CHAPTER 2

INDUSTRIAL RELATION AND REGULATION

2.1 INDUSTRIAL DISPUTE ACT 1947

A. Introduction
Industrial disputes Act, 1947 is the Act that regulates the labour laws as it concerns
all the workmen or all the people employed on the Indian mainland. It came into force
on 1 April 1947.
The capitalists or the employer and the workers always had a difference of opinion
and thus, it leads to lots of conflicts among and within both of these groups. So, these
issues brought to the attention of the government and so they decided to pass this act.
This act was formed with the main objective of bringing peace and harmony in
industrial disputes between parties and solving their issues in a peaceful manner. 

B. Scope and Object 

This is an Act made for the examination and settlement of industrial disputes, and for
different purposes too. This Act centres around any industry carried on by or under
the authority of the Central Government, or by a railway organization or concerning
any such controlled industry as might be indicated for this benefit by the Central
Government. 

C. Main features of the Act 

This Act furnishes us with specific guidelines and guidelines in regards to the works
committee for both the businesses and all the workmen to advance measures for good
working relations and comprehension among the workmen and the businesses later
on, and to end that, it additionally vows to resolve any material difference in views of
opinion in regard to such issues.

D. Definition of Industrial Dispute 

Industrial dispute implies any distinction of conclusion, contest, injury between the
business and the representatives, or between the labourers and bosses, or between the
labourers or workers itself which is all concerned with the work or non-business
terms or terms of business dependent on the terms of state of work of any person.

E. Workman
The expression “workman” signifies any individual (counting a student or apprentice)
who works in an industry who needs to do any manual, skilled/unskilled,
incompetent, specialized, operational, administrative, supervisory and so forth work
for contract or reward, regardless of whether the terms of business are communicated
or inferred, and for motivations behind any procedure under this Act in connection to
an industrial dispute, incorporates any person who has been expelled, released or
 saved regarding, or as an outcome of the case, or who’s rejection, release or
conservation has prompted that dispute, however, does exclude any such individual- 
 who is dependent upon the Air Force Act 1950, or the Army Act 1950, or
the Navy Act 1957;
 who is employed in the police administration or as an official or other
representative of a jail;
 who is employed primarily in an administrative or managerial limit.
An individual, being underemployment in a supervisory limit draws compensation
surpassing Rs. 10000 for every month or activities, either by the idea of the
obligations to the workplace or by reason of forces vested in him, works
fundamentally of an administrative sort. 

F. Wages [Sec. 2(rr)]

Wages mean all remuneration capable of being expressed in terms of money, which
would, if the terms of employment, express or implied were fulfilled, be payable to a
workman in respect of his employment or of the work done in such employment and
includes:
 Such allowances (including dearness allowance) as the workman is for the time
being entitled to;
 the value of any house accommodation, or of supply of light, water, medical
attendance or other amenity or of any service or of any concessional supply of
food grains or other articles;
 Any traveling concession. But the following are excluded:
o Any bonus
o Any contribution paid or payable to any pension fund or provident fund, or for
the benefit of the workman under any law for the time being in force.
o Any gratuity payable on the termination of his service.

G. Industrial Dispute Settlement Machineries

In view of this, the Industrial Disputes Act, 1947 provides for four major industrial
dispute settlement machinery:
1. Conciliation
2. Court of Inquiry
3. Voluntary Arbitration
4. Adjudication
 
1. Conciliation
Conciliation, a form of mediation refers to the act of making a passive and indirect effort
in order to bring two conflicting parties to a compromise. It is the “practice by which the
 services of a neutral party are used in a dispute as a means of helping the disputing
parties to reduce the extent of their differences and to arrive at an amicable settlement of
agreed solution.”

The conciliator or mediator tries to remove the difference between the parties by
persuading the parties to rethink over the matter with a give and take the approach but
does impose his or her own viewpoint. The conciliator is at liberty to change his or her
approach from case to case as he or she deems fit depending on other factors.

The Industrial Disputes Act, 1947 provides for conciliation, and can be utilised either by
the appointment of conciliation officers; permanently or for a limited period or via the
constitution of a board of conciliation.

This conciliation machinery is at liberty to either take note of the dispute or apprehend
dispute on its own or when approached by a party.

In order to expedite proceedings, time-limits have been prescribed.

 It is 14 days in the case of conciliation officers and 2 months for a board of
conciliation.
 The settlement so arrived upon during the course of conciliation is binding upon
the parties for the period that has been agreed upon by the parties or for the period
of 6 months.
It shall continue to be binding until revoked by either of the parties. During the pendency
of the conciliation proceedings, before a Board and for seven days after the conclusion of
such proceedings, the Act prohibits strike and lock-out.

a. Conciliation Officer:
Under Section 4 of the Industrial Disputes Act, 1947, the appointment of a such number
of persons as is deemed fit by the appropriate government is provided for. This is with
reference to the relevant jurisdiction in which the dispute falls.

