Labour Law 1

Content

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Introduction to Labour.................................................................................................................................................................... 3
Niemla Textile Mills v The 2nd Punjab Tribunal AIR 1957 SC 329......................................................................................3
Excel Wear v Union of India (1978) 4 SCC 224....................................................................................................................3
PUDR v Union of India (1982) 2 LLJ 454 (SC).....................................................................................................................3
Trade Unionism.............................................................................................................................................................................. 4
Jay Engineering Works v State of West Bengal AIR 1968 Cal 407.......................................................................................6
Rangaswami v Registrar of Trade Unions AIR 1962 Mad 231..............................................................................................6
Bokajan Cement Corpn Employees’ Union v Cement Corpn of India Ltd. (2004) 1 SCC 142..............................................7
Balmer Lawrie Workers Union, Bombay v Balmer Lawrie and Company Ltd (1985) I LLJ 314..........................................7
Vidyasagar Institute of Mental Health v Hospital Employees Union (2006) ILLJ 781 (Del) ................................................8
Bharat Kumar v State of Kerala AIR 1997 Ker 292 –............................................................................................................8
Communist Party of India v Bharat Kumar (1998) 1 SCC 201..............................................................................................8
Kameshwar Prasad v State of Bihar AIR 1962 SC 1166 –.....................................................................................................8
Appropriate Govt............................................................................................................................................................................9
Steel Authority of India Ltd. v National Union of Water Front Workers (2001) 7 SCC 1.....................................................9
Industry........................................................................................................................................................................................... 9
Bangalore Water Supply and Sewerage Board v A.S. Rajappa (1978) 2 SCC 548..............................................................12
Physical Research Laboratory v K.G. Sharma (1997) 4 SCC 257- ......................................................................................14
General Manager Telecom v A Srinivasa Rao (1997) 8 SCC 767........................................................................................14
All India Radio v Santosh Kumar (1998) 3 SCC 237...........................................................................................................14
Coir Board, Ernakulam and Cochin v Indira Devi (1998) 3 SCC 259..................................................................................14
Agricultural Produce Market Committee v Ashok Harikuni (2000) 8 SCC 61....................................................................15
State of UP v Jai Bir Singh (2005) 5 SCC 1.........................................................................................................................15
Industrial Dispute Case................................................................................................................................................................. 16
Workmen of Dimakuchi Tea Estate v DTE AIR 1958 SC 353............................................................................................16
Workmen v Dharampal Premchand (Saughandi) AIR 1966 SC 182....................................................................................16
Workmen cases.............................................................................................................................................................................16
Dharangadhara Chemical Works v Management AIR 1957 SC 264....................................................................................16
Diwan Mohideen Sahib v Industrial Tribunal, Madras AIR 1966 SC 370...........................................................................17
Workmen of Nilgiri Cooperative Marketing Society v State of Tamil Nadu (2004) 3 SCC 514..........................................17
HussainBhai v Alath Factory Employees Union (1978) 4 SCC 257....................................................................................17
SK Verma v Mahesh Chandra (1983) II LLJ 429 1983 (4) SCC 214...................................................................................18
HR Adhyantaya v Sandoz (India) Ltd. (1994) 5 SCC 737...................................................................................................18
SK Maini v M/S Carona Sahu Company Ltd. (1994) 3 SCC 510.........................................................................................18
Heavy Engineering Corporation v Presiding Officer, Labour Court (1996) 11 SCC 236.....................................................19
Workmen of the Canteen of Coates of India Ltd v Coates of India Ltd. (2004) 3 SCC 547.................................................19

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State Prescription of Standards.....................................................................................................................................................19
Lay off-.................................................................................................................................................................................... 19
Workmen of Dewan Tea Estate v Their Management AIR 1964 SC 1458..........................................................................19
Workmen of Firestone Tyre and Rubber Co. v The Firestone Tyre and Rubber Co. (1976) I LLJ 493 (SC).......................20
Associated Cement Companies v Their Workmen AIR 1960 SC 56....................................................................................20
Lockout.................................................................................................................................................................................... 21
Kairbetta Estate v Rajamanickam AIR 1960 SC 893...........................................................................................................21
Retrenchment........................................................................................................................................................................... 21
Hariprasad Shiv Shankar Shukla v A.D. Divelkar AIR 1957 SC 121..................................................................................22
Uptron v Shammi Bhan (1998) 6 SCC 538..........................................................................................................................22
Anand Bihari and Others v RSRTC 1991 Lab IC 494..........................................................................................................22
Closure..................................................................................................................................................................................... 23
Orissa Textiles & Stell Ltd. V State of Orissa 2002 Lab IC 570(SC)...................................................................................23
Strike........................................................................................................................................................................................ 24
TK Rangarajan v Govt of Tamil Nadu AIR 2003 SC 3032 –...............................................................................................26
Rohtas Industries v Union (1976) 2 SCC 82........................................................................................................................27
Gujarat Steel Tubes v Mazdoor Sabha AIR 1980 SC 1896..................................................................................................28
Vidyasagar Institute of Mental Health v Hospital Employees Union (2006) ILLJ 781 (Del) –............................................28
Remuneration for Labour..............................................................................................................................................................28
Equal Remuneration Act, 1976.................................................................................................................................................28
Randhir Singh v. UOI 1982 AIR 879...................................................................................................................................28
People’s Union for Democratic Rights v. UOI (1982) 3 SCC 235.......................................................................................29
Mackinnon Mackenzie v. Audrey D’Costa 1987 AIR 1281.................................................................................................29
State of AP v. G. Sreenivasa Rao 1989 SCR (1)1000..........................................................................................................30
Minimum Wages Act, 1948.....................................................................................................................................................30
Standard Vacuum Refining Co. of India v Their Workmen AIR 1961 SC 895....................................................................31
Bijay Cotton Mills Ltd v Their Workmen AIR 1955 SC 33.................................................................................................31
Muir Mills Co. Ltd v. Suti Mills Mazdoor Union, Kanpur [1995 AIR 170].........................................................................31
Transfer of Undertaking................................................................................................................................................................31
Unfair Labour Practices................................................................................................................................................................ 31

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Introduction to Labour
Niemla Textile Mills v The 2nd Punjab Tribunal AIR 1957 SC 329
- Disputes b/w A and their workmen were referred to the Industrial Tribunal for adjudication- by the Appropriate Govt.-
under the provisions of the ID Act. The A’s contended that the reference to the Tribunal was bad because:
o The Act was ultra vires the Constitution: violated A-14 and 19 (1) (f) and (g)
o The Industrial Tribunals are legislating in the guise of adjudication- amounts to delegation which is not
competent to the Central Legislature to do.
o ‘Industry’ comprised industrial and non-industrial concerns- therefore the Act was not within the legislative
competence of the Central Legislature under Entry 29, List III of the 7 th Schedule to the GOI Act, 1935.
- Held: Not unconstitutional:
▪ Basic idea underlying all the provisions of the Act is the settlement of industrial disputes and the
promotion of industrial peace.
▪ So that production may not be interrupted- and the community in general may be benefited.
▪ The Appropriate Govt. therefore, has the discretion in the matter of making the reference to one or
other Authorities under the Act and also in the matter of carrying out the various provisions of the Act
(incl. curtailment or extension of the period ‘of preparation of the award of the Tribunal, having regard
to the exigencies of the situation and the objects to be achieved.
o Industrial Tribunal while settling, lay down certain general principles to be followed:
▪ In regard to the determination of bonus, reinstatement of dismissed or discharged employee, and other
allied topics.
▪ Main objective was to promote industrial peace.
▪ But, these principles/rules of conduct, though applied as precedent while adjudicating are not rules of
law and don’t amount to legislation.
o Act is not ultra vires the Legislature
▪ Matters included within the definition of the term- “industry” are within the legislative competence of
the Central Leg.- E-27 & 29, List III.

Excel Wear v Union of India (1978) 4 SCC 224

- EW is a partnership firm with 400 workmen- manufacturing garments for export.
- Relations b/w employer and workmen got very strained- workmen became very militant, aggressive and violent-
indulged in unjustifiable and illegal strikes.
- Various incidents have been mentioned in the Writ by the P- however, those facts seriously disputed- So, Court didn’t
give a view either way.
- P’s contention: Contended violation of FR- unreasonable restriction- it became almost impossible to carry on the
business. P’s issued notice to R2 (Govt. of Maharashtra) for previous approval for intended closure (under S-250 (o)
(1)- which was refused on grounds that prejudicial to public interest.
- Right to close down a business is not an integral part of the right to carry on a business- not an FR.
Labour Unions:Held:
● Right to close down a business can’t be treated at par with the right to start/carry on a business. But, the
LU’s approach also wrong.
● Not an absolute right and can be restricted by law in interest of general public.
● S-25 (o) (2) doesn’t require the giving of reasons in the order- so an unreasonable order was possible to
be passed because of the unreasonableness of the law- Order wasn’t subject to scrutiny by any higher
authority in appeal or revision- can’t be reviewed.
● Court held it to be an unreasonable restriction- not giving effect to A-39(1) or 41.
● Also, declared S-25(o) and 25R (so far as it relates to the awarding of punishment) constitutionally bad
and invalid for violation of A-19(1).
● Didn’t comment on merits since order fell under constitutional invalidity.

PUDR v Union of India (1982) 2 LLJ 454 (SC)

- Writ petition through a letter from a social scientist (protecting democratic rights organization) investigating into
several Projects- complained of violation of various labour laws by the R’s- seeking interference by the SC to render
social justice by means of appropriate directions to the affected workmen.
- SC issued notice of UOI, Delhi Admin and DDA.
- Allegations in the petition:

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 o Minimum Wages Act: Contractors engaged workers through ‘jamadars’ who brought them from different parts
of India (Rajasthan, UP, Orissa) and paid less than the minimum wage per day per worker and not to workmen
direct.
o Equal Remuneration Act: women workmen were being paid less- balance of amount being misappropriated by
Jamadars.
o Contract Labour (Regulations and Abolition) Act: violation- resulted in deprivation and exploitation of workers
and denial of their right to proper living condition, medical and other facilities under the Act.
o Inter-State Migrant Workmen (Regulation of Employment and Conditions of Service) Act - Even though been a
while, hadn’t been implemented by Contractors.
- Held:
o Court allowed PIL as FR violation.
o Hereafter, any contract b/w 2 public sector companies must ensure suitable provisions in the contract that the
wage will be paid by the contractors to the workmen directly w/o intervention of any jamadars.
o Contractor must ensure that no amount by way of commission or otherwise if deducted/recovered by the
jamadars from the wages of workmen.
o Whenever construction work is being carried out- must institute an effective system of periodic inspections
coupled with occasional surprise inspections by the higher officers in order to ensure no violations. If violations
found- immediate action. Shouldn’t have to wait for formal complaint by workmen to be lodged.

