Case List | End Sems

STRIKES AND LOCKOUTS

1. Indian Railway Navigation Co. v. Its Workmen
It was held that in order to entitle the workmen to wages for the period of strike, the strike should be
legal and justified. A strike is legal if it does not violate any provision of the statute. It can’t be said to
be unjustified unless the reasons for it are entirely perverse or unreasonable. Whether particular strike
is justified or not is a question of fact, which has to be judged in light of the fact and circumstances
of the case. The use of force, coercion, violence or acts of sabotage resorted to by the workmen
during the strike period which was legal and justified would disentitle them to wages for strike period.

2. Madura Coats v. Inspector of Factories

The workmen went on strike without serving a notice under S. 22. They claimed wages for a national
holiday which fell during the strike period. The SC held that they were not entitled to wages because
they themselves had brought about a situation by going into strike without giving notice whereby the
management was deprived of its right to take work from them.

3. Umesh Naik v. Syndicate Bank

Whether workmen who proceed on strike, whether legal or illegal, are entitled to wages for the period
of strike? In Churakulam Tea Estate and Crompton Graves case, the view taken is that strike must be
legal and justified for workmen to be entitled to wages for the strike period whereas Bank of India v.
Kelawala held that they are not entitled to wages regardless of legality. The instant case held that
there is no actual conflict between these views.
SC resolving the conflict in this case held that the cessation or stoppage of work whether by the
employees or by the employer is detrimental to the production and economy and to the well being of
the society as a whole. It is for this reason that the industrial legislation while not denying the right of
workmen to strike, has tried to regulate it along with the right of the employer to lock out and has
also provided a machinery to resolve the dispute, resort to strike or lock out as a direct action is
prima facie unjustified and if done in breach of rules will be illegal. The justness or otherwise of the
action of the employer or the employee has therefore to be examined also on the anvil of the
interests of the society which such action tends to affect.
Strikes should be legal and justified for entitlement to wages for strike period. Whether strike legal or
justified is question of fact to be decided on evidence by industrial adjudicator. Just a legal strike (not
justified) exempts only from legal action. Legal strike does not give right to claim for wages. Workers
remaining absent from working cannot claim wages as a matter of right.

4. Crompton Greaves v. Its Workmen

Identical to Railways case

LAY OFF & RETRENCHMENT

5. Hariprasad v. AD Divakar
Retrenchment is discharge of surplus labour for any reason whatsoever other than for punishment /
disciplinary action – no application if all workers are discharged due to closure or if the business is
overtaken by another employer

6. Bombay Union of Journalists v. State of Bombay

Appellant were appointed on the staff of the second respondent - retrenchment under section 3(2) of
the Working Journalists (Conditions of Services) and Miscellaneous Provisions Act, 1955 - salaries

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 the Working Journalists (Conditions of Services) and Miscellaneous Provisions Act, 1955 - salaries
paid in lieu of notice- conciliation proceedings failed - respondents refused to refer the matter to
Industrial Tribunal - construction of Sec 25F(c) of the Industrial Dispute Act sought
Issue No 1: Whether sec 25F(c) was a condition precedent to retrenchment?
Held that section 25F clause (c) cannot be held to be a condition precedent like clause (a) or (b) even
if it has been included in section 25F which prescribes condition precedent. It was further held that
unlike clause (a) or (b), clause (c) does not protect the interest of the workmen but is intended to
keep the government informed about conditions of employment in industries within its area.
Therefore failure to serve notice to the govt will not invalidate the retrenchment.
Issue 2:Can it be said that the appropriate Government is bound to refer an industrial dispute even
though one of the points raised in the dispute is in regard to the contravention of a mandatory
provision of the Act?
The answer to this question cannot be in the affirmative. Even if the employer retrenches the
workman contrary to the provisions of s. 25F(c), it does not follow that a dispute resulting from such
retrenchment must necessarily be referred for industrial adjudication. The breach of section 25F is no
doubt a serious matter and normally the appropriate Government would refer a dispute of this kind
for industrial adjudication; but the provision contained in s. 10(1) read with s. 12(5) clearly shows that
even where a breach of s. 25F is alleged, the appropriate Government may have to consider the
expediency of making a reference and if after considering all the relevant fact the appropriate
Government comes to the conclusion that it would be inexpedient to make the reference, it would be
competent to it to refuse to make such a reference.
Issue 3: Can the government make prima facie assessment of merits before reference of dispute
under section 10?
It is true that if the dispute in question raise questions of law, the appropriate Government should
not purport to reach a final decision on the said questions of law or disputed questions of fact,
because that would normally lie within the jurisdiction of the Industrial Tribunal. But Appropriate
Government is not precluded from considering even prima facie the merits of the dispute when it
decides the question as to whether its power to make a reference should be exercised under s. 10(1)
read with s. 12(5), or not. If the claim made is patently frivolous, or is clearly belated, the appropriate
Government may refuse to make a reference. Likewise, if the impact of the claim on the general
relations between the employer and the employees in the region is likely to be adverse, the
appropriate Government may take that into account in deciding whether a reference should be made
or not. It must, therefore be held that a prima facie examination of the merits cannot be said to be
foreign to the enquiry which the appropriate Government is entitled to make in dealing with a
dispute under s. 10(1)