For undertakings that employ 20 or more persons, the Commissioner/ Additional

Commissioner/ Deputy Commissioner is appointed as the Conciliation Officer. But at the
State level, some officers from the Central Labour Commission office are appointed as
conciliation officers, in the case of Central Government. The conciliation officer enjoys
the powers of a civil court, and he is expected to give a judgment within 14 days of the
commencement of the conciliation proceedings. This judgement that is given by him is
binding upon the parties to the dispute.
 Board of Conciliation
A board should consist of a chairperson and two or four other members, as the
appropriate government thinks fit. The chairman should be an independent person, and
the other member should be a person appointed in equal numbers to represent the parties
to the dispute on the recommendation of the parties concerned. If any party refuses to
make a recommendation within the prescribed time, then the appropriate government can
appoint such persons eligible to represent the party.
2. Court of Inquiry
If there should be an occurrence of the disappointment of the conciliation procedure to
settle a question, the administration can choose a Court of Inquiry to enquire into any
matter associated with or significant to debate. The court is mandated upon to present its
report inside of six months and may comprise of at least one people to be chosen by the
proper government.

The court of enquiry is required to present its report inside a time of six months from the
initiation of enquiry. This report is therefore distributed by the administration within 30
days of its receipt. Not at all like amid the time of pacification, labourers’ entitlement to
strike, businesses’ entitlement to a lockout, and bosses’ entitlement to reject labourers,
and so forth stay unaffected amid the procedures in a court to an enquiry.

A court of enquiry is different from a Board of Conciliation. While the Board’s basic
objective is to promote the settlement of an industrial dispute, a court of enquiry is
primarily fact-finding machinery that aims at inquiring into and revealing the causes of
an industrial dispute.
 

3. Voluntary Arbitration
On the disappointment of placation procedures, the conciliation officer may persuade the
parties to refer the dispute to a voluntary arbitrator wherein the arbitrator alludes to
getting the question settled since he is an autonomous individual picked by the parties
included commonly and willfully.

As such, assertion offers an open door for an answer of the debate through an authority
together delegated by the gatherings to the question. The procedure of intervention spares
time and cash of both the gatherings which is generally squandered if there should be an
occurrence of settling.

This form of voluntary arbitration became a popular method a settling differences

between workers and management due to the advocacy of Mahatma Gandhi, who had
himself applied it extremely effectively and successfully in the Textile Industry of
 Ahmedabad. However, voluntary arbitration received legal identity only in 1956 when
the Industrial Disputes Act, 1947 was amended in order to include a provision relating to
it.

This provision for voluntary arbitration was provided keeping in mind the lengthy legal
proceedings and formalities and resulting delays that is involved in adjudication. But it is
pertinent to note that the arbitrator is not vested with any judicial powers. He only derives
his powers to settle the dispute at hand from the agreement entered into by the parties of
opting to refer the dispute to the arbitrator. The arbitrator is required to submit his award
to the government who shall then publish it within 30 days of such submission, and the
award shall be enforceable only upon the expiration of 30 days of its publication.

Intentional intervention is one of the most democratic ways for settling industrial disputes
and conflicts. It is the best technique for determining modern clashes and is a reasonable
and fair supplement to aggregate bartering. It not just gives an intentional technique for
settling industrial disputes, but on the other hand is a faster method for settling them.

This is because it depends on the idea of self-government in industrial disputes.

Moreover, it abridges the extended procedures orderly on arbitration, suggests a solid
demeanour and a created viewpoint; helps with fortifying the exchange union
development and contributes for working up sound and cheerful modern relations.
 

4. Adjudication
A definitive solution for the settlement of industrial disputes is its reference to arbitration
by a labour court or tribunals when conciliation fails to achieve a settlement with respect
to the dispute or conflict. Arbitration comprises of settling debate through intercession by
the outsider delegated by the legislature. The law gives the mediation to be directed by
the Labour Court, Industrial Tribunal of National Tribunal.

A debate can have alluded to arbitration if the business and the recognised trade union
consents to do as such. A question can likewise be alluded to arbitration by the
Government regardless of the possibility that there is no consent of the parties in which
case it is called ‘mandatory arbitration’. As has been mentioned before, the dispute may
be referred to any of three sorts of tribunals relying upon the nature and certainties of the
question in inquiries.
This include:
(a) Labour courts,
(b) Industrial tribunals, and
(c) National tribunals.
 The procedure, powers, and provisions with respect to the beginning of the award and
time of operation of an award of these three bodies are comparable and similar. The first
two bodies may be set up either by any State Government or by the Central Government.
However the National Tribunal may be set up only by the Central Government when it
believes that the adjudication of a dispute is of national significance. These three bodies
are hierarchical in nature, and it is the Government’s privilege to refer a question or
dispute or conflict to any of these bodies relying upon the nature of the conflict or
dispute.