Trade Unionism

This module can be divided into three parts- 1) History of Trade Union Movement in India, 2) Introduction to the Trade Unions
Act, 1926: History, definitions and 3) Registration, Recognition, Rights and Liabilities of Trade Unions.
Meaning of Trade Union: The classical definition: “ A trade Union is a continuous association of wage earners for the
purpose of maintaining and improving the conditions of their working lives.” Characteristics- voluntary, continuous association,
objective: to maintain and improve the working conditions of members. Indian Trade Unions Act, 1926: S. 2(h)-
characteristics: 1) states combination instead of association- wider, 2) includes associations of employees and employers, 3)
does not include voluntary organisations formed for giving benefits to their members in sickness, infirmity, old age etc.
I. History of Trade Union Movement in India
Modern trade Unionism is a development that is attributable to the conditions created by and during the industrial revolution.
The prevailing circumstances: focus on individualism, non-interference by state (lassiez- fare), freedom of contract. The
juridico-legal framework during this period made it difficult for workers to demand for and enforce their rights. Some legal
tools that hampered development of unions were- 1) doctrine of criminal conspiracy, 2) doctrine of restraint of trade, 3) breach
of contract by workers was a criminal offence in India.
Phase I: 1850-1900
Workers in plantations- indigo, tea,etc. were exploited during the late 18th century and early 19th century. Most of them were
contract workers and there was complete neglect of their welfare. The garden sardars (contractors) did not consider
overcrowding, disease, lack of resources etc. during the voyage to the plantations.
Then emerged a new working class in textile factories. Their interests were also given primacy. They were neglected. Main
problems: child labour, female labour, unregulated work hours, low/ negligible wages, bad working conditions.
In 1881 the Factories Act was enacted to safeguard some interests- prohibited child labour, factory inspectors etc. The
development of trade unions was slow in this era. There were many strikes with organised labours in factories in Bombay
Madras, Ahmedabad, Calcutta. In 1890 the first trade union, the Bombay Millhands Association was formed by N.M Lokhande
but it was not a trade union in the strictest sense it was merely a clearing house for grievances of the mill workers. In 1897- the
Amalgamated Society if Railway Servants of India and Burma was established.
Phase II: 1900-1947
1904- Printers Union, 1907- Bombay Postal Union, and later the Press Employees Union were established. Not proper trade
unions- but sowed the seeds for labour collectivising and claiming their rights.
Impact of First World War and ILO in this phase: global awareness of labour rights, Bolshevik revolution, growing high cost of
living in India during the war intensified the trade union movement. There were many strikes and this increased the labour
consciousness among workers. India being a signatory to the Treaty of Versailles, recognising the League of Nations and
ratifying the ILO was required to protect the interests of the labour.
In 1918, India’s first proper trade union was formed, the Madras Labour Union founded by PP Wadia. However these
movements were limited industrial cities.
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In 1920- the All India Trade Union Congress was formed to coordinate different labour organisations. This connected the labour
movement with larger independence movement. However there was no law in place to recognise or regulate these unions. A
madras High court judgement in 1920 granting an injunction against union officials form soliciting workers to strike led to a lot
of unrest which culminated in the Trade Unions Act, 1926.
In 1929, a Royal Commission on Labour in India was appointed. The commission recommended that employers recognise trade
unions, restrictions on trade unions should be reconsidered, and there must be a review of the act in not more than 3 years.
Unionism was not coherent and systematic in this phase. There were a lot of ups and downs.
Phase III. 1947 onwards- golden era of trade unionism- Many labour friendly legislations were passed. Many unions were
formed in line with political parties etc. Most laws allow compulsory adjudication which can also be tripartite with the
individual aggrieved, the union and the employer. Unions are used to effectuate collective bargaining.
Difference b/w labour movement and trade union movement- former is for workers and latter is by workers, the former evolved
prior to the latter.
II. Trade Union Act, 1926
The law on Trade Unions is scattered. Right to form Trade Union- Article 19(1)(c), no compulsory requirement of union to
represent in cases of industrial dispute under IDA, Code of Discipline in the industry provides for voluntary recognition of trade
unions by employer.
Important Amendments made to Trade Union Act, 1926: Recommendations by the National Labour Commission, 1969: (1)
Trade Union registration should be made compulsory, (2), time restriction on granting/refusing of registration, (3) cancellation
of TU if they do not comply with requirements under law, (4) recognition should be made compulsory. (Not all
recommendations have been fulfilled).
The Act was further amended in 2001- S.4, S.5, S. 6, S.9, S.11 and S. 29 and S. 22 was substituted by a new section.
Important Sections: S.2, 2(a), 2(b), 2(c), 2(d), 2(e), 2(f), 2(g), 2(h), 3-10, S. 17, 18, 19, 20, 21, 21A, 23-27.
III. Registration, Recognition, Rights and Liabilities of Trade Unions

Registration Recognition

1) “Registration is an act of the members of the union
by which through a procedure set by the government
unions attain legal identity and status”.
2) Deemed to be a corporate if registered. Also immune
from some liabilities as stated in S.18, 19, etc.
3) Registration is not compulsory, doesn’t make the
union illegal.
4) Benefits- legitimacy, separate legal entity- body
corporate, SO defines union as a registered union,
allows union to make representation in front of
appropriate forums.
5) More than one union can be registered with the same
employer. No need to give notice to other unions.
(Keshoram Rayon Workers Union v. Registrar of
Trade Unions,AIR 1967 Cal .507)
1) “Recognition is an act of the employer whereby he
agrees to treat a certain union union as the legitimate
representative of all the workmen of the
establishment”.
2) Registration does not automatically give recognition.
3) Recognition is generally contractually agreed b/w the
employer and employee/union unless procedure is
state law states otherwise.
4) Many state laws provide for recognition of trade
unions. Example- Maharashtra, West Bengal, Andhra
Pradesh. Bihar and Orissa have non-statutory
provisions.

Process for registration: Registrar should be appointed under S. 3, Minimum threshold requirements for registration under S.
4, Application under S.5, requirement of rules under S. 6, S. 7- alterations of name can be suggested by registrar, S. 8-
registration- registrar does not have any discretion (only administrative, no quasi judicial power)- as longs as all conditions are
fulfilled- the registrar cannot decide on legality/illegality under any other law (In re Inland Steam Navigation Workers Union
AIR 1936 Cal .57), appeal lies in HC under Art. 226 if not registered within 3 months from application date.
Post registration: S.10-14. Who can be members- Bokajan case and S. 21 (minors). No right to be a member as such, court
cannot interfere, rules as created under S. 6 will guide on who can be members and how they may be expelled. Funds: General
(S.15) and Special (S.16). Not compulsory for members to contribute to special fund and money from general fund cannot be
utilised for political purposes. Office bearers- Section 22 and Section 21-A
Rights of Registered Trade Union: S.17- immunity against criminal conspiracy, S. 18- immunity in certain civil cases
Other Important sections: 19, 20, 23, 25, 26, 27.
Duties of Trade Unions: Duty to inform registrar of change in name, address of the union or any amalgamation, further notify
change in rules, officers etc. also submit statement of accounts as required.

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Problems with TU: inter union rivalry, political nature-overlook needs of workers, outside leadership can cause lack of focus,
monopoly through closed shop/union shop causes monopoly, non- recognition by employers, how truly representative of all
kinds of workers?
Close shop/union shop- a security clause- Pre-entry- employer will hire only member or post entry- will require them to
become a member of the union after hiring. They must be a member of union to continue employment. The union will also have
to admit any employee as their member.

Jay Engineering Works v State of West Bengal AIR 1968 Cal 407 – gherao
- HC didn’t approve the technique of “gherao” as a legal means to redress grievances of workers.
- Two kinds of gherao:
o Ordinary- encirclement/blockade of industrial establishment- including office factory workshop or
residence- generally a person of managerial position- complete or partial.
o Gates/Doors are blocked, preventing engress and ingress- might be on a public thoroughfare/land belonging
to industrial establishment- encirclement in depth- forcible possession of the industrial establishment and
ouster of the real owner/manager.
o Court defined it as a physical blockade of a target (may be place or person- usually managerial staff) either
by encirclement or forcible occupation. This might be complete or partial- invariably accompanied by
wrongful restraint & confinement and sometimes criminal trespass, mischief to person/property and
unlawful assembly.
- Here, the employees gheraod the employers 5-6 times, obstructed the passage of personnel and goods, didn’t even
let them have food, confined to a small space w/o fans. Were beaten, abused and not allowed to answer calls of
nature. Employers called the police, but didn’t come on grounds that they can’t intervene unless under instructions
from Labour Ministry.
- What is Gherao: The issue was whether the Act was done by the employees a gherao or something more than that.
Court said that definition of gherao wasn’t exhaustive- but here there were hostile manifestations- take
crude/obnoxious forms involving mental/physical torture. Object was to compel them to submit to the demands w/o
recourse to the law- violent means- violation of IPC offences.
- Lawful? : unlawful keeping in mind IPC violations.
- Guilty? Must be determined in other proceedings and forums.
- Impugned Circulars: unlawful
- Police failed to discharge duties: Yes, induced by directions/instructions in impugned circulars.
- Held: If a person/group wrongfully confines another person/group, it is elementary that it comes under S-399/340
read with S-341/342 of IPC.
- Case cannot be saved by S-17 of TU or any other provision: “It is clear, therefore, that no protection is available to
the members of a trade union for any agreement to commit an offence. ..When a group of workers, large or small,
combined to do an act for the purpose of one common aim or object it must be held that there is an agreement
among the workers to do the act and if the act committed is an offence, it must be similarly held that there is an
agreement to commit an offence.”
- “Sections 17 and 18 of the Indian Trade Unions Act grant certain exemption to members of a trade union, but there
is no exemption against either an agreement to commit an offence or intimidation, molestation or violence, where
they amount to an offence. Members of a trade union may resort to a peaceful strike, that is to say, cessation of
work with the common object of enforcing their claims. Such strikes must be peaceful and not violent and there is
no exemption where an offence is committed”
- “Therefore, a concerted movement by workmen by gathering together either outside the industrial establishment or
inside, within the working hours is permissible, when it it peaceful and does not violate the provisions of law But
when such a gathering is unlawful or commits an offence then the exemption is lost Thus, where it resorts to
unlawful confinement of persons criminal trespass of where it becomes violent and indulges in criminal force or
criminal assault or mischief to person or property or molestation or intimidation, the exemption can no longer be
claimed.”

Rangaswami v Registrar of Trade Unions AIR 1962 Mad 231 – registration

- Petition under S-11 of TU Act seeking to set aside the order of the Registrar of Trade Union, Madras, refusing to
register the union of employees of the Madras Raj Bhawan as a trade union under the TU Act.
- Employment included persons doing domestic and other services, maintenance of Gov. household, attending to his
family’s and guests needs.
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 - Two main categories of employees:
o Those whose services are more or less domestic in nature. Their services are pensionable and governed by
certain rules framed by the Govt. (102 workers)
o Those who formed part of the work charge establishment consisting of gardeners. Not pensionable, but gratuity
given. (33 workers)
- Object: better service conditions and facilitation of collective bargaining. Applied claiming services not to be purely
domestic service and so could be registered.
- However, Registrar felt that before a Union was to be registered, members must be connected with a
trade/industry/business of an employer (S-4 TU) and here that wasn’t fulfilled.
- Judge opined that we must look at Section 2(h) that defines the term Trade Union because the term workmen have not
been independently defined in the Act. But in the definition of the term ‘trade dispute’ the definition of the term
workmen is found would prima facie indicate that it was intended only for interpreting the term trade dispute.
- So, in order to understand the scope of a trade union industry amounting to trade or business must be understood as a
commercial undertaking. Industry u/s 2(j) was a wider concept than trade or business. Industrial Disputes Act and Trade
Unions Act cannot be read together as forming one system and interpreting one in light of another and construing a
wider meaning would include even services rendered by a servant purely in a personal or domestic matter or in a casual
way. This cannot be intended to include service rendered in whichever capacity or reason.

- Therefore, mere personal service however organized, would not possibly be an undertaking under the meaning of the
Act. So rejection was correct.

Bokajan Cement Corpn Employees’ Union v Cement Corpn of India Ltd. (2004) 1 SCC 142 - membership
- Whether an employee as a result of cessation of employment would lose his right to continue as a member of the Trade
Union? (S-6(e) of TU)
- In view of the provisions in the Constitution of the trade union and in the absence of any provision providing for
cessation of membership on employment- cannot be held that an employee would cease to be a member of the TU on
termination of his employment.
- The idea is to promote workers’ rights and should be done so liberally. We must construe these liberally. Once you
become a member, you become a member for life. All you have to do is put down cessation for TUs.

