shall also record the reasons and send a copy of it to the employer and the workmen.
• Once, the permission is received, every workmen who employed in that undertaking before the date of
application for permission of closure, is entitled to compensation.
• The order of granting or refusal is final and binding on all the parties. It shall be valid for one year. The
Appropriate Government may, on its own or on the application by the employer or any workmen, review its
order or refuse the matter to an Industrial Tribunal for adjudication.
• If the permission is refused, the closure of an undertaking is deemed to be illegal from the date of its
closure and the workmen shall get all the benefits as if the undertaking has not been closed.
Deemed approval
If the Appropriate Government doesn’t communicate the order by either granting or refusing to grant
permission to the employer within 60 days, the permission is deemed to have been granted on the expiry of
70 days.
• Un avoidable circumstances for close down an undertaking; or
• Due to financial difficulties; or
• Due to accumulation or undisposed stocks; or
• Due to the expiry of lease period or lien granted to it; or
• In case of mines, due to shortage of the mineral in that area.
Difference between layoff and closure
Lay - off Closure
1 Failure or refusal or inability of the 1 The business comes to an end. It is the

employer to provide an employment to final and irrevocable termination of the
the workmen. business itself.
2 The reason may be, shortage of coal or 2 The reason may be, due to un avoidable
raw material, break down of any circumstances or any other reasons.
machinery or accumulation of stock for
any other reason.
3 The name of the workmen must be 3 No such conditions.

present in the muster roll.
4 Prior permission of the Appropriate 4 Prior permission of the Appropriate