7. Neeta Kaplesh v. Presiding Officer, Labour Court

The-appellant was working as a clerk was charge-sheeted, a domestic enquiry conducted and was
dismissed on the basis of enquiry report.
Appellant had questioned the domestic enquiry on a number of grounds including that her own
answers were not correctly and completely recorded and that the Enquiry Officer was not impartial
and was biased in favour of the respondent. It was further contended that her own witnesses were
not called and she was not given the opportunity to lead evidence.
Management argued that under Section 11A, the Labour Court had to rely on the "materials on
record" and since that enquiry proceedings constituted "material on record", the same could not be
ignored and LC court not order fresh evidence.
SC rejected the argument. Held: Labour court was right in rejecting the evidence already recorded for
being violative of natural justice and correctly asked management to adduce fresh evidence to justify
its action. The record pertaining to the domestic enquiry would not constitute "fresh evidence" as
those proceedings have already been found by the Labour Court to be defective for violation of
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 those proceedings have already been found by the Labour Court to be defective for violation of
natural justice and not being just and proper. Such record would also not constitute "material on
record" within the meaning of Section 11A as the enquiry proceedings, on being found to be bad,
have to be ignored altogether.
The domestic enquiry was not properly and fairly held and an effective opportunity of hearing was
not given to the appellant, the Labour Court was right in calling upon the Management to lead fresh
evidence. In view of the nature of objections raised by the appellant, the record of enquiry held by
the Management ceased to be "material on record" within the meaning of Section 11A of the Act and
the only course open to the Management was to justify its action by leading fresh evidence as
required by the Labour Court. If such evidence has not been led, the Management has to suffer the
consequences.