Balmer Lawrie Workers Union, Bombay v Balmer Lawrie and Company Ltd (1985) I LLJ 314 – (Recognition)
- 2 unions of workmen employed in Balmer are at loggerheads and inter se rivalry.
- A- (non-recognized union)- filed Writ challenging the constitutional validity of S-20(2) read with Schedule 1 of
Maharashtra Recognition of TU & Prevention of Unfair Labour Practices Act- impleaded recognized trade union. (A-
19- can’t compel them to join the recognized union)
- Background Facts:
o A settlement was arrived at b/w employer and recognized union resolving a number of pending disputes.
(Clause 17- Arrears to be paid within 2 months from signing the settlement- Co. will collect 15% of gross
arrears payable to each employee as contribution to the Union Fund within 3 days)
o Non-recognized union had an issue with this and informed employer not to do this as compulsory deduction
was unfair and unconstitutional to the non-members.
- Court held that where there are multiple unions, the union with the largest membership of workmen will be clothed with
the status of recognized union—and sole bargaining agent—Why? Assumption that recognized union represents all the
workmen in the industrial undertaking or in the industry.
- What the Representative Union must keep in mind?
o Obligatory to act in a manner as to not discriminate b/w members and other workmen of undertaking who are
not members.
o The settlement in question was binding on all workmen of undertaking.
o Neither the representative union nor the employer can discriminate b/w members of representative union and
other workmen wrt both benefits, advantages, disadvantages or liabilities arising out of settlements in any
proceeding- to which representative party shall be equally applicable to each workman in undertaking.
- No trace of discrimination b/w members and non both as regards advantages and as regards obligations and liabilities.

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Vidyasagar Institute of Mental Health v Hospital Employees Union (2006) ILLJ 781 (Del) – demonstration, immunity, strike
- P (hospital) filed suit restraining D (Employees Union) from holding any demonstration and from blocking the ingress
and egress of any person visiting the hospital.
- P also sought declaration that strike threatened by D was illegal. (Here D threatened that if demands weren’t made
between them, they would go on strike)
- Court- D can’t be allowed to disrupt activities, functioning, ingress/egress of visitors and patients and create nuisance
by raising slogans near hospitals where patients need peace and solitude. Peaceful demonstration is fine.
- Strike was held illegal and injunction granted for restraining the D’s from holding any demonstration, dharnas, slogan
shouting and blocking- but allowed to peacefully do so 200m from radius of hospital.
- The court relied on a bunch of principles and held that the strike/demonstration is illegal.
o Civil Court has the jurisdiction to entertain suit of this nature
o Immunity given under Section 18 does not extend to conduct those acts, which may amount to an offence.
o Peaceful demonstration is a fundamental right.
o It is a legitimate right to make legitimate demands. Trade Union has the right to make demands in a peaceful
manner.
o No right to hold demonstrations at the residence of the employer.
o Demonstrations cannot be violent or intimidating in nature.

Bharat Kumar v State of Kerala AIR 1997 Ker 292 – Bandh

- P seeks relief of declaration that calling for and holding of what is a ‘bandh’ is unconstitutional and hence illegal- FR
violation and DPSP.
- P’s argue that by calling a bandh citizens are prevented from attending to their avocations and traders from opening and
attending to work in factories- leading to loss in production resulting in national loss. They also indulge in violent acts
of vandalism of Govt. property – also cars etc.
- P’s argue that it is a right- democracy.
- Held:
o No political party/organization can claim that it is entitled to paralyze the industry and commerce in the entire
State and prevent the citizens from exercising their FR’s or performing their duties for the benefit of the State.
o Unreasonable and illegitimate exercise of FR.
o Unconstitutional since not in interest if nation, but tend to retard the progress.
o Destruction of private and public property- provided to compensate- State can’t recoup the loss.
o Therefore unconstitutional, petition allowed.
- We have the freedom of expression- so we do it via bandh. Court said that ya okay, but not in such a way that it
infringes the FR of someone else. It has become synonymous with violence.

Communist Party of India v Bharat Kumar (1998) 1 SCC 201

- Whether HC was justified in holding distinction b/w bandh and general strike?
- Held:
o Yes, there is a well-made out distinction.
o Bandhs affect the FR’s of citizens as whole- and this can’t be subservient to FR of one person. Strikes on the
other hand are not so detrimental to FR’s to society at large.

Kameshwar Prasad v State of Bihar AIR 1962 SC 1166 – Demonstration by govt servants
- Constitutional Validity of r.4-a which was introduced into the Bihar Govt. Servants’ Conduct Rules by a notification of
the Gov. of Bihar: “No Govt. servant being allowed to participate in any demonstration/strike in connection with any
matter pertaining to his conditions of service.”
- Held:
o Allow the appeal in part and grant declaration that rule in the form in which it is now is violative of the A’s
rights under 19(1) (a) and (b) and should be struck down.
o Only necessary that the rule in so far as it prohibits the strike cannot be struck down since there is no FR to
resort to strike.
- Then why have a separate Article only for them? If the demonstration is a peaceful one that will be allowed, but if it’s
violating any law, that won’t be allowed- A-33.

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Appropriate Govt.
Steel Authority of India Ltd. v National Union of Water Front Workers (2001) 7 SCC 1
- What is the true and correct import of the expression- “appropriate government” mentioned in Clause (a) of S-2(1) of
the Contract Labour Regulation and Abolition Act.
- It defined it as “any industry carried on under the authority of Central Govt.” implied that there was a lack of
conferment of power or permission by the CG to the Govt. Company or undertaking could disable such
company/undertaking to carry on industry in question.
- However, being instrumentality/agency for the CG did not itself amount to having authority of CG to carry on that
particular industry.
- Court had to be satisfied that particular industry in question was carried on by or under authority of CG.

Industry
Evolution of the Legislation:

● Trade Disputes Act, 1920

➔ Court of Inquiry and Conciliation Boards
➔ Strike was illegal
➔ Forbade strike in public utility services
➔ No provision for settlement of disputes
● Trade Disputes Act, 1929
➔ State intervention in the settlement of disputes
➔ Armed Government with powers
➔ Special provisions with regard to PUS and general strike affecting the community as a whole.
➔ Conciliation machinery for peaceful settlement of dispute only ad hoc conciliation boards and COI.

● 1938 Amendment of Trade Disputes Act

➔ Powers to AG to intervene in industrial matters.
➔ Appoint industrial tribunals and to enforce the award of the tribunals on both the sides.
➔ For speedy remedy- referring disputes compulsorily to adjudication or conciliation. Making the awards legally binding
on parties. Prohibiting strikes or lockouts during the pendency of conciliation proceedings and for two months.
➔ Rule put a blanket ban on strikes which did not arise out of genuine trade disputes
➔ Defence of India Rule 81 A
● IDA in 1947
➔ It became the important step forward in the development of the industrial law in the country.
➔ Large volume of decisional grist grew in the field of industrial adjudication as the tribunals created under these rules
adjudicated a large variety of industrial disputes.
➔ The Industrial Disputes Bill was introduced in the Central Legislative Assembly in 1946 and was passed in March 1947
and it became law with effect from 1 April, 1947
➔ It included all the essential principles of Rule 81 A of the Defence of India Rules and Trade Disputes Act, 1929-
investigation and settlement of industrial disputes.
➔ Industrial Employment Standing Orders Act, 1946
Objects of the IDA

Justice Krishna Iyer in Life Insurance Corp. of India v. DJ Bahadur, 1980:

“IDA is a benign measure which seeks to pre-empt industrial tensions, provides the mechanics of dispute resolutions and set up
the necessary infra-structure so that the energies of partners in production may not be dissipated in counter-productive battles
and assurance of industrial justice may create a climate of goodwill.”

- Promotion of measures for securing and preserving amity between employer and workmen.
- Investigation into and the settlement of industrial dispute
- Prevention of illegal strikes and lockouts
- Providing relief to workmen in matters of lay off and retrenchment.
- Ensuring collective bargaining.
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Machinery for Settlement of Industrial Disputes

- Collective Bargaining
- Mediation and Conciliation
- Investigation
- Arbitration
- Adjudication
Collective Bargaining in India

- Supreme Court defined collective bargaining as the technique by which dispute as to the conditions of employment is
resolved amicably by agreement rather than coercion.
- Process of discussion and negotiation between employer and workers relating to terms of employment and working
conditions.
- Workers are represented generally trade unions.
- Effective system as it usually results in employers undertaking actions to resolve issues of the workers. However, the
legal procedure to pursue collective bargaining in India is complicated.
Stages of Collective Bargaining

- Charter of Demands- typically contains issues relating to wages, bonuses, working hours, benefits, holidays etc.
- Negotiation- trade union and employer engage in debates and discussions pertaining to the demands. If the demands are
rejected, the trade union may decide to go on a strike. Process is usually long.
- Collective bargaining Agreement- bipartite agreements, memorandum of settlement or consent awards.
- Strikes- If parties fail to reach an agreement, the union(s) may go on strike. IDA provisions for the strike are to be
followed.
- Conciliation- Conciliation officer is appointed to investigate the dispute, mediate and promote settlement. Or a board of
conciliation may also be appointed. Conclusion of the proceeding- settlement/no settlement/reference to labour court or
industrial tribunal.
- Compulsory Arbitration/Adjudication by Labour Courts, Industrial Tribunals. Parties may also go for voluntary
arbitration.
Legal Provisions: Section 2(j)

Jurisprudence: Industry

Tools of Statutory interpretation to be kept in Mind for definition of Industry- noscitur a sociis

1950-1963- Wide interpretation to ‘Industry”

D.N. Bannerji v. P.R. Mukherji 1953 SCR 302

- Whether municipality is an industry?
- Held, undertaking has to be read analogous to carrying on trade or business. Though the word ‘undertaking’ in the
definition of ‘industry’ is wedged between business and trade on one hand and manufacture on the other, and though
therefore it might mean only a business or trade undertaking, still it must be remembered that if that were so, there was
no need to use the word separately from business or trade. The wider import is attracted even more clearly when we
look at the latter part of the definition which refers to "calling, service, employment, or industrial occupation or a
vocation of workmen." " Undertaking " in the first part of the definition and " industrial occupation or avocation " in the
second part obviously mean much more than what is ordinarily understood by trade or business.
- The very idea underlying the entrustment of such duties or functions to local bodies is not to take them out of the sphere
of industry but to secure the substitution of public authorities in the place of private employers and to eliminate the
motive of profit-making as far as possible. The undertaking or the servicewill still remain within the ambit of what we
understand by an industry though it is carried on with the aid of taxation, and no immediate material gain by way of
profit is envisaged.

Corporation of the City of Nagpur v. Employees, 1960

- Held, the definition of ‘industry’ in the Act is very comprehensive. It is in 2 parts: one part defines it from the
standpoint of employer and the other part from the standpoint of the employee. If an activity falls under either part of
the definition, it will be an industry.
- Activity shall be organized one and not that which pertains to private or personal employment,
10
 - If service rendered by corporation is an industry, the employees in the departments connected with that service, whether
financial, administrative or executive would be entitled to the benefits of the Act.
- The regal functions prescribed as primary and inalienable functions of the state though statutorily delegated to a corp.
are necessarily excluded from the purview of the definition. Such regal functions are confined to legislative power,
administration of law and judicial power.
- If a department of municipality discharges many functions, some pertaining to industry as defined in the Act and other
non-industry activities, the predominant functions of the dept. shall be the criterion for the purposes of th the act.

State of Bombay v. Hospital Mazdoor Sabha, 1960

- Whether hospital is an industry?
- Held, that hospital is an industry for the purpose of retrenchment and reinstatement of employees.
- The object and the scope of the Act, as apparent from its various provisions, made it amply clear that the Legislature in
defining the word 'industry' in s. 2(j) of the Act was deliberately using term of wide import in its first clause and
referring to several other industries in the second in an inclusive way obviously denoting extension. In construing the
definition, therefore, it is inappropriate to apply the maxim noscitur a sociis so as to restrict its meaning. The maxim is
a rule of construction and can apply only where the intention of the Legislature in associating terms of wider import
with those or narrower import or the meaning of the wider terms used is in doubt.
- Nor can undue importance be attached to the conventional meaning attributed to trade or business in construing the
wide words of the definition since it has lost some of its force and can no longer be wholly valid for the purpose of
industrial adjudication in a modern welfare state. It is clear that the presence of a profit motive or the investment
of capital, traditionally associated with notion of trade and business, can be no indispensable requisite for an
industry under S. 2(j) of the Act.
- What is an undertaking analogous to trade or business? The working principle should be that any activity systematically
and habitually undertaken for the production or distribution of goods or for the rendering of material services to the
community or a part of it with the help of employees organised or arranged in the manner of a trade or business in
such an undertaking.