H. Tripartite and Bipartite Bodies:

Tripartite bodies involve employee, employer and Government. Bipartite committee
comprises of employer and employee. Tripartite committee includes committees on
Conventions, steering committee on wages, central implementation and evaluation
machinery, Central Board of Worker’s Education and National Productivity Council.

Workers committee is an example for Bipartite committee. This committee is

represented by employer and employees. It is established through legislation. Method
of constitution of this committee is specified in the enactment. .

I. Strike and lockouts

 Strike
a. Definition of Strike/ Strike Meaning
Section 2(Q) of the industrial dispute act, 1947 defines the Strike that ‘Strike is a
temporary cessation of the work by the group of the employees of the industry with
the same intention to stop the work.
The strike means the refusal of work that is decided by the association of a group of
employees or workers. It is done by the workers to get their necessary demands
fulfilled by the employer of the company or industry.

The strike includes:

 Willing full suspension of work.
 It is a temporary withdrawal of the workers from the work.
 The workers can do the strike outside or inside of the workplace.
 the common understanding for the suspension of work should be present for
the strike.
 it can be continued for any number of days.
 The workers start working when the demands are fulfilled.
 The strike can make a loss to the industry as the workers will not do any kind of
work. The production or growth of the industry can take the loss.

b. Essentials of strike
There are many essentials of strike given under the act which are:
1. Cessation of work
2. Cessation of work in combination by a group of employed persons in the
industry
3. The persons should be employed in the industry.
4. The refusal of work must be the refusal of common understanding by such
persons.

Cessation of work
Cessation of the work in the industry is the essential element for the strike. Cessation
of work means the work of the industry has been stopped. Even the period for the
stoppage is only half-hour still it will fall in the definition of a strike if the other
requirements of the definition are fulfilled.

Cessation of work in combination by a group of employed persons in the

industry
The stoppage of work must be with the common intention of the employees and that
too in defiance of the authority of employers.

c. Types of strike
There are various types of strikes. All the strikes are differing in their mode of action
but all the strikes aim to enforce their demands from the employer.

 General strike           

The general strike is also known as a legal strike. In the general strike, the
workmen give prior notice to the employer with their demands that they
wanted to enforce. If the management of the industry fails to fulfil the demand
within the given time in the notice, the workers launch the strike after the
expiry of the notice.
 Sit down strike
In the sit-down strike, all the employees come on time in the industry
normally, take their position in the area which they regularly work, they
simply sit there without doing any kind of work. The object of this strike is to
cripple the production of the industry.
  Pen down Strike
The pen down and sit down strikes are almost the same. The pen-down strike
takes place among people with white-collar jobs or the employees who work
in the offices. The employees do not touch the pen/tool they use to do their
work.
 Go slow strike
In this strike the workmen come to the industry daily, they do the work also,
but the speed of the work will as much slow that they are doing nothing
productive. The production of the industry will become almost zero even after
the working of the workmen.
 Sick out strike   
It is not a strike, it is just to show the employer that what it would be like if
the worker went on strike. In this, all workmen take the sick leave on the same
day. They have not broken any rules because they just use the leave that was
allotted to them.
 Economic Strike
When the strike is happening due to economic issues like salary, bonus,
working hours and conditions etc, it is called an Economic strike.
 Sympathy Strike
When more unions of employees join the strike initiated by another union for
support that union is called Sympathy Strike.
 Wildcat strike
The type of Wildcat strike happens when workers go on strike without the
consent of the union, made for them.
 Hunger strike
Hunger strikes occur when the workers go on the strike without taking
food/water. It is a very painful type of strike. There is a case when the
Kingfisher airline’s employees went on hunger strike for the salary dues for
several months.

d. Common Reasons for Strike

Here is the list of common reasons on which the strike occurs
 Working hours of Industry
 work conditions
 Employment salary, bonus or increments etc
 Layoff and retrenchment
 Timely payment of work
 Minimum wages issues
 Holidays
 PF/ ESI et
 Lockouts

a. Definition
Lock-out means temporary closing of the industry, or suspension of work, or the
refusal of the work by the employer of the industry to continue employment to any
number of workmen employed within the industry.

b. Essentials of Lock-out
There are two essentials of the Lock-out
1) Closing of the industry
2) Suspension of work
3) Refusal by the employer to continue to employ any number of workmen
employed in the industry

Coercion and retaliation are the main elements of the Lock-out that must be used by
the employer. The mere suspension of the work without accompanied by an intention
to retaliate will not amount to Lock-out.