Government is not required. Government is required.
5 Compensation: 50% of basic pay and DA. 5 Compensation: 15 days salary for every
completed year of the service.
22. Unfair labour practices
Unfair labour practice on the part of employers
• threatening workmen with discharge or dismissal, if they join a union.
• threatening lockout or closure of a union is organised.
• wage increase to the workmen at crucial period of union with a view to undermine their efforts.
• to dominate, interfere with, contribute or financial support to any particular union out of several unions.
• to establish employer sponsored unions of workmen.
• to encourage or discourage membership in any union by discriminating against any workmen, with a
weapon on discharge or dismissal, etc.
• discharging or dismissal of workmen without good faith, or false reason, etc.
• entrusting regular work to the contractor, in order to break a strike.
• malafide transfers.
• to insist upon individual workmen, who are on a legal strike to sign a good conduct bond.
• to show favouritism to one set of workers irrespective of merits.
• to employ workmen as casual and continue them for years without depriving them of their permanent
status of a workmen.
• to recruit workmen during the legal strikes.
• failure to implement an award or settlement or agreement.
• to indulge violence.
• to refuse to bargain collectively in good faith with the recognised unions.
• proposing or continuing a illegal strike.
Unfair labour practice on the part of employees
✦ to support any illegal strikes.
✦ to disturb a loyal workmen to carry out their routine and legitimate work.
✦ to indulge any violence with the management staff as well as with the non-striking workmen.
✦ to encourage or instigate any wilful ‘go slow’ or squatting on the work premises after working hours
‘ghereao’ of any of the managerial person or other staff.
✦ to stage demonstration at the residence of the employers or the managerial staff.
✦ to indulge a wilful damage to employer’s properly connected with industry.
✦ to indulge act of force or violence against any workmen with a view to prevent him from attending work.
23. Domestic enquiries
Conduct rules:
✦ Every employee must all the times maintain absolute integrity, devotion to duty and comply with and obey
all the orders and directions of superior officers.
✦ Every employee holding a supervisory post must take all possible steps to ensure the integrity and devotion
to duty of all employees working under his control and authority.
Mis conduct
The following acts of omission or commissions are treated as misconduct and these acts are only illustrative:
• Theft, fraud or dishonesty in connection with the business or property of the industry.
• Taking or giving bribes or any illegal gratification.
• Furnishing false information regarding name, age, father name, etc.
• Wilful disobey of any lawful and seasonal order of his superior.
• Unauthorised leave.
• Habitual late or irregular attendance.
• Negligence in the performance of duty.
• Damage to any property of the industry.
• Tampering with any safety devices installed in the premised of the industry.
• Drunkenness or indecent behaviour in the premises of the industry or outside of such premises where such
behaviour is related with the employment.
• Gambling within the premises of the establishment.
• Sleeping while on duty.
• Commission of any act which amounts to a criminal offence involving moral turptitude.
• Absence from the employee’s appointed place of work without permission or sufficient cause.
• Smoking within the premises of the establishment where it is prohibited.
• Purchasing or selling of any property, machinery, stores, etc., without express permission from the
competent authority.
Steps for imposition of penalty
✦ Receiving the complaint of misconduct or misbehaviours.
✦ Investigation of the complaints.
✦ Making the charge sheet.
✦ Communication of charge sheet to the concerned person.
✦ Reply to the charge sheet from the concerned person.
✦ Appointment of enquiry officer.
✦ Conduct of enquiry.
✦ Inspection of enquiry.
✦ Submission of enquiry report to the management.
✦ Obtain a written representation by charged employee.
✦ Issuing a final order by competent authority.
✦ Appeal to the Appellate Authority.
Principles of the Natural Justice
In every disciplinary proceedings, the rules of natural justice must be strictly adhered. Otherwise, the enquiry
will be set-a-side for violation of natural justice. Hence, the competent authority, enquiry authority and the
Appellate Authority must be fairly conversant with the principles of the natural justice.
The principles of natural justice are neither nor prescribed in any code. It expresses the close relationship
between the common law and moral principles. Natural justice is also known as ‘Substantial Justice’ or
‘Universal Justice’.
NTC Ltd., Vs. Anjan K. Saha, 2004: The enquiry report was not supplied to delinquent employee and he was
terminated from service. The High Court ordered for reinstatement will full monetary dues.
However, the Supreme Court set-a-side the High Court order and held that, the correct procedure would be
to conduct fresh enquiry from the stage of supply of enquiry report.
Setting-a-side a Domestic Enquiry
An enquiry report and penalty imposed based on the enquiry report can be set-a-side on the following
grounds:
• If the appointment of enquiry officer is defective;
• If there is any pecuniary bias, personal bias or official bias;
• If there is no fair hearing by the enquiry officer, i.e.
✦ charged employee denied of the right of making presentation;
✦ right to know the other side’s evidences;
✦ right of oral hearing.
• If the enquiry report is not based on evidence or reasons;
• If there is procedural irregularities in conducting the enquiry like -
✦ notice not served;
✦ denial of representation by the counsel, etc.
• If the person who has conducted the enquiry didn’t decide the case;
• When the enquiry report is not supplied to the charged employee.
24.Back wages & Recovery of money due from an Employer
Back wages
Back wages means the ‘wages’ which the workmen is entitled to receive, from the date of retrenchment or
termination of service. In every case of reinstatement, there is no entitlement for full back wages and it
depends upon the facts of each case. It also depends on gain full employment, or non employment of the
employee, nature of charge, etc., and tribunals or courts has full discretion in this regard.
In case of suspension - 50% of the wages up to 6 months and afterwards, 75% of the wages till the enquiry
gets over.
In case of convicted or charges provided - not entitled to the back wages. But, the charges disapproved, then
he is entitled to recover the back wages.
Recovery of money due from an employer
The application for recovery of money due may be filed to the Appropriate Government and if the
Government is satisfied that the claim is genuine, then, it issues a certificate for that amount to the collector.
The collector recovers the amount as an arrears of the land revenue.
In addition to that, a workmen can file a case before labour court for recovery of back wages, etc., subject to
the fulfilment of the following 2 conditions:
✦ A workmen must be entitled to receive from the employer any amount or benefit which is capable of being
computed in the terms of money;
✦ A question should have arisen about the amount of money due or as to the amount at which such benefit
should be computed.
25. Registration of trade union
Any combination or association formed for the purpose of regulating the relations between the workmen and
the employees, workmen and workmen or employers and employers. A trade union may also include two or
more trade unions within itself. However, the following do not constitute trade unions:
• Any agreement between partners as to their own benefit;
• Any agreement between employee and employer as to the employment; or
• Any agreement in consideration of sale of goodwill of a business or of profession in any profession, trade or
handicrafts.