1963-1978- Narrowing the scope.

University of Delhi v. Ramnath, 1963
- The SC held that Delhi University is not an “industry”. The work of imparting education is more of a mission and a
vocation than a profession or trade.
- Teachers, the whole body of employees responsible for providing education do not come under the def. of workmen
under S. 2(s), hence outside the purview of IDA. The subordinate staff may fall under S. 2(s). However, in the main
scheme of imparting education, the subordinate staff with function like those of the respondents(drivers) play such a
minor, subsidiary and insignificant part that it would not be reasonable to allow the work of this subordinate staff to
lend its industrial colour to the principal activity of the University which is imparting education.
- If the scope of IDA is enlarged to cover educational institutions this might have an adverse effect on the discipline of
these institutions.
- Again if the def. is interpreted broadly there would virtually be no organized activity which could be excluded from the
scope of def.

Madras Gymkhana Club Employees Union v. Management of the Gymkhana Club, 1967

- Facts: The object of the club was to provide venue for sports and game and facilities for recreation and entertainment.
The club also had a catering department which provided food and refreshment generally and for special occasions.
- Held: the club was held to be not an industry.
- The cardinal test is to find out whether there is an industry according to the denotation of the word in the first part. But
the second part standing alone cannot define 'industry'.
- In the present case, the activity of the club is conducted with the aid of employees who follow callings or avocations.
But taking the first part of the definition and the essential character of the club, the activity of the club cannot be
described as a 'trade' business or manufacture' and the running of clubs is not the 'calling' of the respondent club or its
managing committee. Also, the club has no existence apart from its members. It exists for its members though
occasionally strangers also take benefit from its services. Even with the admission of guests, the club remains a
members' self-serving institution. Though the material needs or wants of a section of the community is catered for it is
not done as part of trade or business or as an undertaking analogous to trade or business.

11
Management of Safdarjung Hospital v. Kuldip Singh, 1970

- It was held that a Government Health Dept. is not an industry. Industry hasbeen accepted to mean only trade and
business, manufacture, or undertaking analogous to trade or business for the production of material goods or wealth and
material services.
- Professions must be held outside the ambit of industry.A profession ordinarily is an occupation requiring intellectual
skill, often coupled with manual skill. Thus a teacher uses purely intellectual skill while a painter uses both. In any
event, they are not engaged in an occupation in which employers and employees co-operate in the production or sale of
commodities or arrangement for their production or sale or distribution and their services cannot be described as
material services.
- Material services are not services which depend wholly or largely upon the contribution of professional knowledge,
skill or dexterity for the production of a result. Material services involve an activity carried on through co-operation
between employers and employees to provide benefit to the community.
National Union of Commercial Employees v. M.R. Meher, Industrial Tribunal, Bombay, 1962

- The work of solicitors is not an industry.

- A person following a liberal profession does not carry on his profession in any intelligible sense with the active co-
operation of his employees, and the principal, if not the sole, capital which he brings into his profession is his
special or peculiar intellectual and educational equipment.
1978- Bangalore reversed this trend- wide interpretation given again + test laid down.

Bangalore Water Supply and Sewerage Board v A.S. Rajappa (1978) 2 SCC 548
- Issue: Whether BWSSB will fall under the definition of ‘industry’+ what is an ‘industry’ under ID Act? Judges behave
like legal crusaders and go into the depths and dig out what ‘industry’ really is.
- Industry under S-2(j) has a wide import:- (Triple Test)
o one where there is a systematic activity
o organized by co-operation b/w employer and employee (the direct and substantive element is commercial-
on its own trip)
o for production and distribution of goods and services calculated to satisfy human wants and wishes (not
spiritual/religious but inclusive of material things/services geared to celestial bliss- eg- making of large scale
prasad.)
o Absence of profit motive or gainful objective is irrelevant (be the venture in public, joint sectors etc.)
o The true focus is functional and decisive test is the nature of the activity with special emphasis on employer-
employee relations.
o If the organization is a trade/business it doesn’t cease to be one because of philanthropy animating the
undertaking.
- Although S-2(j) uses words of widest amplitude in its two limbs- their meaning cannot be magnified to overreach itself.
o ‘Undertaking’ must suffer a contextual and associational shrinkage, so also, service calling and the like.
o This yields the inference that all organized activity possessing triple elements, although not trade/business may
still be ‘industry’ provided the nature of the activity (namely, the employer-employee basis bears resemblance
to what we find in trade/business. This takes into the fold of ‘industry’ analogous to the carrying on of ‘trade or
business’. Application of noscitur a sociis- in the words of Krishna Iyer J.-”Birds of a feather flock together”
o All features, other than the methodology of carrying on the activity viz. in organizing the co-operation between
employee, may be dissimilar. It does not matter, if on the employment terms there is analogy.
- Application of these guidelines should not stop short of their logical reach by invocation of creeds, cults or inner sense
of incongruity or ouster sense of motivation for or resultant of the economic operations.
o The ideology of the Act being industrial peace, regulation and workmen- the range of this statutory must inform
the reach of the statutory definition.
o Nothing less, nothing more- consequences are:
▪ Professions
▪ Clubs
▪ Educational Institutions
▪ Co-operative
▪ Charitable Projects
▪ Other kindred adventures.
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 ▪ If the above activities fulfill the triple tests, they will come under industry. The exception is -
professions, clubs, co-operatives, gurukulas and little research labs may qualify for exemption if in
simple ventures substantially and going by the dominant nature criterion, no employees are entertained
and only marginal employees are hired without destroying the non-employee character of the unit.
o If in a pious or altruistic mission many employ themselves free or for a small honoraria- drawn by sharing in
the purpose/cause- such as lawyers running free legal aid free or at nominal costs and those who serve are not
engaged for remuneration or on the master-servant relationship basis- then it is not an industry even if stray
servants (manual or technical) are hired.
o However, other undertakings like acts of generosity or development projects are not saved by ‘industry’.
o Cases overruled- (1) Gymkhana- because all services and goods were produced by hiring employees for wages
and not by members. Triple test satisfied. (hence non- employee character destroyed). (2) University of Delhi-
The integrated nature of the activities shows that the dominant nature is that of an industry, though teaching
staff not “workmen”. Education is a service for the community, rejected that education is not a service since it
is a mission for development of the nation. (3) Safdarjung Hospital- overruled because no difference between
material and intellectual services. Industry as long as there is production of goods and services.
- Dominant Nature Test
o Where a complex of activities (some which qualify for exemption, others don’t) involves employees on the total
undertakings some of whom are not ‘workmen’ are not producers of goods if isolated- even then- the
predominant nature of the service and the integrated nature of the depts. Will be ‘industry’ although those
workmen may not benefit by the status.
o Sovereign function- strictly understood alone qualify for exemption- not the welfare activities or economic
adventures undertaking by the govt./stat body.- sovereign functions=primary inalienable functions of a
constitutional government.
o If depts. discharging sovereign function are units substantially severable, then come within S-2(j).-severability
test.
o Constitutional and competently enacted legislative provisions may well remove from the scope of the Act-
categories which otherwise may be covered.
Krishna Iyer opinion on: 1) Solicitors, 2) Doctors 3) domestic servants etc. -The result of this discussion is that the solicitors'
case is overruled. However, a single lawyer, a rural medical practitioner or urban doctor with a little assistant and/or menial
servant may ply a profession but may not be said to run an industry. That is not because the employee does not make a
contribution nor because the profession is too high to be classified as a trade or industry with its commercial connotations but
because there is nothing like organised labour in such employment. The image of industry or even quasi-industry is one of a
plurality of workmen, not an isolated or single little assistant or attendant. There would not really exist an industrial dispute.
For this reason, which applies all along the line, to small professions, petty handicraftsmen, domestic servants and the like, the
solicitor or doctor or rural engineer, even like the butcher, the baker and the candlestick maker, with an assistant or without,
does not fall within the definition of industry. In regular industries, of course, even a few employees are enough to bring them
within sec. 2(s). Otherwise automated industries will slip through the net.

Are Charitable Institutions Industries ? Three categories of charitable institutions exist-The first is one where the enterprise, like
any other, yields profits but they are siphoned off for altruistic objects. The second is one where the institution makes no profit
but hires the services of employees as in other like businesses but the goods and services, which are the output, are made
available, at low or no cost, to the indigent needy who are priced out of the market. The third is where the establishment is
oriented on a humane mission fulfilled by man who work, not because they are paid wages, but because they share the passion
for the cause and derive job satisfaction from their contribution. The first two are industries, the third not. All three have
employer-employee relationship, all three produce goods and services. However, wrt first category-the application of the
income for philanthropic purposes, instead of filling private coffers, makes no difference either to the employees of to the
character of the activities, wrt to second- Charity operates not vis-a-vis the workmen in which case they will be paying a
liberal wage and generous extras with no prospect of strike.The beneficiaries of the employees charity are the indigent
consumers. wrt to third category- Not that the presence of charitable impulse. extricates the institution from the definition in
Sec. 2(j) but that there is no economic relationship such as is found in trade or business between the head who employs and the
others who emotively flock to render service. In one sense, there are no employers and employees but crusaders all.

13
Physical Research Laboratory v K.G. Sharma (1997) 4 SCC 257- important for emphasis on commercial nature- May have a
question on examining the importance of commercial nature in earlier and subsequent jurisprudence.
- R appointed by PRL as Scientific Glass Blower (1948-76) then transferred to Photography Documentation Services-
post which was non-technical and administrative.
- Asked to retire at 58 and not 60-writ-rejected- complaint to Labour Commissioner.
- Whether it constituted being an ‘industry’?
- PRL is an institution under the Govt. Dept. of Space- engaged in pure research in space science. Labour Court had
recorded a finding that research work carried on by PRL is not connected with production supply or distribution of
material goods/services + not for the benefit/use of others—occasionally published but never sold—therefore, no
material to prove commercial value.
- Not industry:
o Object: not to satisfy human wants/needs.
o More an institution discharging govt. functions and domestic rather than commercial enterprise.
o Even though systematic manner with help of employees- not- not producing/distributing services intended to
satisfy human want.

General Manager Telecom v A Srinivasa Rao (1997) 8 SCC 767

- Contention of A: Reference incompetent since Telecommunication Dept. is not an ‘industry’.
- The matter came up due to reference by a two-judge bench which doubted the correctness of the earlier two judge bench
decision of this Court in Sub-Divisional Inspector v. Theyyam Joseph 1 . Another case came a year later, Bombay
Telephone Canteen Employees’ Assn. v. Union of India 2 which took the same view as Theyyam Joseph.
- Which definition will apply- pre 1982 amendment definition will apply.
- Theyyam Joseph held: Postal department not an industry- w/o referring to BWSS- held that it is a sovereign function.
- Bombay Canteen-Telephone Nigam also not industry- applied Theyyam Joseph. Held that a strict application of BWSS
will be catastrophic.
- Overruled- the aforementioned cases- direct conflict with BWSS- BWSS is the law of the land.
- It was for being engaged in commercial activity- Dept. was not engaging in discharging any sovereign functions of
State.