If the employer of the industry shut down the work because the raw material, or the
fuel or any necessary material is not present, it will not amount to Lock-out.

c. Common Reasons for Lockout

Here is the list of common reasons on which the Lockout occurs
 In response to a strike initiated by employees
 disputes between workers and managers
 Changes in the government rules
 Illegal activity is undertaken in the company

d. Prohibition of strike and lockout

The stopping or cessation of work whether by the workmen or by the employer of the
industry is harmful to the production and economy of the society. For this, the
industrial dispute act is providing some prohibition of strikes and lockout.

 Prohibition of strikes
The strike is not allowed by the persons employed in public utility services:
1.  Without giving the 6 weeks prior notice to the employer before
striking,
2. Within 14 days of giving such notice,
3. Before the expiry date of the strike which was given in the notice,
 4. During the pendency of any proceedings under conciliation,
5. Before the seven days of the decision of the conciliation officer.
 Prohibition of lock-out
The lock-out shall not allow the employer to carry on any public utility
service:
1. Without giving the 6 weeks prior notice to the employees before lock-
out,
2. Within 14 days of giving such notice,
3. Before the expiry date of a lock-out which was given in the notice,
4. During the pendency of any proceedings under conciliation,
5. Before the seven days of the decision of the conciliation officer.

e. Illegal strikes and lock-out

Section 24 of the act defines the illegal strikes and lockouts that a strike and lock-out
is illegal if it is:
 Declared without the prior notice of 6 weeks,
 Declared during the pendency of conciliation proceeding,
 If it is continuingly contravention the boundaries of strikes and lockouts

f. Conditions where the strike and Lock-out is not deemed to be illegal

 The strike or lock-out which is already commenced before the reference of the
dispute
 A lock-out declared by the employer in the consequences of an illegal strike
 Strike declared by employees in the consequences of an illegal lock-out

g. Penalties for illegal strike and lock-out

There are various penalties that have been given in the act for illegal strikes and
illegal lock-outs
 Penalty for commencing
a) Imprisonment for one month,
b) Fine up to fifty rupees,
c) Both
 Penalty for instigation
a) Imprisonment for 6 months,
b) Fine up to one thousand rupees,
c) Both.
 Penalty for giving financial aid
a) Imprisonment for 6 months,
b) Fine up to one thousand rupees,
c) Both
h. Justified and unjustified strikes
A strike where the strike is legal and the motive or reason behind the strike is
realistic, the strike is justified.

Where the strike is commenced by the employees to intimidate the employer is an

unjustified strike.

i. Difference between strikes and lockouts

S. No. STRIKE LOCK-OUT

It is the weapon of the employer

It is the weapon of employees against employees to restrict the
against employers to bend the militant’s spirits of the workers of
1 employer in their side. industry.

Cessation of work by employees

in the industry to show grievance Cessation of work by the employer to
or to compel the employer to accept the terms and conditions
2 fulfil their demands. decided by the management.

The Strike involves the united

withdrawal of the supply of Lockout Involves the withholding of
3 labour at work. demand of labour.

Reasons can be economic or non-

4 The reasons are often economic. economic

5 The strike is of various types. The lock-out does not have varieties.

The strike is conducted to gain a Lock-out is used to enforce the terms

6 concession from the employer. of employment during the dispute.

It is a full cessation of work by

employees until the fulfilment of It is a temporal shutdown by the
7 their demands. employer, refusal of employment.

The Lockout is the employer power to

The strike is a union power as it is compel the workers to do the work
8 sported by the labour or union. according to their guidelines.
J. Understanding the concept of lay-off and Retrenchment under the Industrial
Disputes Act, 1947

a. Introduction 
Layoff and retrenchment are discussed in the Industrial Disputes Act of 1947.
Layoff refers to the removal of employees by the employer for reasons other than the
employee’s fault. A layoff is temporary in nature as it indicates the incapability of an
employer to continue the employment of the workers for a short period.

Retrenchment refers to a situation where the employer removes his employees to increase
profits and decrease losses. Even in retrenchment, there is no fault of the employee that
results in the termination of the employment.

b. Understanding the concept of lay-off under the Industrial Disputes Act, 1947
Section 2 (kkk) of the Industrial Disputes Act, 1947 defines the term ‘Layoff’’ as the
inability, failure, or refusal of the employer to provide employment to a workman whose
name is mentioned in the muster roll of his industrial establishment and who is not
retrenched due to the lack of power, coal, raw materials, accumulation of stocks,
breakdown of machinery or natural calamity for any other relevant reason.  