Minimum requirement for a trade union or conditions
• There must be combination of employer and workmen;
• There must be business or trade;
• The main object of the trade union is -
• to regulate the relationship between the employer and the employee; or
• to impose restrictive conditions on the conduct of any business or trade.
However, registration of the trade union is not compulsory. However, a registered trade union or association
will get a rights and privileges under the Act.
Rights and benefits of the registered trade unions
✦ To make a representation of the workers in any collective bargaining;
✦ To rise or enters in to any agreement with the employers in respect of any question concerning the terms
and conditions of the employment;
✦ To collect membership fee from the workers;
✦ To put up a notice board and affix the notices;
✦ To discuss with the management, about worker’s grievances;
✦ To inspect the place of work;
✦ To appoint a representative to grievances committee or any other committee formed for the purpose of
workers.
Prerequisite for registration of the Trade Union
The following conditions must be satisfied to register a trade union:
• There must be a 7 or more subscribers;
• The subscriber must be subscribe their names in the Rules;
• All the provisions of the Trade Union Act must be complied.
Procedure of Registration of Trade Union, Sec. 5
✦ Application: The application shall be filed in before the Registrar for registration of trade union. The
application must be contain the following details:
• Name, address and occupation of the subscribers to the Rules;
• Name and address of the Trade Union; and
• Name, address, age and occupation of the office bearers of the union.
✦ If any union exist more than one year, the application should also contain a statement of the assets and
liabilities of the trade union.
✦ Notice to a Registrar: The subscribers must give a notice to the Registrar with the following details:
• Name of the trade union and its objects;
• The lawful object for which the general fund is to be used;
• The amount of the subscription;
• List of the members;
• The conditions under which the fund benefits go to the workers;
• The mode of admission of temporary office bearers;
• The mode of amendment of Trade Union Rules;
• The method of removal of office bearers;
• The manner of dissolution of trade union.
✦ On receiving the application, the Registrar makes a study of the contents of the application. If the Registrar
is satisfied with the notice and particulars, he will register the trade union and will issue a certificate of the
registration.
• If the application is incomplete, he may call for further information or he may refuse to accept the
application form.
• The Registrar may even require the members to alter the name of the Trade Union.
• Certificate of Registration is the conclusive evidence that the Trade Union has been duly registered under
this Act.
26.General Fund
Every trade union has the privilege of having 2 funds namely - General fund and Political fund
General fund: The amount out of general fund, can be spent to the following purposes:
• to pay salary and other allowances of the office bearers of the trade union;
• to incur administrative expenses;
• to compensate any member for loss arising out of any trade dispute;
• to incur legal expenses;
• to pay allowance to the members and their dependants on account of death, sickness, accident,
unemployment, etc.
• to pay premium on insurance policy towards members;
• to educational, social or religious, etc for the members;
• to publish newsletters, magazine, etc., for the members;
• any other object as notified by the Appropriate Government in the Official Gazette.
Cancellation/Withdrawal of the Registration, Sec. 10
✦ On the application of member of the Trade Union;
✦ If the certificate is obtained by fraud or mistake of facts;
✦ If the trade union has wilfully contravened the provisions of the Act;
✦ If the Registrar is satisfied that a registered union of workmen ceases to have the requisite number of
members;
✦ If the original rules in the application form are rescinded.
The Registrar must give 2 months prior notice to the members of the trade union indicating the grounds on
which he has proposed to cancel or withdraw the registration of the trade union.
27. Immunity available to the Trade Union
• Any office bearer or member of a registered trade union will not be liable to punishment under section 120-
B (Criminal Conspiracy) of the Indian Penal Code for any act of furthering any object of the union.
• However, if trade union member commits any offence, then such immunity is not allowed and the members
are liable as other persons.
• Protection to the office bearers or members of the trade union is only regarding their acts made for the
purpose of promoting any legitimate object of the union.
• Collective action such as strike or picketing though interfere with the trade or business of the employer,
the office bearer and members are given protection against prosecution for criminal conspiracies. But, such
act should not be commit any offence like assault of any officer, etc.
• Immunity from the civil suit, Sec. 18
A legal proceedings shall not be maintainable in any civil court against the office bearers or members of the
trade union in respect of any act done in furtherance of a trade dispute.
But, they are liable for all other acts of violence or vandalism or any deliberate trespass. The trade union also
not liable in any suit in any civil court for any tortious act done in furtherance of the trade dispute.
28.Collective Bargaining
Collective bargaining is an technique used for compromising the conflicting interests of the employer and the
employees. It involves discussion and negotiation between the workers and the management on work, pay,
working condition, career advancement, production target, sales target, quality standards, etc.
The word ‘collective’ is used because the representation of both the employer and the employees meet and
discuss in order to arrive at a settlement. The word ‘bargaining’ is used because during the process of
negotiation, certain proposals and counter proposals are made from either side.
Collective bargaining refers to a process by which employers on the one hand and representatives of
employees on the other - attempts to arrive at agreements covering the working conditions of the employees.
An individual is free to bargain for himself and safeguard his own interest. However, the position becomes
different if a bargain is made by a body or association of the workmen; they can negotiate and settle their
terms with the employer in a better way and secure better wages, better terms of the employment and greater
security - because ‘unity is strength’.
Objectives of collective bargaining
• Democratic approach to solve the work related problems;
• Avoid intervention of 3rd parties;
• Provides better relationship between the employer and the workmen;
• Prevents unilateral action on the part of the management;
• Mutual beneficial settlement.
Need for Collective Bargaining
The management and the employees in any industry always have conflicting interests. While the management
always thinks in the terms of reducing cost, maximising the production, and sales and greater commitment on
the part of the employees.
The employees always think in the terms of the higher pay, better working conditions and greater recognition
of the work. It is, therefore, necessary that both the management and the employees arrive at a settlement on
every important proposal. This is achieved through ‘Collective Bargaining”.
Kinds of Collective Bargaining
• Negotiation: The process of selling the differences by face-to-face in ‘Round Table Talks’ between the
representatives of the employees and employers.
• Mediation: Only in case of failure of negotiation, a third party intervention for the settlement of labour
dispute by way of mediation is resorted to.
The mediator doesn’t act as a judge, but he assist the parties to reach an agreement by persuading them to
continue their bargaining efforts.