All India Radio v Santosh Kumar (1998) 3 SCC 237

- Whether the AI Radio and Doordarshan are ‘Industries’ within the meaning of ID.
- R’s were employees- clerks or linemen/watchmen and other casual workers working as employees of either AIR or
Doordarshan kendras.
- Challenged their orders of termination or non-regularisation was granted by the first Court, and then appeal against that
order was dismissed by the HC
- Appeal was they discharge sovereign functions of the State and therefore are not industries.
- However, not classified as sovereign functions as they carry on commercial activity for profit by getting commercial ads
telecast or broadcast through their various kendras and stations by charging a fee. Ads and serials being telecast for
appropriate charges.
- BWS case specifically mentions that absence of a profit motive doesn’t make a difference but this is a case dealing with
the commercial nature of the function.

Coir Board, Ernakulam and Cochin v Indira Devi (1998) 3 SCC 259
- Whether ‘Coir Board’ is an Industry according to the ID Act.
- Facts:
o A was set up under the Coir Industry Act, 1953, for the development of the coir industry + purpose to levy a
customs duty on coir fibre, yarn and products exported from India.
o Coir Board had employed certain temporary clerks and typists who were discharged.
o Claim: Services could only be terminated under the ID Act provisions.
- Rule
o One view held that the widest possible connotation should be given to the word ‘industry’ since ID Act was
welfare legislation for the welfare of workers.
o By eliminating “profit maximization” as the ultimate aim of industries, charitable hospitals giving free
medicines also within the ambit. This is problematic because they are unable to cope with the requirements of
14
 ID- led to cessation of many welfare activities- depriving general community of considerable benefit and
employees of their livelihood.
o Another view: Slightly more rigid- Educational Institution was not industry.
o Uncertainty in applying landmark case of Bangalore Water Supplies, so necessary to re-examine it.
o Instead of leading to industrial peace and welfare of the community (extended def. of industry), the application
of ID to organizations which weren’t intended to be set up under the machinery of the Act may do more damage
than good- not just to the organizations but also the employees (jobs).
- Application
o Function of Coir Board is to promote coir industry, open markets for it and provide facilities to make the coir
industry’s market more marketable- not set up to run any industry itself.
o Applying Bangalore, it would be called ‘industry’
▪ It is an organization where there are employers and employees
▪ The organization does some useful work for the benefit of others.
- Court held, however, that such a sweeping test was not contemplated by ID Act and not every organization which does
useful work and has employees should be an industry.

Agricultural Produce Market Committee v Ashok Harikuni (2000) 8 SCC 61

- Issue: Whether A established under State Act is an ‘industry’. If yes, will the employee of the State Act be governed by
the Central Act? Also, whether the State Act would override the Central Act because State Act received assent of
President of India.
- Merely because an enterprise is statutory it would not take it outside the ambit of ‘industry’- mere fact that some
employees are govt. servants would make no difference.
- The true test is to find out dominant object for which functionaries are working.
- None of the activities of A are sovereign in nature, so within definition of industry.
- Sovereign functions- may have very wide ramification but essentially sovereign functions are primary inalienable
functions which only the State could exercise (taxation, police power)
- Object, Reasons and scheme of the Act- here clearly being regulation and control of trading of agricultural produce-
therefore not sovereign. Here, the Preamble, statement of objects and reasons and provisions of the State Act made it
clear that the Act dealt with various facets of regulating activities within the market area with respect to trading in
agricultural produce.
- Any enactment/scheme which helps in trading activity is one of the State’s essential functions towards welfare
activities. But these can be done by an NGO or private person as well.
- Hence, none of the activities which the Market Committee performed fall within the ambit of sovereign/inalienable
functions of State. So, an ‘industry’.

State of UP v Jai Bir Singh (2005) 5 SCC 1

- Whether Social Forestry Dept. is covered by ‘industry’?
- Employees contended that the decision in BW has been binding precedent for 23 years- complete satisfaction of all in
industrial field- so shouldn’t refer.
- However Court felt that there were compelling reasons to reconsider:
o Wasn’t a unanimous decision- of majority- 2 concurring.
o Majority opinion was only temporary till the Legislature came in to remove vagueness.
o Worker-oriented approach in construing ‘industry’- unmindful of employer and public- aim of statute is to
regulate and harmonize the relationships b/w employers-employees- might have done more damage than good.
o Large number of industrial and labour claims resulting in granting huge amounts of back wages for past years
or workers who had allegedly been retrenched.
o Might be detrimental to private industries.
o Lawyers- even if a modicum of employment is generated- shouldn’t come under Act.
o Sovereign function- should be comprehended to include public welfare activities which the Govt. undertakes as
part of discharge of its constitutional obligations- falling outside ‘industry’.
o So, reconsider now!

15
Industrial Dispute Case
Three Parts- 1) There must be a dispute/difference, 2) The dispute must eb b/w employer-workmen, workmen-workmen or
employer-employer.

Workmen of Dimakuchi Tea Estate v DTE AIR 1958 SC 353

- Mr. B was appointed as the Asst. Medical Officer on three months probation. However post three months his services
were terminated on grounds of medical incompetence. He not being a workman, can he bing a claim under IDA?
- “Any person” not co-extensive with any workman-potential or otherwise.
- Test: community of interest and person regarding whom dispute is raised must be one in whose
employment/non/terms/conditions the parties to the dispute have a direct or substantial interest.
- Whether or not this direct and substantial interest has been met with? (Depends on facts and circumstances)
- “Any person”- S-2(k)- must be read subject to such limitations and qualifications as arise from the context—limitations
being:
o Dispute must be a real dispute b/w the parties to the dispute so as to be capable of settlement or adjudication by
one party to the dispute giving necessary relief to the other.
o Employment/terms/conditions, the parties to the dispute have a direct or substantial interest w/o which can’t be
a real dispute.
- Here, A was not held to be a ‘workman’

Workmen v Dharampal Premchand (Saughandi) AIR 1966 SC 182

- R- firm- carries on business as perfumers and tobacconists in Delhi.
- 28th July, 1961- R passed impugned order dismissing the services of 18 employees (left with 45)
- 16th July- 18 who were dismissed had become members of the Mercantile Employees’ Association which is a registered
TU in Delhi.
- 29th- they took up the cause of the dismissed employees and carried the dispute before Conciliation Officer- failed-
reference on 6th Sept.
- In dealing with industrial disputes, industrial adjudication is reluctant to lay down any hard and fast rule or adopt any
test of general/universal application- necessarily to be pragmatic and the test it applies and consideration on which it
relies would vary from case to case.
- Individual v. Industrial Dispute: whether union has representative character- as long as enough workmen re members of
the outside trade union- they can represent them. These 18 workmen could have formed a group of workmen on their
own if they were dismissed on the same day.
- Only limitations: the dispute must be real- the parties to the dispute must have direct and substantial interest in the
employment or non-employment of the concerned workman/employee.
Position post 2A is different.

Workmen cases
Three parts to the definition under 2(s)-1) substantive, 2) inclusive and 3) exclusive

Dharangadhara Chemical Works v Management AIR 1957 SC 264

- Rann of Kutch- salt manufacturing- DC appointed Agarias for this purpose.
- Whether they are workmen?
- There’s no factory as such- also they work on a seasonal basis (each A would be given a piece of land to make salt)- no
fixed timings, could employ others.
- Court held: You employ agarias and hold close control over their work and that remains true even though they could do
whatever they wanted to (well, not whatever, but you know!)
- Showed a master-servant relationship as supervisors made sure the procedure was followed.
- Supervision & control test is the prima facie test for determining the relationship of employment- nature and extent?
Case-to-case. If a person is employed by the employer and there is an existence in the right in the employer to control
the manner in which work is to be done, and not merely to direct what work was to be done + due control and
supervision of the employer- when there subsists an employer-employee relationship.

16
 - It was a contract of service since they were manufacturing salt- here you can decide the procedure. A contract for
service you don’t instruct the manner of work to be done. They were working themselves with the help of their family-
just because they got other people to work does not mean it is a contract for service.

Diwan Mohideen Sahib v Industrial Tribunal, Madras AIR 1966 SC 370

- Bidi manufacturing concern- they would give leaves and tobacco to contractor- contractor to workers- workers would
cut the leaves at home and manufacture in c’s factory.
- C was paid minus the cost price of raw materials (this CP mentioned when Diwan gave materials to the contractors- this
never changed). No register was maintained by the contractor and the workmen did not report to work everyday.
- C’s were former employees of the Diwan. Factory Act applied to anyone with more than 9 workers and D was trying to
escape that. There was no real sale because if there was, price would fluctuate.
- Issue: Whether the employees of the contractor are workmen of the company?
- There was control over the manner of production- the co. could reject the product if it was not desired quality- so,
master-servant rule was fulfilled. The contractor was just an agent of the company.
- D’s claim that they were selling raw materials & contractors were selling back finished product did not stand.

Workmen of Nilgiri Cooperative Marketing Society v State of Tamil Nadu (2004) 3 SCC 514
- An industrial dispute was raised by 407 persons; of whom 73 are porters and 335 are graders, the former is assigned
with the task of unloading, unpacking and stitching the gunny bags, whereas the latter weigh, pack and grade the
potatoes. The appellant- Union served a charter of demands upon the Society claiming, inter alia, permanency in service
and other benefits such as drinking water,
toilet, rest-room, maternity benefits, etc. A strike notice was issued, and a conciliation proceeding was initiated. These
workers are employed by third parties and work at the yard on daily wage basis but indisputably, the society pays wages
to them although the
same is reimbursed by the members of the society.
- Issue: whether these they are workmen of the society?
- Held: The graders & porters were held not to be workmen because there was no ‘employment’ even though they
operated from the society’s compound. Society had no control over the working. The fact that the society paid them
didn’t signify employment.
- The Hon’ble SC dismissed the appeal and stated that the due control and supervision test though important cannot be
taken as the determinative test. To establish due control and supervision the court laid down certain relevant factors
which they stated would have a bearing on the result:
- “Multiple Test”
a) who is appointing authority;
b) who is the pay master;
c) who can dismiss;
d) how long alternative service lasts;
e) the extent of control and supervision;
f) the nature of the job, e.g. whether, it is professional or skilled work;
g) nature of establishment;
h) the right to reject.
- The Court further clarified on a letter, the word ‘workmen’ of the Society had been used, in all probability, the said
expression had been used loosely.
- Burden of Proof: The court held that “It is a well-settled principle of law that the person who sets up a plea of existence
of relationship of employer and employee, the burden would be upon him. It further stated that the question whether the
relationship between the parties is one of the employer and employee is a pure question of fact and ordinarily the High
Court while exercising its power of judicial review shall not interfere therewith unless the finding is manifestly or
obviously erroneous or perverse.”

HussainBhai v Alath Factory Employees Union (1978) 4 SCC 257

- Factory- workmen had agreement with contractors—Are they workmen of factory?
- The raw materials, the premises, equipment and end product belonged to the factory.
- Workmen were performing an ‘integral task’ (can be principle tasks or incidental—here it was principle).

17
 - The workers making ropes are depending on the factory for livelihood- so obviously in such a case the dependent
should be the “workmen” of the factory (test by Krishna Iyer- no universal applicability)
- Dubious intermediaries should not dilute this existence of relations b/w workers and factories as all their activities are
directed for the purpose of one enterprise.
- Number of workmen engaged to make ropes from within the factory. According to the P- these workmen were hired by
contractors who had executed an agreement with the P in order to get such work done- therefore, P contended that they
were the contractor’s workmen and not his.
- Rule: Where a worker/group of workers labours to produce goods/services and those are for the business of another,
that other is, in fact the employer. (He continues to have economic control over the workers, subsistence, skill and cont.
employment- if he chokes off, worker is virtually laid off)
- The presence of intermediate contractors with whom alone the workers have immediate or direct relationship ex
contractu is of no consequence when, on lifting the veil or looking at the conspectus of factors governing employment-
therefore, the real employer is the management and not the immediate contractor.
- Myriad devices, half-hidden in fold after fold of legal form depending on the degree of concealment needed, the type of
industry, the local conditions and the like may be resorted to when labour legislation casts welfare obligations on the
real employer based on A-38,39,42,43 and 43-A of the Constitution.