 Conditions essential for a lay-off

o There must exist an inability, failure or refusal from the employer’s side to
provide employment to the workmen.
o Such inability, failure or refusal must be due to lack of power, coal, raw materials,
accumulation of stocks, breakdown of machinery or natural calamity for any other
relevant reason.
o The name of the workman must be mentioned in the muster roll of the employer’s
industrial establishment.
o The workman must not have been subjected to retrenchment.

A layoff is a measure that is used only in continuing businesses. If the employer decides
to permanently shut down his industrial establishment then layoff is of no use. Layoff
must adhere to the conditions provided in Section 2 (kkk) of the Industrial Disputes Act,
1947 or else it will not be considered right as per the law.

Layoff means there will be immediate removal of the employees, however, such
unemployment is temporary in nature so it does not result in the termination of the
already existing employer-employee relation and leads to no alteration of the terms of
such employment.
 Prohibition of lay-off under Industrial Disputes Act, 1947 
a. An employer is subjected to certain restrictions while laying off workers as
per Section 25M (Chapter VB added to the Industrial Disputes Act of 1947 by
the Industrial Disputes Amendment Act of 1976).
b. These restrictions apply to those industrial establishments which are not seasonal
in nature and where there more than 100 workmen. An employer cannot lay off a
workman whose name is mentioned in the muster roll of his industrial
establishment except when the reason for such layoff is lack of power or a natural
calamity.
c. If the work is regarding a mine then the reasons can also be fire, explosion, excess
of inflammable gas or a flood.
d. An employer can lay off the workmen after acquiring the permission of the
concerned authorities specified by the government or the government itself.
e. For this purpose, an application shall be made by the employer stating the reasons
for such lay-off and a copy of the same application shall be provided to the
workmen who are subjected to such lay-off.
f. After receiving an application, the concerned authority or the government can
inquire about such lay off. After such inquiry, the order of the concerned authority
or the government must be communicated to the employer and the employees
being laid off.
g. The order of the concerned authority or the government shall be considered as
final and will be binding for a period of one year from the date of such order.
h. If the concerned authority or the government does not communicate its order
regarding its grant or refusal to grant permission for such lay off within 60 days
from the date of application then such application for permission shall be
considered as granted.
i. The order of the concerned authority or the government can be referred to a
tribunal for adjudication or reviewed either in its own motion or through an
application made by an employer or any workman.  
j. In case any lay off occurs even after the permission to do so is refused then such
lay off will be considered illegal and the workmen laid off will be entitled to the
benefits of the law. However, an employer will not be considered to have laid off
a workman if he provides alternative employment to such workman. 
c. Closure
The Act defines “Closure” as the permanent closing down of a place of employment or
part thereof. Here, the employer is constrained to close the establishment permanently.
Nonetheless, the due procedure has to be complied with when it comes to rolling out a
plan of closure; the said procedure, as set out by the Act, has been detailed below. These
procedures, nonetheless, do not apply to an undertaking set up for the construction of
buildings, bridges, roads, canals, dams or for other construction work.
Special Provisions: The employer intending to do a closure of his establishment has to
necessarily apply at least ninety days in advance to the appropriate government. A copy
of the said application has to be given to the representatives of the workmen as well. The
said application will be considered and a reasonable opportunity to be heard shall be
given to the employer as well as the workmen. After considering the same, the
appropriate government may or may not grant the employer to close down. Even here, if
the government does not respond within sixty days from application, the permission will
be deemed to have been granted. A similar provision for review of the decision exists
even here.
d. Continuous Service
One year of continuous service entails an entitlement for compensation under the
Industrial Disputes Act(1). A workman is said to be in continuous service if he is for that
period in uninterrupted service. Interruption owing to sickness authorised leave, an
accident, a strike which is not illegal, a lock and a cessation of work which is not due to
the fault of the workman will not be taken into consideration for calculating the period of
continuous service.

A workman could be deemed to have had one year of continuous service even if the
worker hasn’t had a year of continuous service if the worker was in employment for
twelve calendar months preceding the date with reference to which calculation is to be
made, and in the course of these twelve months, he actually worked for not less than one
hundred and ninety days in the case of employment in a mine and two hundred and forty
days in any other case.