8. Lal Mohd. v. Indian Railway Construction Company

Indian Railway Construction Company had employed these 23 appellants in a project of construction
of railway line of 54 KMs known as Rihand Nagar Project and given work such as clerks, account
clerks, store clerks, store cashier, non-technical supervisors, site supervisors etc. The petitioners
contended that they were appointed in the service of the Respondent company and were drafted to
work in the Rihand Nagar project in the Rihand area at different sites. It is their contention that
initially they were required to undertake training and were, therefore, treated as appointed on ad-hoc
basis. Subsequently they were wrongfully not made regular employees of the Respondent Company
though they were placed on regular time scale as such.
They were given retrenchment notices after the Rihand Project was over on ground of there was no
other work available for the employees concerned on this project or any other project of the
company and they were rendered surplus and they were offered retrenchment compensation as per
section 25F.
They challenged these notices. SC held that: respondent is industrial establishment and falls within
definition of factory for purpose of applicability of Section 25N (sec 25F did not apply here). Section
25N applies as per section 25L if section 2(m) (definition of factories) of Factories act is satisfied.
Held–It satisfied the definition of factory under section 2 (m) of factories act 1948.
Whether the project in question can be treated to be a 'factory', the following requirements of the
definition have to be fulfilled:
(i) In the premises, including the precincts thereof, ten or more workmen must be working where
manufacturing process is carried out with the aid of power, or
(ii) where twenty or more workmen must be working at the relevant time and in any part of such
premises manufacturing process is being carried on without the aid of power; or
(iii) In any case manufacturing process must be carried on in any part of the premises;
Here around 100 workers were working. Therefore, the remaining (iii) requirement for applicability
of the definition of the term 'factory' which becomes relevant is whether any 'manufacturing process'
was being carried on in the premises or any part thereof. Consideration of this aspect will require
fulfilment of twin conditions, namely, i) whether the project was having any 'premises' where the
work was being carried on by these workmen; ii) whether the work which was carried on by them
amounted to a 'manufacturing process'.
1. It has fixed premises because: "premises" not only covers building but even open land can also be
a part of premises. It is easy to visualize that when railway line is to be constructed over an area of 54
KMs, it cannot be constructed overnight. The whole exercise would be carried out in a phased
manner. Construction of railway line would necessarily imply fixed sites on which such construction
activity gets carried on in a phased manner. Every time when such construction activity is carried on
it must necessarily be on a given fixed site where all the workmen concerned would work for the
purpose of laying down railway line at that site. Thus, even though the railway line is to be laid over
54 KMs. of land every part of the said land would consist of a 'factory' at a given point of time as
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 54 KMs. of land every part of the said land would consist of a 'factory' at a given point of time as
from time to time in a phased manner entire railway line will have to be laid. 2. It also constitutes
manufacturing because, process of construction of railway line amounted to ‘adapting any article or
substance with a view to its use’ under section 2(k) of factories act defining manufacturing process.
Thus impugned retrenchment notice issued without following conditions precedent to retrenchment
of workmen as required by Section 25N (which is attracted here) - impugned notice should be treated
as void and illegal.

9. Workmen of Meenakshi Mills v. Meenakshi Mills

Sec 25N - restrictions on retrenchment - public interest - Article 19(1)(g)
S. 25N of ID Act’s validity was challenged. Employer proposing retrenchment of workman who feels
aggrieved by Order refusing permission for retrenchment under S. 25N (2) can also move for
reference for such dispute relating to proposed retrenchment for adjudication under S.10 though
possibility of such reference would be equally remote. Employer who feels aggrieved by Order
refusing permission for retrenchment stands on same footing as workmen feeling aggrieved by Order
granting permission for retrenchment under S. 25N (2) in as much as it is permissible for both to
raise industrial dispute which may be referred for adjudication by appropriate Government. It can’t
be said that as compared to workmen employer suffers from disadvantage in matter of raising ID and
having it referred for adjudication. S. 25N is not unconstitutional.

10. Excel Wear case

Constitutional Validity of Section 25-O and 25-R challenged. Section 25-O required that permission
be taken from the government before closing down an industrial establishment. SC held that Section
25-O violates Article 19 (1) (g) and thus invalid - Section 25-R in so far as it relates to awarding of
punishment for infraction of Section 25-O invalid.
It negatived a submission that a right to close down a business was not a fundamental right and that
it was merely a right appurtenant to ownership of property. This Court held that the right to close
down a business was an integral part of the fundamental right to carry on business as guaranteed
under Article 19(1)(g) of the Constitution. It was held that there could be a reasonable restriction on
this right under Article 19(6) of the Constitution. It was held that the law could provide to deter
reckless, unfair, unjust and mala fide closure. The following reasons were given:
(i) Section 25-O did not require giving of reasons in the order. Thus the order could be whimsical
and capricious.
(ii) No time limit was fixed whilst refusing permission to close down.
(iii) That there was no deemed provision for according approval in the Section. It was held that the
result would be that if the Government order was not communicated to the employer within 90 days,
civil liability under Section 25-O(5) could come into play on the expiry of period of 90 days.
(iv) The order passed by the authority was not subject to any scrutiny by any higher authority or
tribunal either in appeal or revision and the order could not be reviewed even after some time.
(v) The employer was compelled to resort to the provision of Section 25-N even after approval of
closure.
(vi) The restriction imposed was more excessive than was necessary for the achievement of the object
and thus highly unreasonable. It was suggested that there could be several other methods to regulate
and restrict the right of closure e.g. by providing for extra compensation over and above the
retrenchment compensation.
This case led to amendment of 25-O to make it constitutional