• Arbitration: Arbitration is, submission of dispute to the decision of the third party called the Arbitrator
who decides the dispute in a judicial manner.
The Arbitration may be voluntary or compulsory. There need not be actual dispute exist between the
parties. If there is difference either in opinion or interpretation of some words, agreement or otherwise,
then such differences may also be referred to a third party called Arbitrator for a decision.
The differences must be presently existing. Future expected differences doesn’t allow for arbitration.
Arbitration is referred to individual only. The arbitrator should not be interested in the dispute and should
not related to both the parties to the dispute.
In case of voluntary arbitration, the selection of arbitrator entirely rests with the parties to the dispute.
The award is binding on the parties and also enforceable in the courts.
29.The Workmen’s Compensation Act, 1023
Objects of the Act: Since there is increasing use of machineries in industries, there is consequent danger to
workmen with the injuries while operating them. Hence, the workmen should be protected from accidents
arising due to the operation of the machineries.
The Workmen’s Compensation Act was enacted with a view to guarantee the payment of compensation to the
workmen incapacitated by an injury from accident arising out of and in the course of employment.
The main object of the Act is to provide compensation to a workmen only in case of injuries and to his
dependant’s in the case of his death. The Act affords protection to a workmen even if the accident has been
caused by some negligent act of the employee or employer.
Under this Act, the payment of compensation by the employer to workmen is obligatory.
Employer’s liability for compensation
30.Personal injury by accident
The following conditions must be fulfilled to make an employer liable to pay compensation to a workmen.
✦ Personal injury must have been caused to a workmen;
✦ Such accident must have been caused by an accident;
✦ Such accident must be incur during the employment; and
✦ The injury must have resulted either in the death of the workmen or in his total or partial disablement
for a period exceeding 3 days.
The employer is not liable to pay compensation in the following cases:
• If the injury didn’t result in total or partial disablement of the workmen for a period exceeding 3 days.
• If the workmen was at the time of accident under the influence of drinks and drugs.
• If the workmen wilfully disobeyed the safety measures.
✦ Mere death in ordinary course by some badly disease or ailment doesn’t constitute personal injury by
accident.
✦ The word ‘injury’ and ‘accident’ means that, there is existence of some external factor to cause death apart
from the internal ailment /disease in the body.
• Personal injury: The word ‘injury’ means damage caused to a workmen by some accident. Accident
means an unforeseen event. The Act provides compensation only for personal injury which includes both
psychological and physiological injury.
An injury to the workmen’s dog, cattle or chattel, etc., doesn’t entitle the workmen to claim
compensation. For e.g., nervous shock causing incapacity to the work or a broken limb.
• Intentional injury: Any injury which is not designed by the workmen himself. The injury is designed and
intended by the other person. E.g., Death of a workmen caused by dacoits while he was on duty.
• Accident: An event which is not expected or designed by the injured workmen himself even though there
may be negligence. The term accident includes collusions, falling over obstacles, fall from roof, attach of
others, etc.
31. Accident arising out of, in the course of employment
• In the course of the employment
The workmen, at the time of accident must be in the process of during something in discharge of his duty.
The employment commences when the workmen reaches his place of the work and ceases when he leaves
the place. Normally, the working hours are from 10 A.M. to 6 P.M. So, the employment extends from
10A.M. to 6 P.M.
Exceptions to this rule
✦ In case of transport is provided by the employer for the purpose of going to and from the place of work and
a workmen uses such transport, then the time during which that transport is used by the workmen, is also
included in the course of the employment.
✦ When a workmen is in the premises of the employer, even though he may not be actually working at that
time, the time is included in the course of the employment.
✦ If a workmen uses a way which forms part of employee’s premises, which has to be crossed while going to or
coming back from his work, he is deemed to be on his employer’s work.
✦ The period of rest granted to a workmen is also included in the course of the employment. However, he
should remain in the employer’s premises during the rest period. E.g., meeting with an accident while
drinking the water or eating, etc.
✦ If a workmen reaches the place of the employment well in time and not too early before his employment
begins or if he is doing something to equip himself for the work, then he is in the course of the
employment.
• Out of the employment
It includes a casual connection between the accident and the employment. The workmen should be doing
something in discharge of his duties to the employer either directly or indirectly.
The term ‘employment’ has a wider meaning than the term ‘work’. It means, when an employee doing
something in the course of discharge of his duties to his employer and also when he is engaged in an act
arising out of it.
32. Theory of national extension
This theory was laid down by the Supreme Court in SNAREBAIA Sail Manufacturing Company Vs. Bai Volo
Raju. According to this theory, under certain circumstances, an employer is liable for injuries to his workmen,
even when he is away from the premises at the time of accident.
• The area which the workmen passes and repossess in going to and in leaving the actual place of the work is
included;
• A personal injury caused to the employee by the accident in a public place during the course of discharging
his duties to the employer, becomes an accident in the course of his employment.
Thus, the theory of National Extension of the Employer’s premises doesn’t extend to the whole of the journey
between a workmen’s residence and the place of work, but only to places where the workmen does the work
of the employer.
National Iron and Steel Co. Vs. Manorama Dass: A boy was retaining to the factory canteen after serving a tea to
certain persons in the factory. He was struck by a bullet and died. It was held that, the accident was arising
out of and in the course of his employment.
33. Occupational diseases
Usually workers employed in certain occupations are exposed to certain diseases which are normal in those
occupations such diseases are called ‘Occupational Diseases’.
An occupational diseases are deemed to be an injury by accident and is deemed to have arisen out of and in
the course of employment. Therefore, an employer is liable to pay compensation. The employer is also
responsible for the death of a workmen, then the death is deemed to have arisen out of employment.
The employer is liable to pay compensation only in the following 3 cases:
✦ any diseases specified in Part-A of the Schedule III of the Act as occupational disease peculiar to that
employment;
✦ if a workmen contracts any disease specified in Part-B of the Schedule III, as an occupational disease
peculiar to that employment, while he is in service for a continuous period of not less than 6 months;
✦ if any workmen in the service of one or more employers in any employment specified in Part-C of the
Schedule III for a continuous period as specified, contracts any occupational disease.
In the case of more than one employer, proportionate compensate is payable by all the employers.
The right of compensation is not available, if workmen has instituted a civil suit for damages in respect of the
injury. Similarly, a civil suit will not be entertained, if he has already instituted a claim for compensation under
this Act.