The said continuous service shall also include the days laid off, days on earned leave and
days taken off owing to temporary disablement owing to accident arising out of or in the
course of employment. Maternity leave taken, not exceeding twelve weeks shall also be
counted in continuous service in case of female workers.

e. Understanding the concept of retrenchment under the Industrial Disputes Act, 1947
a. Section 2(oo) of the Industrial Disputes Act, 1947 talks about retrenchment. As
per the said section, retrenchment refers to the termination of a workman for any
reason except for a form of punishment in furtherance of imposing disciplinary
action.
 b. However, retrenchment does not include voluntary retirement of a workman,
workman retiring upon reaching the age of superannuation as mentioned in the
employment contract, removal of a workman on basis of continued ill-health, and
removal of the workman because the employment contract is terminated or is non-
renewed after its expiry. 

 Section 25F of the Industrial Disputes Act, 1947: conditions precedent to

retrenchment
 As per this Section, the employer must give one month’s written notice to the
workman that includes the reasons for retrenchment, or in lieu of such notice, the
workman must be paid wages for the period of the notice.
 The employer at the time of retrenchment must pay the workman the compensation
which is equal to the average pay of 15 days for each year of continuous service
provided by such workman.
 The notice regarding retrenchment must be served to the appropriate Government as
well. 

 Section 25G of the Industrial Disputes Act, 1947: procedure of retrenchment

The procedure of retrenchment as per this Section is as follows:
a. If an employer decides to retrench a workman belonging to a certain class of
workmen working in the establishment of such employer, he must ensure to
retrench such a workman who was considered as the last candidate to be
employed for such work at the time of employment.

b. Usually, the rule followed during retrenchment is that it must start with beginners
or new workmen and then progress towards the experienced or senior workmen.

c. However, the exceptions to the above-mentioned method are if a contract exists

between the employer and the workmen that is contrary to the rule or if the
employer states the grounds to retrench any other workman.

d. The employer in good faith is allowed to continue the employment of those

workmen who possess special skills and whose service is imperative for the
establishment’s proper functioning. 
f. Compensation

 Notice and compensation payable to employees

According to section 9A of the ID Act, 1947, it is mandatory for the employer to issue a
notice to his employees in case of the change in conditions of service of such employees
with respect to the following matters (Fourth Schedule):

S.No Conditions of Service, change in which, requires a notice by the

. employer
1. Wages ( wage-period and mode of payment to be included.)
Contribution that has to be paid or that is payable by the employer in
2.
the pension or provident fund under any law in force.
3. Allowances including compensatory allowance.
4. Working hours and intervals for rest.
5. Paid leaves + holidays
Starting alteration or end of shift working (otherwise than as
6.
mentioned in standing orders of the industry)
7. Grade based classification
8. Withdrawal or any change in customary privilege or concession
9. Alteration of existing rules of discipline through addition or omission
Improvement, standardisation of plant or method/technique of
10.
working which will or is likely to lead to retrenchment of workers.
Any increase or decrease in the number of workers employed(other
11. than casual) in any shift, department, occupation, process (other than
on which the employer has no control).

In the above-mentioned cases, the employer is bound by the law to:

1. Give a notice to the worker who is likely to be affected by such changes,
2. The notice should contain all the details of the changes proposed to be made,
3. No such changes as proposed should be implemented within 21 days of serving
the above-mentioned notice.

 Right to compensation and notice in case of a change in the management of the

Industry
 Every employee has a right to get compensation in case of a transfer of ownership of
industrial unit i.e. a change in the employer as per section 25FF of the ID Act, 1947.

It is not necessary that your employer will get changed in all the cases of Merger and
Acquisitions. For instance, when one company acquires the shares of another company and
workers continue working for the latter on the same terms, there is no change of the
employer. But in cases wherein the whole company and its management are acquired, the
employer changes.

Therefore, in cases where the employer has changed because of the reason of the transfer of
ownership of the management of an industrial unit or an undertaking (eg: by Merger or by
Acquisition), the previous employer is liable to give:
 Notice – 1-month notice in writing stating the reasons for a change in the
management;
● Compensation – An amount equal to the 15 days of wages for every
completed year of continuous service or any part of service in excess of 6
months,
To every employee who has been in continuous service of 1 year in that undertaking before
such transfer.

For example:
1. If you have worked for 6 years and 7 months for Rs.1000 per day wage, and your
employer gets changed, you will be given Rs.15,000 (15 x 1000) for every completed
year. Now you have completed 6 years and 7 months, which will be counted as 7
years since any month exceeding 6 months is counted as a fully completed year of
service. Therefore, you will be given Rs.1,05,000(Rs.15,000 x 7).
2. If you have worked for 7 years and 4 months for Rs.100 a day, and your employer
gets changed, you will be given Rs.1500 (15 x 100) for every completed year of
service. Since you have completed only 4 months, which is less than 6 months,
therefore this period of time will not be counted as a full year of continuous service,
and you will be only entitled to compensation for 7 years which will be Rs.10,500
(1500 x 7).
3. If you have worked for wages which are of variable nature i.e. which keeps on
changing daily. Then for calculating your 15 days of wages, an average is to be taken.

g. Protected Workmen
When we learn Industrial Disputes Act, 1947, there are some terms and definitions which
require a lot of explanations. Even the courts have tried to interpret these terms in
 different situations in different ways. Hence an ordinary student will be confused in
understanding these terms.       The term 'Protected workmen' is one among those most
confusing and much interpreted one.