11. Orissa Textiles and Steels v. State of Orissa

This case considered the constitutionality of the new amended S. 25O. Held that the amendment
rectified both procedural and substantive defects and more akin to S. 25N, constitutional validity
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 rectified both procedural and substantive defects and more akin to S. 25N, constitutional validity
whereof upheld in Meenakshi Mills.
Amended S. 25O lays down guidelines which are to be followed by the appropriate Government in
granting or refusing permission to close down with regards to the genuineness and adequacy of the
reasons stated by the employer. Restrictions imposed are reasonable and in the interest of general
public. Amended S. 25O provides for enquiry after affording an opportunity of being heard and
provides that the order has to be a reasoned order in writing. Appropriate government exercising
quasi-judicial function cannot pass orders arbitrarily or whimsically. S. 25O is not ultra vires and
saved by Art. 19(6) of Constitution.

STANDING ORDERS
12. UP State Electricity Board v. Hari Shanker Jain
The SC includes the State Electricity Board within the scope of an industrial establishment under S.
2(e). The respondents were the workmen of a distribution company, which was acquired by the
UPSEB. The SO of the distribution company which was applicable to the workmen had no mention
about the age of superannuation. Rather than getting new SOs certified, the UPSEB followed the old
SOs to be operational. However, by virtue of S. 13B of the IESO, the Governor of the State notified
the retirement age for the employees of the Electricity Board. The respondents were accordingly
retired and it is the retirement that is assailed before the SC.
The SC held that the IESO is a special law dealing with matters enumerated in the schedule and
whereas the Electricity Supply Act under which there is a mention about the service conditions is a
general law. Therefore, the court held that the regulations made in accordance with the ES Act are
not effective unless such regulations are notified by the government under S. 13B or they are certified
by the certifying officer under S. 5 of IESO. As the service conditions in the present case are notified,
they prevail over SOs and retirement is valid. Court held S. 13B can’t be read to confine its
application to only government servants. It includes all persons so employed who have a similar
character of a public servant.

13. Workmen of Bharat Petroleum v. Bharat Petroleum

A provision as to age of retirement in the SO of an establishment would apply to all employees
whether they were employed subsequent to or prior to the coming into force of the SO.

14. BD Shetty v. CEAT - subsistence allowance under Sec 10A of the IE(SO) Act

Narendra v. State of UP

15. WB State Electricity Board v. Deshbandhu Ghosh

The SC held that any provision in the SO enabling the management to terminate the services of
permanent employees by giving three months notice or pay in lieu thereof, would be violative of Art.
14 of the Constitution. Such regulation was held to be capable of vicious discrimination and was
considered as naked ‘hire and fire rule’.

OP Bhandari v. Indian Tourism Dev Corp

Central Inland Water Transport Corp v. Brojonath Ganguly

SC reiterated the same law as Deshbandhu. It further added that this rule is not consistent with the
public policy, ignores audi alteram partem and is invalid under S. 23 of the ICA.

16. Delhi Transport Corp v. DTC Majdoor Congress

The SC held that the rules relating to termination of permanent employees by giving them notice or
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 The SC held that the rules relating to termination of permanent employees by giving them notice or
pay in lieu thereof, is arbitrary, uncanalised, restricted and violative of PNJ and also Art. 14. The
Court held that Regulation 9(b) of the Delhi Road Transport Authority Regulation, 1952 suffered
from the vice of arbitrariness as there was no guidance in regulations or in the act as to when or in
which cases and circumstances this power of paying notice can be exercised. The court further held
that this rule is violative of S. 23 of the ICA and opposed to public policy.

17. KC Sharma v. Delhi Stock Exchange

Sharma was terminated after giving 3 months notice as per terms of appointment. This was
challenged and the Delhi HC held that the termination was mala fide and illegal and directed
reinstatement. This was reversed by the Division Bench. The appellant filed an appeal before the
apex court whereupon it was held that the termination of service under the clause of letter of
appointment was illegal and the removal was mala fide. However, the totality of circumstances of the
case renders it improper to direct a reinstatement. So only the compensation was increased.