SK Verma v Mahesh Chandra (1983) II LLJ 429 1983 (4) SCC 214
- Whether Development Officer (sales promotion) under LIC is a workman? Undertake tours to procure new business and
tap potentiality of that area and contact policy holders in that area who have allowed their policy to lapse. He also
recruited new agents.
- Employers argue:
o Not industry
o No industrial dispute
o Not workman
- Courts said that the designation of the job didn’t matter and the nature of the work would be looked at.
- The test adopted to exclude employees from the ambit of workmen was to see whether they are a part of the managerial
force. If not, then all labour whether, skilled or unskilled, manual, technical, clerical will be covered under section 2(s).-
pragmatic not pedantic approach
- The appointing authority for the development officers Development Officers and employees of Class III and IV are
employed by the same authority, i.e. Divisional Officer. Based on Scale of Pay and appointing authority, the Court
concluded that “Development Officer is no more than a “glorified designation”. They are on par with subordinate or
clerical staff.
- As per the terms of employment, Development Officer has no discretion. After he trains agents- he has no control over
them- only LIC does. He cannot take disciplinary action against them. He has no subordinate staff.
- When he sells policy, he can only take money for first premium- after this LIC has to chalk out the programme to sell
policies. He was a full-time employee. He cannot accept risk or bind the corporation in any way.
- LIC, therefore, had complete control- “workman”. Did not carry out any administrative or managerial function.

HR Adhyantaya v Sandoz (India) Ltd. (1994) 5 SCC 737

- Issue: whether a medical representative whose job is to promote medicines of companies is a workman?
- Held:
o Promotion of sale is not a job included in the definition.
o The court struck down the argument that their job was ‘skilled’ and ‘technical’. The words have to be construed
ejusdem generis and do not mean sales promotion.
o Also struck down argument that all persons not within the exception are workmen.
- SK Verma wasn’t correctly decided because there are multiple cases were sales employees were not declared to be
workmen. The connotation of skilled in the context must be awarded through ejusdem generis- thus sales promotion
will not fall within that ambit.

SK Maini v M/S Carona Sahu Company Ltd. (1994) 3 SCC 510

- Issue: Whether the Manager of a shoe shop was a workman?
- Held:

18
 o The manager was excluded by the definition anyway, but the substance of work must be looked into and the
responsibility of designation.
o Found that his principle work was indeed that of a manager. He was liable to make credits, take charge of the
shop, keep account of any loss suffered by the company, to notify the company in case of emergency, maintain
proper accounts, the damages caused by the acts of the employees of the shop, responsible for the leave, and
expected to be fully conversant with all the regulations in force. Therefore, due to these reasons the appellant’s
principle function appears to be ,administrative and managerial in nature although he carries clerical work.
o If a person is employing replacements, is it always a managerial job? No, only one of the factors have to be
looked at.
o Not a workman.

Heavy Engineering Corporation v Presiding Officer, Labour Court (1996) 11 SCC 236
- Person appointed 4 doctors on a temporary basis—Whether a medical doctor is a workman?
- Doctor had a nurse, but said his work was ‘skilled and technical’.
- However, the court focused on the fact that he had people under him- therefore- supervisory- to be a workman. Under
his direct control and supervision were male nurse, nursing attendant, sweeper and ambulance driver, who would
naturally be taking directions and orders from the in-charge of the first aid post. These persons obviously could not act
on their own and had to function in the manner as directed.
- Note: This is problematic because his principle job is not supervision but skilled and technical.

Workmen of the Canteen of Coates of India Ltd v Coates of India Ltd. (2004) 3 SCC 547
- Workers in a canteen in a company- work was outsourced to a caterer.
- The company formed a canteen committee- had members who were under the contractor as well + employees of the
company.
- Issue: Whether these workers were contractors or workers?
- The canteen employees were neither directly appointed by the company nor company had any supervisory control over
them and hence, they cannot be treated as workmen employed by the respondent.
- 1: Factories Act required for there to be a canteen, so they are under the company. But Court held that the Factories Act
was irrelevant.
- 2: Working in company’s compound? They are the company’s employees, so they should be workmen- but –
- Not- court held that there was still the presence of an intermediary- so- not workmen.

State Prescription of Standards

Lay off- tool of statutory interpretation is ejusdem generis

Relevant Provisions: Def. S. 2 (kkk), Compensation: Chapter VA (25C to 25E), Exception: S. 25A. Also read S.25B. S. 25
M (Chapter VB-prohibition of lay off).

Adjudication: Unless malafides are alleged and proved, not open for the tribunal to inquire/investigate into the appropriateness
of the Management’s reasons which led to lay. If lay off is mala fide, then it would not be a lay off in the eyes of law. The relief
provided under S. 25 C would not be the only relief available.

The workman is obligated to present himself for work at the establishment from which he has been laid off at the appointed time
during normal working hours at least once a day during the period of lay off before he can be entitled to lay off compensation.
(s. 25 E(ii))

Chater VA does not create a right of being paid compensation to workman before he is laid off. It is independent of the right to
lay off.

Workmen of Dewan Tea Estate v Their Management AIR 1964 SC 1458

- 11 Tea estates- employees laid off for 45 days- contended that it wasn’t justified so they should be paid- Held: lay off
justified.
- The defn of lay off in s. 2 (kkk) is not an operative part of the act and therefore there is no conflict between the defn and
the standing orders.
- If there was a provision in the act specifically providing that an employer would be entitled to lay off his workmen for
reasons prescribed by s. 2 (kkk), it would have been another matter.

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 - Therefore, no force in the contention that s. 2 (kkk) of the Act is wider than the relevant rule in the standing order and
should apply to the facts of the case.
- “Stoppage of supply” in the section is not limited to money and funds.
- Lay off which gives rise to a claim of compensation under s. 25-C would mean lay off as defined in s. 2 (kkk).
- If Standing Orders provide for lay-offs and the manner of compensation- well and good. Otherwise, if lay off is
permitted by Standing orders but the rules for calculating compensation are not covered-S. 25 C will be applicable.
In a case where layoff is not covered by Standing Order, the Act will govern the case and lay off will only be
permissible if one of the factors mentioned in s. 2 (kkk) are present. For such lay off compensation will be provided
under s. 25-C.
- Cannot be held that s. 25-C recognizes the inherent right of the employer to declare lay-off for reasons he deems
sufficient and satisfactory. No such common law right can be spelt out from the provisions of s. 25-C.
- Whether “for any reason” should be construed ejusdem generis- question not considered.

Workmen of Firestone Tyre and Rubber Co. v The Firestone Tyre and Rubber Co. (1976) I LLJ 493 (SC)
- Company laid off certain workmen from its establishment
- Company employed only 30 workmen
- Dispute as to compensation to lay off workmen
- Whether management has right to lay off and whether workmen entitled to any compensation
- Held: Management has no right to lay off
- Act does not confer any right to lay off on management
- Right of management to lay off derived from contract of service or standing order governing establishment
- No standing order or contract of service conferring any right on management to lay off
- Lay off without any power or authority
- Chapter VA of Act does not apply as establishment had no power to lay off
- Workmen entitled to full pay of lay off period but compensation to be decided by Tribunal
- SO: Whether the management of a co. has right to lay off- Must be conferred by standing order. If not mentioned,
no right. Because the act does not recognize a common law right to lay off.
- Grounds for laying off- Mentioned in standing orders. If not mentioned, one of the factors in s. 2 (kkk) should be
present.
- Compensation- Mentioned in standing orders. Otherwise, if lay off in accordance with s. 2 (kkk), compensation will
be available under s. 25-C.

Associated Cement Companies v Their Workmen AIR 1960 SC 56

- The case debated on whether the cement factory and business of limestone quarrying were parts of one establishment.
- Whether the workmen of the cement factory could claim compensation for their lay-off, which was caused by the strike in
the limestone quarrying
- Held: The cement factory and limestone quarrying constituted a single establishment under provisions of Clause (iii) of
Section 25E of the Industrial Disputes Act because the quarry was located close to the factory and was the sole feeder of
the same. So no compensation.
- S. 25- An explanation does not lay down any test to determine what “one establishment” means. The purpose of such
determination is to determine the true relation between various branches and establishments. Difficulty: complexity of
modern industrial organization.
- General tests to determine whether “one establishment”- geographical proximity, unity of ownership, general utility of
purposes, management and control, functional integrity, unity of employment and conditions of employment etc.
- Duality of jurisdiction (Central gov for quarry and state gov for factory) does not imply that they are two separate
establishments.
- Moreover, the strike was called by the same union which consisted of workers of the factory and the quarry. So
disqualification under s. 25-E (iii) came into play and the workmen of the cement factory could not claim compensation
for their lay-off.
Nutan Mills Ltd. v. ESIC 1956

- During the period of lay off the employee would be entitled to go and serve another master. The only result of his doing
so would be that he would be disentitled to receive compensation. But it is entirely a matter of his option whether he
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 should present himself at the office of his employer and thus claim compensation of earn wages under a different
employer and even though he may serve a different employer he would still have the right to be reinstated when the
proper occasion arises. In other words, during lay off, the relationship of master and servant is temporarily suspended
and it would be revived as soon as the lay off is over.

Lockout
S. 2(l).

S. 10(3) and S. 10A(4A) prohibit the continuance of lockout once the dispute is referred to the authority. S. 22 (2) and S.
23 prohibit the commencement of lockout in the circumstances stated therein.

Trade Disputes Act, 1929- S. 2(e): In addition to the present definition had an additional clause (now deleted) describing lock-
out which provided that “such closing, suspension or refusal occurs in consequence of a dispute and is intended for the purpose
of compelling those persons or of aiding another employer in compelling persons employed by him to accepted terms or
conditions of or affecting employment.

Closure of a business due to lockout under S. 2(l) would not come within the scope of layoff under S. 2(kkk).

Lay off Lock out

Generally occurs in a continuing business Closure of a business

Employer unable to give employment to one or more Employer closes the business and locks out the whole body of
workmen workmen for reasons which have no relevance to causes
specified in S. 2(kkk).

Employer liable to pay compensation under S. 25 (C),(D) and No such liability under these provisions. The liability of the
(E) employer would depend on whether lock-out was justified
and legal or not, but such liability is also not invoked under
these provisions.

Kairbetta Estate v Rajamanickam AIR 1960 SC 893

- Nature of lock out: antithesis of strike. Through strike, employees enforce their industrial demands and through a lock out
employers persuade workers through a coercive process to agree with them.
- Liability of employers would depend on legality and justifiability of lock out.
- Where the management was violently attacked and other staff was threatened, lock out was justified.
- Lay off may be due to reasons mentioned in the defn. “Any other reason” must be interpreted in consonance with reasons
already specified.
- Lock out and lay off are different. Lock out: reasons- political, disturbance with workers, establishment is completely
closed, compensation depends on legality and justifiability of lock out. Lay off: reasons- genuine circumstances like
shortage of supply, operations are not completely shut, compensation provided for by s. 25- C, D and E. So lock out under
s. 2(l) cannot be included under s. 2 (kkk) about lay off. The reasons for lockout have no relevance to reasons of for lay off
under s. 2 (kkk).

Retrenchment
Legal Provisions: S. 2(oo) first part exhaustive and second part has four exclusions, 25F (3 conditions for valid retrenchment),
25FF, 25G, 25H, 25N(conditions precedent to retrenchment of workmen- Chapter VB) and 25B. Section 25 L need to be
referred to understand the meaning of ‘industrial establishment’.

Evolution of the Concept: No definition provided in the Trade Disputes Act, 1929. The definition was inserted by the
Industrial Disputes (Amendment) Act, 1953.

Retrenchment only applicable to a ‘live industry’.