 Section 33 (3) reads as follows:

"Notwithstanding anything contained in sub-section (2), no employer shall, during the

pendency of any such proceeding in respect of an industrial dispute, take any action
against any protected workman concerned in such dispute--

(a) by altering, to the prejudice of such protected workman, the conditions of service
applicable to him immediately before the commencement of such proceedings; or

(b) by discharging or punishing, whether by dismissal or otherwise, such protected

workman,save with the express permission in writing of the authority before
which the proceeding is pending.

Explanation.--For the purposes of this sub-section, a "protected workman", in relation to

an establishment, means a workman who, being a member of the executive or other office
bearer of a registered trade union connected with the establishment, is recognised as such
in accordance with rules made in this behalf.

 How many protected workmen?

As per Section 33 (4) of the Industrial Disputes Act, 1947, the number of workmen to be
recognised as protected workmen shall be one per cent of the total number of workmen
employed therein subject to a minimum number of five protected workmen and a
maximum number of one hundred protected workmen.

Where there are more than one registered trade unions in the establishment, the maximum
number of protected workmen shall be distributed among the unions in such a way that
each union shall have representation as protected workmen in proportion to the
membership of the unions.

If the union is informed that the number of protected workmen allotted to the union is
less than that proposed by the union; after submission of the list, the union will have to
select from the proposed list the names of such persons who should be recognised as
protected workmen and intimate the names to the employer within five days.
h. THE FIFTH SCHEDULE : Unfair Labour Practices
[Section 2(ra)]
I. ON THE PART OF EMPLOYERS AND TRADE UNIONS OF EMPLOYERS
1. To interfere with, restrain from, or coerce, workmen in the exercise of their right to
organize, form, join or assist a trade union or to engage in concerted activities for the
purposes of collective bargaining or other mutual aid or protection, that is to say.-
(a) threatening workmen with discharge or dismissal, if they join a trade union;
(b) threatening a lock-out or closure, if a trade union is organized;
(c) granting wage increase to workmen at crucial periods of trade union organization,
with a view to undermining the efforts of the trade union at organization.
2. To dominate, interfere with or contribute support, financial or otherwise, to any trade
union, that is to say,
(a) an employer taking an active interest in organizing a trade union of his workmen;
and
(b) an employer showing partiality or granting favor to one of several trade unions
attempting to organize his workmen or to its members, where such a trade union
is not a recognized trade union.
3. To establish employer sponsored trade unions of workmen.
4. To encourage or discourage membership in any trade union by discriminating against any
workman, that is to say,
(a) discharging or punishing a workman, because he urged other workmen to join or
organize a trade union;
(b) discharging or dismissing a workman for taking part in any strike (not being a
strike which is deemed to be an illegal strike under this Act);
(c) changing seniority rating or workmen because of trade union activities;
(d) refusing to promote workmen of higher posts on account of their trade union
activities;
(e) giving unmerited promotions to certain workmen with a view to creating discord
amongst other workmen, or to undermine the strength of their trade union;
(f) discharging office-bearers or active members of the trade union on account of
their trade union activities.
5. To discharge or dismiss workmen-
(a) by way of victimization;
(b) not in good faith, but in the colorable exercise of the employer’s rights;
(c) by falsely implicating a workman in a criminal case on false evidence or on
concocted evidence;
(d) for patently false reasons;
(e) on untrue or trumped up allegations of absence without leave;
(f) in utter disregard of the principles of natural justice in the conduct of domestic
enquiry or with undue haste;
 (g) for misconduct of a minor technical character, without having any regard to the
nature of the particular misconduct or the past record or service of the workman,
thereby leading to a disproportionate punishment.
6. To abolish the work of a regular nature being done by workmen, and to give such work to
contractors as a measure of breaking a strike.
7. To transfer a workman mala fide from one place to another, under the guise of following
management policy.
8. To insist upon individual workmen, who are on a legal strike to sign a good conduct
bond, as a precondition to allowing them to resume work.
9. To show favoritism or partiality to one set of workers regardless of merit.
10. To employ workmen as "badlis", casuals or temporaries and to continue them as such for
years, with the object of depriving them of the status and privileges of permanent
workmen.
11. To discharge or discriminate against any workman for filing charges or testifying against
an employer in any enquiry or proceeding relating to any industrial dispute.
12. To recruit workman during a strike which is not an illegal strike.
13. Failure to implement award, settlement or agreement.
14. To indulge in acts of force or violence.
15. To refuse to bargain collectively, in good faith with the recognized trade unions.
16. Proposing or continuing a lock-out deemed to be illegal under this Act.