A workmen is entitled to receive compensation from the employer, if he gets an occupational disease even
after the discontinuation from service under the following conditions:
• he had contracted on occupational diseases;
• the workmen has served the employer for a continuous period of 6 months;
• such disease must have arisen out of the employment.
34.Remedies to claim a compensation
In case of an injury caused by an accident, a workmen has the following alternative remedies:
✦ he can claim compensation under the Workmen Compensation Act, or
✦ he can claim damages in the torts, or
✦ he can claim compensation under the Employer’s Liability Act.
As per Sec. 3(5), a workmen can’t claim compensation in respect of any injury if he has already instituted a
civil proceedings for damages in respect of the same injury against the employer or any other person;
Similarly, a workmen can’t file any suit for damages in any court of law in respect of any injury in the following
two circumstances:
• if such workmen has made a claim to the compensation in respect of such injury before the workmen
compensation commissioner, or
• if compensation amount is respect of the injury has been settled by an agreement between the workmen
and the employer.
As per Sec. 3(5), there is a bar on the workmen to claim compensation twice for the same injury. Even if a
workmen has brought an unsuccessful claim against the employer, he is debarred from making any alternative
claim in respect of the same injury.
Although alternative remedies are available to a workmen, he can’t have the best of both the remedies. Thus
law protects the employer against double payment and also against double proceedings.
35. Procedure of claiming compensation
Notice: The compensation is entertained by the commissioner, only if the notice of the accident has been
given in writing by the workmen in the following manner:
• The notice of the accident must be given after the accident as soon as practicable.
• The notice must give the name and address of the workmen injured and state the causes of such injury and
date of such injury.
• The notice must be given to the employer or any other person responsible for the management.
• The notice may be served by delivery or sending it by Registered Post to the residence or office or place of
business.
• The State Government may require any prescribed class of employers to maintain at the place of
employment, a register of accidents. It should accessible to any injured employee at any time.
• Any defect or irregularities in notice or commission to give a notice is not a bar to entertain a claim in the
cases:
✦ if death of workmen resulting from an accident which happens in the employer’s premises;
✦ if the employer had the knowledge of the accident from any other source about the time when it
occurred;
✦ if the commissioner is satisfied that the failure to give notice was due to sufficient reasons.
Benishdbar Vs. Ramachandra: The victim was continuously in the Hospital for 2 months and the notice
was given to the employer, 2 months after the accident. It was nevertheless held that, the notice was given as
soon as practicable.
Claim: A claim for compensation to the commissioner must be preferred within 2 years of the occurrence of
the accident. The commissioner may decide any claim to the compensation though the notice was not given
or the failure to give notice was due to the sufficient cause.
If the accident is contracting of an occupational disease, the accident is deemed to have occurred on the first
day during which the workmen was continuously absent from the work as a result of the disablement caused
by the disease.
In the case of partial disablement due to the contracting of such disease, the period of 2 years is counted from
the day - the workmen gives notice of his disablement.
If a workmen employed for a continuous period ceases to be so employed and develops symptoms of an
occupational diseases within 2 years of the cessation of the employment, the accident is deemed to have
occurred on the day when the symptoms were first detected.
A claim compensation can be continued by the heirs of the deceased workmen who died after making a claim.
36.Powers of the commissioner
• A commissioner has the power to decide and settle all the questions as to the liability of any person to pay
compensation.
• In case, the parties fail to agree to arrive at a compensation amount, then the commissioner has jurisdiction
to decide -
✦ the question as to whether a person injured is a workmen;
✦ the liability of any person to pay compensation;
✦ the amount and duration of compensation;
✦ the nature and extent of disablement;
✦ the commissioner acting under the Workmen’s Compensation Act is a Tribunal and not a Civil Court.
• The commissioner is authorised to exercise powers under the Civil Procedure Code, 1908 for the following
purposes:
✦ enforcing the attendance of any person and examining him on oath;
✦ compelling to production of any documents;
✦ issuing commission for examining the witnesses.
The Employee’s State Insurance Act, 1948
37. Benefits under the ESI Act
The Act provides for 6 types of the benefits to which the insured persons, their dependants and certain other
entitled persons.
Sickness benefit: An insured person is entitled to claim sickness benefit, if he had paid contribution for a
period of not less than 13 weeks. For sickness occurring during the first benefit period, he can claim sickness
benefit if he had paid for half the number of weeks of the contribution period ending in that period. For
example, more than 26 weeks in the one year period.
A daily appointed medical practitioner must certify that, the insured person is suffering from the sickness.
The sickness benefit is calculated by a ratio between average daily wages and the contribution period.
Sickness benefit is not payable for more than 56 days in any two consecutive benefit periods. The following
conditions must be complied with to entitle a sickness benefit:
✦ The person must be under medical treatment at the hospital or institution provided under the Act and
must carry out the instructions given by the medical officer.
✦ During the treatment, he must not do anything which might reduce his chances of recovery.
✦ He should not leave the area without the permission of the medical officer.
✦ He must allow himself to be examined by any duly appointed officer authorised by the corporation.
Maternity benefit: An insured women can get maternity benefit in case of miscarriage, confinement,
sickness due to the pregnancy and for premature birth of a child. However, such payment must be certified by
an Insurance Medical Officer as provided by the regulations of the Act.
However, she should have paid weekly contributions for not less than 13 weeks. All other rules are similar to
the rules in sickness benefit except that her standard benefit will be doubled.
Disablement benefit: Disablement benefit is payable to the insured person if -
• he suffers from disablement;
• the disablement results from an employment injury;
• he sustained the employment injury as on employee under the conditions mentioned in the Act.
The disablement benefit is payable only when the injury is duly certified by an Insurance Medical Officer. The
employment injury means that, the injury must have arisen in the course of the employment or out of his
employment. It may be by an accident or occupational disease.
Dependents’ benefit: If the insured worker dies, the dependant benefit is payable at the full rate to the
widow and children as follows:
• The dependant benefit is payable to the widow during her life or until her remarriage. The amount is
equivalent to 3/5 of the full rate. If there are 2 or more widows, the amount is equally divided among
themselves.
The widows mother also entitled to the benefit in the same manner as the insured worker’s widow.
• The dependant’s benefit is also payable to each legitimate or adopted son. The amount being equivalent to
2/5th of the full rate until the son attains 18 years of the age.
• The dependant benefit is payable to each legitimate or adopted unmarried daughter, the amount being