The term “any reason whatsoever” has not been defined. Termination due to unauthorized service can be characterized as
retrenchment. Barsi Light Railway Co. Ltd. v. K.N. Joglekar- Discharge of surplus labour or staff by the employer for any
21
reason whatsoever. Santosh Gupta v. State Bank of India: Discharge not due to surplus labour but failure of the workman in the
exam. Management of Karnataka State Road Transport Corp. v. M. Boraiah: Embodies every case of termination of services
except those embodied in the def. Delhi Cloth and General Missl Co. Ltd. v. Shambhu Nath Mukherji: Striking off name of the
workman from the rolls by the management in termination of his service. Punjab Land Development and Reclamation Corp.
Ltd. v. Presiding Officer, Labour Court: Parliament intended many reasons for retrenchment, not just “surplus of workmen”.

Compensation: (1) The requirement of paying compensation is mandatory pre-condition. Non-payment will not only invalidate
the retrenchment but will also attract the penalty under S. 31(2) of the Act. (2) If the retrenchment is proved unlawful, the
workmen has a right to reinstatement with continuity of service and right to wages for such period. (3) If the pre-requisites and
S. 2(oo) are not followed, then the termination would be void ab initio. The workman is entitled to a declaration that the
workman continued to be in service with all consequential benefits and if he was not paid all the benefits including salary, he
shall be entitled to recover the same as arrears. (4) Notice for a month, with reasons or wages in lieu of notice for valid
retrenchment (S. 25 F(a)). Invalid if rule of last come first go not followed (S. 25 G). (5) Compensation is recovered from the
employer either under S. 33-C of IDA Act or the Payment of Wages Act (S. 25F(b)). (6) S. 25 F (C) is not a condition precedent
like clauses (a) and (b). It is intended to keep the government informed about the conditions of employment in the industries
within its area (Bombay Union of Journalists v. State of Bombay). Failure to comply would not invalidate the retrenchment, will
attract a penalty under S. 33(2). Notice should be served after, if not before the retrenchment. (7) Where a workman is entitled
to be reinstated with full back wages but employer prefers to pay compensation instead of reinstating him, it is necessary that
adequate amount of compensation should be paid to him in order to meet justice. E.g.: severe financial condition, employee
found work elsewhere, industry closed down.

Lay Off Retrenchment

No severance of employment, only temporary suspension. Severance of service

For reason stipulated under 2(kkk) For any reason whatsoever (S. 2(oo))

Hariprasad Shiv Shankar Shukla v A.D. Divelkar AIR 1957 SC 121

- While interpreting Act- intention as expressed matters not assumed intention.
- The ordinary meaning of retrenchment is that business itself is continuing though a portion of the staff/ labour force is
discharged.
- “For any reason whatsoever” has to be read with context and merely means that it does not matter why the surplus was
discharged.
- There is no compelling language in the Act which would include bona fide closure of the whole business.
- If retrenchment was held to include closure, it would be against the scheme of the ID Act which assumes existence of
industry.
- Such a meaning would make 25-H redundant.
- Retrenchment as used in s. 2 (oo) and s. 25-FF has no wider meaning than the ordinary accepted connotation of the
word. Retrenchment is: discharge of surplus labour by an employer for any reason whatsoever other than a punishment
inflicted by disciplinary action. Closure of business is not included. And even though transfer of business and closure
of business are different- for this purpose of interpretation of retrenchment, they are both the same and none of them are
included.
- The defects of the judgement were remedied by S. 25FFF which provides compensation on closure.

Uptron v Shammi Bhan (1998) 6 SCC 538

- Provision for automatic termination of services on account of absence is not covered by exception (bb) to s. 2 (oo)
- In this case, the R was a permanent employee of P.
- There was no fixed term contract of service between them
- Since there was no contract, none of the two situations in exception (bb) are covered. 1. No question of service being
terminated on expiry of contract.
2. No question of termination due to stipulation to that effect in contract
- Therefore, the rule of exception was not applicable. R’s termination was retrenchment.

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 - “Liable to automatic retrenchment”- discretion of employer- cannot be unchecked- principles of natural justice and right to
be heard have to be applied especially since she was a permanent employee. She must also be told why she was
retrenched.
- Therefore, retrenchment was improper

Anand Bihari and Others v RSRTC and another 1991 Lab IC 494
- Retrenchment
- Appellants appointed as drivers to drive roadways buses of respondent corporation
- They developed defective eye-sight and were found totally unfit for driving heavy motor vehicles
- Their services were terminated
- The court held that this is not retrenchment as the case is covered under clause (c) continued ‘ill health’ of S. 2(oo). It is
not the capacity in general but that which is necessary to perform the duty for which the workman is engaged, is
relevant and material.
- Not retrenchment, but the employees should be considered for alternative jobs. If alternative jobs not available, then
compensation should be given because the disability arose during the course of employment.
- In view of helplessness shown by the corporation, absence of any provision for compensation in the Employees' State
Insurance Act or in the Workmen's Compensation Act, the court evolved its own scheme of compensation.

Closure
S. 25 FFA (Notice for Closure), S. 25FFF (Compensation for Closure), S. 25 O (Procedure for closing down undertaking-
Chapter VB), S. 25 R (Penalty for closure- Chapter VB).
Closure Must be Real:
- A closure must be genuine and bona fide in the sense that it should be a closure in fact and not merely a pretension of
closing the place of business.
- “An employer has undoubtedly a right to carry on his trade or business or to discontinue it, but if he desires to
discontinue, he must indeed and in fact discontinue it, he must not pretend to discontinue or close down the place of
business temporarily for malafide reasons such as victimization of the workmen and coercing them to accept his own
terms”. The use of the expression “any reasons whatsoever” implies that the reasons for closure are immaterial.
Lockout Closure

No severance of employer-employee relationship Severance of such relationship

Existence and apprehension of an industrial dispute Need not to be due to an industrial dispute

Weapon available for Employer to persuade the workers by Closing the business and thereby ending the bargaining.
coercive process.

Orissa Textiles & Stell Ltd. V State of Orissa 2002 Lab IC 570(SC)
- Examined validity of amended S. 25-O in light of Excel wears case (struck down unamended 25-O) and Meenakshi Mills
case (upheld s. 25-N)
- Contention: Violates Art. 19(6) freedom to carry out business. Only legislature can impose restrictions. Under S. 25 O,
government permission required.
- Held: Constitutional
- Now, govt has to conduct inquiry, give reasons and do so within a fixed period of time. It can’t remain quiet because two
months silence can be understood as acceptance. Refer to S. 25 O (2).
- The amended s. 25- O is saved by Art. 19 (6) because now the govt has to conduct an inquiry and give reasons for its
decisions ‘in public interest’. It can refuse all the reasons given by the employer. All this has to be done within a fixed
time frame. So it is a reasonable restriction. Refer to S. 25 O (2). It is a quasi judicial function since it is application of
mind on objective considerations by the government.
- About “public interest” used in S. 25 O (2) being as vague as it used to be in the unamended section, court said that it is
important to keep it vague in order to give it a wider scope in light of its importance. The phrase doe s not serve and
constitutional infirmity- has been used in the constitution itself. Lot of case law interpretation of the term.

23
 - “May” used in S. 25 O (5) w.r.t to referring/reviewing disputes will be read as “shall”. Remedy also available under Ar.
226 and Art. 32 if any arbitrary action takes place. Review to be disposed off within the reasonable period of 30 days.
- Court compares 25-O with 25-N. Says, 25-N is valid and its elements (compensation, time period, inquiry, objections,
permission from Govt.) have been amended to 25-O.
- About the contention of the employers “if employees can come with objections if permission is given, why can’t
employers come with objections if permission is not given?”- Court said that option is contained in review after one year
which is now read as “shall”.

Constitutionality of Section 25FFF

Hathi Singh Manufacturing Co. Ltd v. UOI 1960
- Held, this section equally applies to all the industries falling within a groups and the classification made is rational to
the object of the enactment. The classification is neither arbitrary nor unreasonable and hence there is no infringement
of Art. 14. So far as violation of Art. 19(1)(g) is concerned, this article itself envisages certain restriction which can be
imposed in the interest of general public. The employer has a fundamental right to carry on or close down his business
especially when such business does yield any profit, but reasonable restriction in the interest of the general public can
still be imposed upon his right to close down the business, and a legislation under S. 25FFF cannot be held to be
unconstitutional on that account.

Strike

Legal Provisions: S. 2(g), S. 10(3) (prohibit continuance of strike by reference to a tribunal or labour court by
appropriate government), S. 10 A(4A)( reference to arbitrator), S. 22 and S. 23( prohibit strike in public utility service
and also refer to industrial est. other than public utility service), S. 24 (illegal strike), S. 25 (prohibits financial aid to
illegal strike), S.26 (penalty for illegal strike), S.27 (penalty for instigation to take part in strike), S.28 (penalty for
financial aid for strike).

Ingredients S. 2(g)
- Industry
- Employer-Employee relationship
- Cessation of work by a body of persons or a refusal to continue to work or to accept employment
- Concerted action
Types of Strike
- General Strike/Primary Strike (stay in, sit down, go slow and pen down strikes- Punjab National Bank v. Their
Workmen).
❏ Go slow not like ordinary strike, recognized as lawful weapon under certain circumstances and is controlled by
provisions of the law. It is a misconduct under Model Standing Orders appended to the Industrial Standing
Orders Act, 1946. Workers are under an obligation to their employers to procure average production and if they
deliberately refuse to give that average, they must be held guilty of the misconduct of ‘go slow’. The case law
dealing with the same is:
➔ Bharat Sugar Mills v. Jai Singh- Actual participation in go slow was serious misconduct and the
management could not reasonably be accused of mala fides or revengefulness if it proposed
punishment of dismissal for such conduct.
➔ SU Motors v. Their Workmen- Go Slow is a serious misconduct and has not been recognized as a
legitimate weapon of the workmen to redress their grievances. Hence, once it it proved those guilty of it
will have to suffer the consequences.
- Secondary Strike
❏ Coercive method adopted by workers
❏ Connected by product or employment
❏ The pressure is not applied on the primary employer, with whom the industrial dispute exists, but against a
person who has some sort of trade relations with him.
❏ The employees of the secondary employer threaten to strike, until the secondary employer refuses to deal with
the primary employer.
- Sympathetic Strike
❏ Purpose of indirectly aiding others
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 ❏ The striking employees having no demand or grievances of their own and the strike having no direct relation to
the advancement of the interest of the strikers.
❏ It is unlawful because it is an invasion of the rights of the employers.
Strike as a Weapon of Collective Bargaining
- The right to strike is labour’s ultimate weapon and in the course of the century, it has emerged as the inherent right of
every worker.
- It is an element which is of the very essence of the principle of collective bargaining.
- It is a powerful weapon of collective bargaining and is generally fraught with the possibility of industrial dislocation,
with all the attendant hardships and evils, the occurrence of which is regarded as one of the powerful levers to being
about agreements.
- A collective strike is economic pressure by cessation of work and not exchange of pleasantries.
- Trade unions with a sufficient membership strength are able to bargain more effectively with the management than
individual workmen.
- This bargaining strength would be considerably reduced if it is not permitted to demonstrate by adopting agitational
methods.
- A strike is a recognized mode of agitation to press home the demand of the workers in the process of collective
bargaining but a strike be resorted to pressurize the management to accede to the demands which they cannot get
lawfully.
- For example, the workers cannot use strike to pressurize the management to pay an additional amount of bonus, apart
from the bonus permissible under the payment of Bonus Act.

Prohibition of Strikes in Public Utility Service

- The Act makes a clear distinction between persons employed in Public Utility Service.
- This is for preventing the workmen employed in public utility services from holding the community at large to ransom
by resorting to lightning strikes.
- A qualification is attached thereto requiring them to fulfill certain additional conditions as enumerated in the four
clauses of S. 22(1) of the Act.
➔ Precise specification of date (notice shall be in Form L) Rule 71 of the Industrial Dispute Central Rules, 1957.
Objective: To make alternative arrangements for running the public utility services vital to the day to day life of
the community in the event of the strikes.
➔ These provisions are mandatory.