II. ON THE PART OF WORKMEN AND TRADE UNIONS OF WORKMEN

1. To advise or actively support or instigate any strike deemed to be illegal under this Act.
2. To coerce workmen in the exercise of their right to self-organization or to join a trade
union or refrain from, joining any trade union, that is to say-
(a) for a trade union or its members to picketing in such a manner that non-striking
workmen are physically debarred from entering the work places;
(b) to indulge in acts of force or violence or to hold out threats of intimidation in
connection with a strike against non-striking workmen or against managerial staff.
3. For a recognized union to refuse to bargain collectively in good faith with the employer.
4. To indulge in coercive activities against certification of a bargaining representative.
5. To stage, encourage or instigate such forms of coercive actions as willful, ,"go-slow",
squatting on the work premises after working hours or "gherao" of any of the members of
the managerial or other staff.
6. To stage demonstrations at the residence of the employers or the managerial staff
members.
7. To incite or indulge in willful damage to employer’s property connected with the
industry.
8. To indulge in acts of force or violence or to hold out threats of intimidation against any
workman with a view to prevent him from attending work.
i. Penalties under Industrial Dispute Act 1947
Industrial Dispute Act 1947 act to make provision for the investigation and settlement
of industrial disputes, and for certain other purposes. The act lays down penalties for
various offences.
They are as follows:-
 Section 25Q – Lay-Off or Retrenchment without prior permission – Contravening
the provisions of Section 25-M or 25-(N) || Penalty – Workman entitled to all
benefits as if they had not been laid off. Employer shall be punishable with
imprisonment upto 1 month and / or fine upto Rs.1000.
 Sec.25-R(1) – Illegal Closure: – Closing down an undertaking without complying
with the provisions of Section 25-O(1) || Penalty – Workman entitled to all
benefits as if there had not been any closure. Employer shall be punishable with
imprisonment upto 6 month and / or fine upto Rs. 5000.
 Sec.25-R(2) Contravening an order refusing permission to close down the
undertaking under Section 25-O or direction given under Section 25-P || Penalty
– Workman entitled to all benefits as if there had not been any closure. Employer
shall be punishable with imprisonment upto 1year and / or fine upto Rs. 5000,
with a further fine of upto Rs. 2000 for each day of contravention after conviction.
 Sec.25-T, 25-U – Committing an Unfair Labour Practice. || Penalty Imprisonment
upto 6 months and / or fine upto Rs. 1000.
 Sec.26 (1) – Illegal strikes by a workman – workman who commences, continues
or otherwise acts in furtherance, of, a strike which is illegal under that Act ||
Penalty – Imprisonment for 1 month and / or fine upto Rs. 50.
 Sec.26 (2) – Illegal lockout -employer who commences, continues, or otherwise
acts in furtherance of a lock-out which is illegal under this Act || Penalty –
Imprisonment for 1 month and/ or fine upto Rs. 1000.
 Sec.27 – Instigation – Any person who instigates or incites others to take part in,
or otherwise acts in furtherance of, a strike or lock-out which is illegal under that
Act. || Penalty – Imprisonment for 6 month and / or fine upto Rs. 1000.
 Sec.28 – Financial Assistance to a Strike – Any person who knowingly expends
or applies any money in direct furtherance or support of any illegal strike or lock-
out. || Penalty – Imprisonment for 6 month and / or fine upto Rs. 1000.
 Sec.29 – Breach of settlement or award binding under the act. || Penalty –
Imprisonment for 6 month and / or fine + an additional fine of Rs. 200 per day if
breach continues after conviction.
 Sec.30 – Disclosing confidential information in contravention of the provisions of
Section 21 || Penalty – Imprisonment for 6 month and / or fine Rs. 1000.
 Sec.30-A – Closing down any undertaking without complying with the provisions
of Section 25- FFA || Penalty – Imprisonment for 6 month and / or fine Rs. 5000.
 Sec.31(1) – Contravention of Section 33 – Service conditions remaining
unchanged during pendency of proceedings || Penalty – Imprisonment for 6
month and / or fine Rs. 1000.
 Sec.31(2) – Contravening any other provision where specific penalty is not
provided for. || Penalty – Fine upto Rs. 100.