equivalent to the 2/5th of the full rate until such daughter attains 18 years of the age or her marriage
whichever is earlier.
If he total of the dependant’s benefit so distributed exceeds the full rate, the share of each dependant is
proportionately reduced, so that the total amount payable doesn’t exceed the dependant’s benefit at full rate.
The other dependant’s i.e., parents, grand parents, etc., can get the benefit, only if they are financially
dependant on the worker.
Medical benefit: If an insured person or any member of his family requires medical treatment, then medical
benefit is give. It may be given either in the form of out-patient treatment or as in-patient in the hospital.
The insured person is entitled to medical benefit during any week in which contributions are payable.
Funeral benefit: The eldest surviving member of the family of an insured person who has died is entitled to
receive certain amount towards the funeral expenditure of the deceased insured person.
The maximum benefit and the claim must be applied in within 3 months from the date of the death of the
insured person.
38. Rules regarding contribution
• The contribution under the Act means both employer’s and employees’ contribution.
• The rate of the employer and employee is as specified in the Table under the Schedule I.
• The contribution becomes due on the last day of the week.
• The employer’s contribution arises to all directly working employees or working through immediate
employers.
• The contribution of employee may be deducted from his wages, but the expenses of remitting the
contribution to the Govt must be met by the employer.
• If an employee earns a particular wage prescribed by the Central Govt per day, he is not required to make
any contribution but is entitled to all the benefits occurring under the Act.
• If the employee has worked only for a portion of the week, then the employer must pay his full
contribution as well as the employees’ contribution, for the full week, though he can recover the
proportionate employee’s contribution from his wages
• Employer must submit returns with prescribed particulars to the Corporation. He must also maintain
registers and records as required by the regulations of the Act.
• The Corporation may make regulations for payments and collections of the contribution payable under this
Act.
39.Purpose of the ESI Fund
The fund money may be used for the following purposes:
✦ Payment of the benefit and medical treatment of the insured persons and their families;
✦ Payment of the fees and other allowances to the members of the Corporation, Standing Committee,
Medical Benefit Council, etc.;
✦ Payment of the salaries, leave allowances, travelling and compensation allowances, gratuities to the officers
and servants of the Corporation;
✦ Establishment and maintenance of hospitals and dispensaries for the benefit of insured persons and their
family members;
✦ Payment of contribution to State Govt., Local Authorities or Private Body or individual towards the cost of
the medical treatment and attendance provided to the insured persons and their families;
✦ Meeting the expenses of auditing the accounts of the Corporation and the valuation of its assets and
liabilities;
✦ Meeting the cost of expenses in the Insurance Courts;
✦ Payment of money under any contract entered in to /by the Corporation;
✦ Payment of money under any decree, order or award by any Court or Tribunal;
✦ To meet the expenses and other charges of instituting or defending any Civil or Criminal proceedings
arising out of any action taken under this Act;
✦ Such other authorised purposes.
40.The Minimum Wages Act, 1948
Minimum wages means the wages fixed by the Government on the basis of the cost of living index for
providing the worker the basic necessaries of the life. The Government has the power to fix the minimum
rates of wages to the employment by the notification.
The minimum wages can be fix whole state or any part of the State. The revision of such minimum wages are
also made by the Government at intervals not exceeding 5 years.
In case, Govt not revised within 5 years, then the originally fixed minimum wages will continue even after 5
years till a revision is made. The Govt will not fix the minimum wage, when a total number of employees in
particular employment is less than 1,000/- in the whole State.
However, if the number of employees raises to 1,000/- then the Government will fix the minimum rates.
Types of minimum wages
• Time Rate: Minimum rates are fixed for every hour of work if time is the basis of such work.
• Piece Rate: If the work is continuous work, then the minimum wages are fixed for the unit of such piece
of work.
• Time cum Piece Work: If time and piece work are combined in a particular work, then both are taken
together for fixing the minimum wages.
• Over Time Wages: When a worker does any extra or overtime work, then the minimum wage for such
extra or overtime work is different and usually greater than the minimum wages for ordinary work.
Mode of fixing minimum wages
• Generally, month is taken as a unit for fixing the minimum wages.
• The basic wage and the special allowances must be proportionate to the cost of living index.
• The basic wage means the minimum wage fixed on the cost of living index and special allowance and cash
value of the concessions or perquisites.
• The financial capacity of the employer, the loss in the business, the loss of profit in the past years, the
difficulties in importing the raw materials, the locality of the industry are all irrelevant factors for fixing the
minimum wages.
• The wages paid in the similar industry, same locality, local price level of essential commodities, the nature
of work, etc., are relevant factors to fixing the minimum wages.
• The payment of minimum wages may be by way of cash or partly by cash and partly by perquisites.
• The legal deductions are always allowed in the minimum wages.
• The minimum wages is independent of the kind of industry and it applies to all the industries - big, small or
alike.
It sets the lowest limit below which wages can’t be allowed to go down.
Procedure for fixing and revision of minimum wages, Sec. 5
In fixing the minimum rates of wages in an scheduled employment for the first time or in revising minimum
rates of wages so fixed, the Appropriate Government follow either of the following 2 methods:
✦ appointment of Committee and Sub-Committee to hold enquiries and advice in such fixation or revision.
✦ by publishing a notification in its official notification of its proposals for the information of persons likely
to be affected thereby.
• It also specifies a date on which the proposals will be taken in to consideration. The specified date should
not less than 2 months from the date of the notification.
• After considering the advice of the Committee or Committees or all the representation received by it
before the date specified in the notification, the Appropriate Government fixes or revises the minimum
rates of wages by the notification in the Official Gazette.
• The Government also consult with the Advisory Board.
• The Committees appointed is only an advisory body and the Government is not bound to accept its
recommendations in every case.
• The Committee, Sub-Committee and the Advisory Board consists of persons nominated by the
Appropriate Government representing employers and employees in the scheduled employments.
Wages, Sec. 2(h) of the Minimum Wages Act, 1948
Wages means, all remuneration, capable of being expressed in the terms of money which become payable to
an employed person for the work done in his employment, provided the terms of the contract of employment
are fulfilled.
It includes House Rent Allowance, but doesn’t include:
✦ Value of any house accommodation, supply of water, light, medical attendance,
✦ Any other amenity or any service excluded by general or special order of the Appropriate Government,
✦ Any contribution said by the employer to any Person Fund or Provident Fund or under any scheme of social
insurance,
✦ Any travelling allowance or the value of any travelling concession,