18. Western India Match Co v. Its Workmen

The SO indicates that the permanent employer is one who has completed the probation period of 2
months and is employed on a permanent post and a probationer is one who is employed to fill a
vacancy and who is yet to complete his 2 months period. The respondent was appointed on a
probation period of 6 months and his probation period was further extended, and later his services
were terminated. The issue was whether such termination was a valid one.
SC held that SO said probation wouldn’t be more than 2 months. Letter of appointment is therefore
inconsistent with the SO since it had 6 months probation. SO would prevail over the terms in the
contract of service in existence on the enforcement of SO. If a prior agreement inconsistent with SO
will not survive, an agreement posterior to and inconsistent with the SO should also not prevail.

19. Salem Distribution Co v. Its Workmen

The Certifying Officer and the appellate authority committed no error of law in refusing to certify
the modified Standing Orders. The Act provides a self contained code and the Certifying Officer is
given the power to consider questions of fairness and reasonableness as well as other questions
indicated by s. 4(a) and (b). An appeal is provided against the decision of the Certifying Officer and
in case a dispute arises as to the interpretation or the application of the Standing Order, a remedy is
provided In s. 13A. A Tight is given both to the employer and the workman to move the
appropriate authorities for modification of the existing Standing Orders.
It is clear from the provisions of the Act requiring industrial establishments to have their
Standing Orders certified that matters specified in the Schedule to the Act should be covered by
uniform Standing Orders applicable to all workmen employed in an industrial establishment.

Constitutional Validity of Automatic Termination under Standing Orders

20. DK Yadav v. JMA industries
SC held that the principles of natural justice are mandates of Art. 14 and 21. Therefore, the principles
must be read wherever the Standing Orders provide for automatic termination of service for absence
without leave.

21. Uptron India Ltd v. Its Workmen

Similar holding as DK Yadav. Any rule providing for automatic termination of service of the
workmen upon overstaying his leave as violative of PNJ as it does not provide an opportunity of
hearing to the employee.

Sudhir Chandra Sarkar v. TISCO – Certified Standing Orders are subject to the test of arbitrariness
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 Sudhir Chandra Sarkar v. TISCO – Certified Standing Orders are subject to the test of arbitrariness
under Art. 14.

22. Hindustan Paper Corp v. Purnendu Chakraborty – An employee absented from duty without
prior sanction for about six months by sending application for leave on medical grounds but not
supporting with medical certificates. SC held that it would be deemed that he had lost the lien on the
job when he failed to avail the opportunity in replying in a half hearted way and not reporting for
duty.

Punjab and Sind Bank v. Sakattar Singh – Termination of a bank employee absenting for 190 days
without holding an enquiry won’t violate principles of natural justice.

23. Syndicate Bank v. General Secretary, Syndicate Bank Staff Association – Termination of a
bank employee without holding of enquiry who absented for 582 days in a span of 628 days was held
to be justified when the management had complied with the Bipartite Settlement.

State of Bihar v. Kripa Shanker Jaiswal – S. 11 requires the conciliation officer to give notice before
entering the preises. In this case, it was contended that the settlement was illegal and not binding
because the conciliation officer did not give notice as required under S.11(2). SC held that the
purpose of notice was simply to appraise the management that it was the conciliation officer who was
coming and not a stranger and the absence of notice did not affect the jurisdiction of the officer.
Also, although the officer is required to submit his report within 14 days under S. 12(6), if the
conciliation proceedings went beyond 14 days and report was not sent within prescribed time, the
proceedings were still held valid. It may be a contravention of the officer’s duty under S. 12(6) but it
does not affect the legality of the proceedings.

Damodar Valley Corp. v. Its Members – Some employees of the corporation doing construction
work were paid construction allowance and the workers doing operational work were not being such
an allowance. On a reference of the dispute, the National Industrial Tribunal held that the employees
who are posted in the same station, some doing construction work and some operational work, both
will be entitled to construction allowance as employees doing similar work have to be treated and
paid uniformly. This was upheld by the SC.

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