✦ Any sum paid to the person employed to pay special expenses,
✦ Any gratuity payable on discharge.
Claims under the Minimum Wages Act, 1948
Application: The following persons may apply to the authority for hearing and deciding the case, when an
employee has any claims:
• the employee himself;
• any legal practitioners;
• any official of a registered Trade Union acting on his behalf;
• any Inspector; or
• any person acting with the permission of the Authority.
The application should be presented within 6 months from the date of an which the minimum wages or other
amount is payable. For sufficient cause, the application may be permitted after 6 months.
The limitation period in the Minimum Wages Act is not controlled by the Limitation Act, 1963 and the
authority has the discretionary power in this regard.
After giving the opportunity of being heard, to both the parties the Authority may direct the payment of
compensation in the following ways:
✦ For claim due to payment of less than minimum rate of wages: The difference between the
minimum wage and actual wage along with compensation not exceeding 10 times of such excess.
✦ For other cases: Payment of the amount due to the employee alone with the compensation of not
exceeding Rs. 10/-
The authority has all the powers of a Civil Court.
41. The Employee’s Provident Funds & Miscellaneous Provisions Act, 1952
Scope
• The Act enables the workers to get some lumps money at the time of retirement, depending on his earning
capacity.
• Employer and employee both will contribute equal percentage on Basic Wages and Dearness Allowance
including the cash value of food concession allowed.
The present percentage of contribution is 12%.
• The employer can contribute in higher rate.
• PF amount can;t be attached either by the Court Order or otherwise. It is totally protected amount and
fully guaranteed payment to the employees.
• Employer has no right to directly or indirectly deduct any other amount due to the employee to
compensate the PF contribution paid by him towards the fund.
Employee’s Pension Fund Scheme, Sec. 6-A
✦ This is new section introduced. As per the Section, the Employee’s Pension Scheme has been introduced.
✦ 8.33% of the employers contribution is diverted in to pension fund. The remaining 3.33% of the employers
contributed is added to PF account.
The Govt will contribute 1.16% of the monthly salary of the employee to the pension fund.
✦ Eligibility to monthly pension
• Employee’s renders a 20 years or more service period and attains the age of the retirement;
• Employee’s renders 1 20 years or more service period and retire or ceases to be employment before
attaining the age of 58 years.
• Short service pension: rendered eligible service of 10 years or more but less than 20 years.
Benefit to the family
On the death of member, his family is entitled to family pension, monthly widow pension and monthly
children / orphan pension.
Disbursement of pension and other benefits
The PF Commissioner makes arrangements for the disbursement of pension and other benefits with
disbursing agents like Post Offices, or Nationalised Banks or Treasuries.
42.The Maternity Benefit Act, 1961
The object of this Act is to regulate the employment of women in certain establishments for certain periods
before and after child birth. It further provides for maternity benefit and other benefit.
The Act applies to any factory, mine or plantation including any establishment of the Government. However,
the Act is not applicable in a limited way, only to women employees in a factory or establishment covered by
the ESI Act, 1948.
The Act prohibits the employer from employing or permitting a pregnant women to work in any
establishment during the 6 weeks following her delivery or mis-carriage.
The pregnant women should not given any hard work, work involving long hours of standing or work which
interfere with her pregnancy or which may lead to miscarriage or ill health, for one month immediately
preceding the 6 months before the date of expected delivery.
Maternity benefit
✦ Every women is entitled to maternity benefit of 6 weeks before the delivery and 6 weeks after the delivery.
✦ The rate of benefit = 3 months average salary or Re. 1 per day whichever is higher. Average salary shall be
average of the wage during the 3 months preceding such absence.
✦ A women is eligible to maternity benefit only if she has actually worked for not less than 160 days during
the 15 months preceding the date of her expected delivery.
✦ The maximum period of maternity benefit is fixed 12 weeks. If women dies during this period, the
maternity benefit will be confined up to the date of her death.
✦ If she dies after delivering the child, then the maternity benefit continuous for the entire period, if the
child also dies, then the benefit will be extend to the date of death of the child.
✦ Every women is entitled to payment of maternity benefit under this Act in addition to the benefits under
ESI Act, 1948.
Notice of claim of maternity benefit, Sec. 6
A women is entitled to maternity benefit may give notice to her employer, claiming the amount and giving
date of availing of the leave.
The employer must permit her absence till the expiry of the 6 weeks after delivery. Further, he is bound to
pay maternity benefit amount in advance for the period before the delivery on the proof of pregnancy.
The amount towards the subsequent 6 weeks must be paid within 48 hours of the production of proof that
she has delivered a child.
(*) In case of mis-carriage, women is entitled to leave with wages at the rate of maternity benefit for a period
of 6 weeks immediately following the day of her mis-carriage.
(*) A women is entitled to leave for one month over and above the maternity benefit on the proof of illness
due to pregnancy, delivery, premature birth or mis-carriage.
(*) The Act prohibits the employer from discharging or dismissing a women worker due to her absence due to
pregnancy, such dismissal or discharge doesn’t deprive the women of her right to maternity benefit and medial
bonus.
43.The Industrial Employment (Standing Orders) Act, 1946
This Act requires the employers to define the conditions of service in their establishments and get them
compulsory certified with a view to avoid unnecessary industrial disputes.
Application of the Act
The Act applies to every industrial establishment, employing 100 or more workmen's on any day of the
preceding 12 months.
Standing Orders
The term ‘Standing Orders’ means - the rules relating to the matters set-out in the Schedule of this Act. As
per the Schedule, the following matters should be provided in the Standing Order:
• Classification of workmen's - Permanent, temporary, apprentice, probationary or badlis;
• Period and hours of working, wage rate and pay days;
• Shift working’
• Attendance and late coming;
• Conditions for grant leave and holidays;
• Requirement to enter premises by certain gate and liability to search;
• Closing and re-opening of sections of the industrial undertakings;
• Stopping of work and right and liabilities of the employer and workmen arising there from;
• Termination of service and notice thereof to be given by employers and workmen;
• Suspension or dismissal for misconduct;
• Act or omissions which constitute misconduct;
• Any other matter.
(*) Within 6 months from the date of applicability of this Act, the employer must submit to the certifying
officer, 5 copies of Draft Standing Order.
(*) It must make provisions for every matter.
(*) A statement which contains the particulars of the workmen, the name of Trade Union if any, etc., along
with the draft standing order.
(*) A group of employers in similar industrial establishment may submit joint draft of standing order.
Certification of Standing Order
✦ Forward a copy of the draft to trade union or to the workmen.
✦ Trade union or workmen required to submit their objections within 15 days from the notice.
✦ Opportunity of being heard given to the both, employer and workmen.
✦ Grant certificate within 7 days from the certification of the draft orders.

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Labour Laws 28 August 2016

Shiva Shankara R Shetty is an

He also possess expert

3. Labour policy in India

• cooperation for increasing the ‘production’ and ‘productivity’.

• adequate labour legislation and their enforcement;

• enhancing the worker status in the industry;

• maintenance of industrial peace;

• ensuring the fare wage standards and provisions of social security;

• encouragement to the mutual settlement, collective bargaining and voluntary arbitration;

• consultation between employer, employee and Government.

4. Principles of labour legislation

Industrial Disputes Act, 1947

5. Objectives of the Act

✦ To bring and maintain industrial peace and economic justice in industries,

✦ To render economic justice to the workmen by settlement of industrial disputes.

6. Salient features of the Industrial Disputes Act, 1947

• The Act prohibits the strikes and lock-outs -

✦ during the pendency of any conciliation or adjudication proceedings,

✦ during the course of settlements,

✦ during the pendency of awards of Industrial Tribunals.

• Eﬀective enforcement of the provisions of the Industrial Disputes Act,

✦ agricultural operation, which is carried on as the main activity,

✦ educational, scientific, research or training institutions,

✦ institutions engage in any charitable, social or philanthropic services,

✦ khadi or village industries,

✦ any activity of the Government as sovereign function,

✦ any domestic services,

✦ any professional services, employees being less than 10,

• spiritual or religious service,

• restricted category of clubs, cooperatives, research labs and gurukulas,

• free legal or medical services on honorarium basis.

✦ if there is a systematic activity;

✦ if organised by cooperation between employer and employees, and

9. Important decided case laws

✦ if it satisfies the ‘Triple Test Rule’, then it is an industry.

✦ the ownership may be public, private, joint or other sector,

✦ profit motive is irrelevant,

✦ there must be employer and employee relationship,

• research institution; and

10. Industrial dispute

Industrial dispute means any dispute of diﬀerence between:

• Employers and employees, or

• Employers and workmen, or

• Workmen and workmen,

which connected with -

✦ the employment, non-employment, the terms of the employment, or

✦ the conditions of labour of any person.

✦ The term ‘industrial’ relates only to industry and its disputes,

Types of Industrial Dispute

A collective dispute may be relates to any of the following matters:

✦ wages, bonus, profit sharing, gratuity, compensation and other allowances;

✦ working hours, leave with wages, holidays;

✦ rules of discipline, retrenchment of workmen, closure of establishment and nationalisation.

All collective disputes are individual disputes.

• Deemed industrial dispute: The dismissal of an individual workmen is deemed to be an industrial

There are 2 types:

✦ who is employed in the police service or as an oﬃcer or other employee of a prison; or

✦ who is employed mainly in a managerial or administrative capacity; or

Essentials of the workmen

• There must be a employee and employer relationship.

• The workmen should be employed to do the work in an industry.

Difference between workmen and independent contractor