Correct Legal Position with regard to Strikes in a Public Utility Service

- No strike can be resorted to without serving a notice of six weeks on the opposite party with a copy to the conciliation
officer.
- The notice notice so served shall remain in force for a period of 6 weeks.
- In any case, the strike cannot be resorted to until the expiry of the first 14 days after the issue of notice, as it is
considered as the ‘cooling off’ period.
- In a situation where the party mentions a specific date in the notice on or after which it intends to strike work, it cannot
resort to strike until the expiry of the said date, notwithstanding the fact the first 14 days stood expired.
- Where the conciliation has failed and the failure report is received by the Government, the party cannot strike work
within 7 days of the receipt of the failure report.
- If the government makes a reference, no strike can be resorted during the pendency of the adjudication proceedings and
within two months after the conclusion thereof.
- If in the rare eventuality of the Government referring the dispute within 7 days after the receipt of the failure report, the
party is free to strike work after the expiry of the 7th day.

Constitutionality of Strike:

All India Bank Employees Association v. National Industrial Tribunal AIR 1962 SC 171
- Issue: Whether the right guaranteed to form a union provided in Art. 19(1)(c) of the constitution carried within it a
concomitant right that the achievement of the object for which the union was formed?
- Held, that the right to form unions guaranteed by Art. 19(1)(c) thus does not carry with it fundamental right in the union
so formed to achieve every object for which it was formed.

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 - Even a very liberal interpretation of Art. 19 (1) (c) cannot lead to the conclusion that the trade unions have a guaranteed
right to an effective collective bargaining.
- The right to strike and right to lockout may be controlled or restricted by appropriate industrial legislation, and the
validity of such legislation would have to be tested not with reference to the criteria laid down in Cl. 4 of Art. 19 but by
totally different consideration.
Kameshwar Prasad v. State of Bihar AIR 1962 SC 1166
- Issue: Whether Rule 4A of Bihar Government Servants Conduct Rules, 1956 prohibiting any forms of demonstrations
and strikes constitutionally valid?
- The court held that a demonstration is a visible manifestation of the feelings or sentiments of an individual, or a group.
It is thus a communication of one’s own ideas to others to whom it is intended to be conveyed.
- There are forms of demonstration which would fall within the freedoms guaranteed by Art. 19(1)(a) and Art. 19(1) (b).
A violent and disorderly demonstration does not come under these clauses. Peaceful and orderly demonstration would
fall within the purview of these clauses is a fundamental right.
- Hence, prohibiting “any forms of demonstration” is violative of the appellant’s rights under Art. 19(1)(a) and should
therefore be struck down.
- It is only necessary to add that that the rule, insofar as it prohibits strike, cannot be struck down since there is no
fundamental right to resort to strike.
BR Singh v. Union of India 1990
- The right to strike has been recognized in almost all democratic countries. Though not raised to the high pedestal of a
fundamental right, it is recognized as a mode of redress for resolving the grievances of workers. But the right to strike is
not absolute under our industrial jurisprudence and restrictions have been placed on it.
TK Rangarajan v Govt of Tamil Nadu AIR 2003 SC 3032 – strike by govt employees
- 2 lakh govt. employees went on strike. Dismissed.
- Employees could have gone to State Admin Tribunal but there was just one man working there. So they were allowed to
approach the HC under Art 226 (extraordinary circumstances)
- Held: There is no FR to strike. Gov employees have no FR or statutory right to strike (duty to society etc.)
- Reinstate with unconditional apology- except employees with criminal charges. + undertaking saying no strikes in the
future
Facts: Revolve around the unprecedented action of the State of TN, which terminated the services of all govt. servants
who resorted to strike for the fulfillment of their demands.
Issue/Challenge? The employees had challenged the validity of the Tamil Nadu Maintenance of Essential Services Act,
2002 and the Tamil Nadu Ordinance No.3 of 2003, both of which allowed the government to terminate the services of 2
lac employees- in Madras HC under A-226/227.
Court: Directed the Govt. through an interim order to allow all the employees to resume work and wait for further
directions with taking into considerations factors like termination without enquiry etc.
Division bench: Reversed the decision saying all other remedies in the administrative tribunal were not exhausted.
SC: No
a. (1) Fundamental Right to go on strike : held time and again- Kameshwar Prasad (strikes invalid since no FR to
resort to strike). All India Bank Employees’ Association v. National Industrial Tribunal (even a very liberal
interpretation to 19 can’t mean that TU have a guaranteed right to effective bargaining or to strike)
b. (2) Statutory/Legal Right, - further there is a prohibition to go on strike under the TV Service Conduct Rules-
includes absence from work as similar activities.
c. (3) Moral/Equitable Justification- cannot claim that they can take the society at ransom by going on strike.
Strikes affect the whole society. In a society filled with unemployment, can’t possibly justify this.
- Comment: PK Padhi is of the opinion this ruling is confined to the government servants only. The author is of the
opinion that the right to strike may be a legal right and such right is available to the workmen governed under the IDA
provided no provisions like S. 22, S. 23, S. 10(3) or 10A(4A) are violated.

Strike- Legal and Illegal vis-a-vis Justified and Unjustified

Crompton Greaves Ltd. v. The Workmen AIR 1978 SC 1489

- Held, in order to entitle the workmen to wages for the period of strike, the strike should be legal as well as justified.
- A strike is legal if it does not violate any of the provisions of the statute.

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 - A strike cannot be said to be unjustified unless the reasons for it are entirely perverse or unreasonable. Whether strike
was unjustified is a question of fact to be determined on the basis of facts and circumstances of the case,
- Use of force or violence or acts of of sabotage resorted to by the workmen during a strike disentitles them to wages for
the strike period.
India General Navigation and Railway Co. Ltd. v. Their Workmen, 1960

- Held, that a strike in respect of a public utility service, which is clearly illegal, cannot at the same time be characterised
as ‘perfectly justified’. An illegal strike cannot be justifiable.
- Clear distinction has been made between legal and illegal in the IDA. There is no distinction between justified and not
justifiable strikes. Every one participating in illegal strike is liable for departmental enquiry.
- The only practical question with regard to illegal strike is the quantum of punishment to be based on the facts and
circumstances of each case.
- Mere participation in an illegal strike, without anything further, would not necessarily justify the dismissal of all the
workmen taking part in the strike and it is necessary to hold a regular inquiry, after furnishing the charge-sheet to each
of the workmen sought to be dealt with for his participation in the strike, because ‘not reporting to work’ does not lead
to irrefutable presumption of an active participation in the strike.
Inquiry

- The burden of proving mens rea is on the management.

- The management has to show that the charge sheeted workmen instigated or incited the strike or committed acts of
sabotage, vandalism or violence.
- The inquiry should delve into the personal tupitudes of particular workmen, in propelling an illegal and unjustified
strike and the proof of their separate part therein, meriting a dismissal.
- Can terminate without inquiry? Allegation of misconduct have to be inquired into by charging them with specific acts of
misconduct and giving them opportunity to defend themselves at inquiry. Even where strike is illegal, it does not justify
the management in terminating the services on that ground.
Wages for Strike Period

Initially Two views:

1) In Management of Churakulam Tea Estate v. Their Workmen and Crompton Greaves, it was held that the strike must be
both legal and justified to entitle workmen to wages during the strike period.
2) Bank of India v. T.S. Kelawala-it does not matter if the strike is legal or illegal, the workmen are not entitled to wages.
The question of justifiability was not addressed in the case.
Settled View- Syndicate Bank v. K. Umesh Nayak- Workers not entitled to wages even if the strike is legal. The strike has to be
legal and justified to claim wages. The legality and illegality of the strike can be looked at from the provision of IDA. The
justifiability and unjustifiability from the charter of demands.

Rohtas Industries v Union (1976) 2 SCC 82 sec 10A ID Act, not an industrial dispute – strike
- Labour and Industrial
- Compensation - Section 10-A of Industrial Disputes Act, 1947
- There was strike in the industry
- Parties agreed to refer dispute to arbitration
- Employees claimed wages for period of strike while employer claimed compensation for losses suffered during strike
- Arbitrator held employees guilty and asked them to make payment to management - High Court reversed Order –
- Held, the award in the present case is not beyond the legal reach of Article 226. The answer to the question whether the
High Court should have exercised its powers under Article 226 in the present case will depend upon whether the
arbitrator has tied himself down to obviously unsound legal proposition in reaching his verdict appearing from the face of
the award.
- Issue: whether an illegal strike causing loss of profit justifies award of damages?
- Even if the strike is illegal, the object of the strike has to be looked into. If the purpose of the combination leading to strike
was to inflict damage, it would be conspiracy. If the aim of the combination was to improve wage prospects, it is not a tort
of conspiracy even if it affects the interests of the employer. The right to strike is an essential element of collective
bargaining.
- However if some individuals destroy the plant and machinery willfully to cause loss to the employer such
individuals will be liable for the injury so caused.
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 - In the present case, the strike was due to non-implementation of existing award and there were no ulterior motives.
- Claims by employers against the workmen on grounds of tortious liability have not found a place in the Indian Industrial
Law because the workers belong to a weaker section.
- Even if strike is illegal under S. 24 IDA, immunity under S. 18 Trade Union Act is still present.

Gujarat Steel Tubes v Mazdoor Sabha AIR 1980 SC 1896 – strike

- Citing Crompton Greaves, the court held that even if a strike be illegal, it cannot be castigated as unjustified, unless the
reasons for it are entirely perverse or unreasonable.
- We cannot agree that mere failure to report for duty, when a strike is on, necessarily means misconduct.
- The management could not pass a real order of dismissal in the garb of discharge.
- It was open to the court to "lift the veil and to hold an order of discharge to amount to a dismissal" because the motive
behind it was a misconduct attributed to the employee.
- The court rejected "the theory of community guilt and collective punishment" and instead ruled that no worker shall be
dismissed save on the proof of his individual delinquency.
- The action taken under the general law or the standing orders, was illegal in the absence of individualised
charge sheets, proper hearing and personalise punishment if found guilty. None of these steps having been taken, the
discharge orders were still born.
- Jurisdiction under Art. 226 if an order suffers from an error apparent on the face of the record.

Vidyasagar Institute of Mental Health v Hospital Employees Union (2006) ILLJ 781 (Del) – demonstration, immunity, strike
- P (hospital) filed suit restraining D (Employees Union) from holding any demonstration and from blocking the ingress and
egress of any person visiting the hospital.
- P also sought declaration that strike threatened by D was illegal. (Here D threatened that if demands weren’t made
between them, they would go on strike)
- Court- D can’t be allowed to disrupt activities, functioning, ingress/egress of visitors and patients and create nuisance by
raising slogans near hospitals where patients need peace and solitude. Peaceful demonstration is fine.
- Strike was held illegal and injunction granted for restraining the D’s from holding any demonstration, dharnas, slogan
shouting and blocking- but allowed to peacefully do so 200m from radius of hospital.
- The court relied on a bunch of principles and held that the strike/demonstration is illegal.
o Civil Court has the jurisdiction to entertain suit of this nature
o Immunity given under Section 18 does not extend to conduct those acts, which may amount to an offence.
o Peaceful demonstration is a fundamental right.
o It is a legitimate right to make legitimate demands. Trade Union has the right to make demands in a peaceful
manner.
o No right to hold demonstrations at the residence of the employer.
- Demonstrations cannot be violent or intimidating in nature

Remuneration for Labour

This module is also divided into three parts- 1) Minimum Wages Act, 2) Equal Remuneration Act and 3) Bonus Act

Equal Remuneration Act, 1976

Objective of the Act: Men and Women must get equal pay for the same work or work of similar nature. It imposes an
obligation on the employer to ensure the same. In order to give equal wages, the prevailing wages should not be reduced, but the
higher wages should be awarded. No discrimination should be made in recruitment unless barred by law, no discrimination in
services post recruitment like promotion etc.
Other Legal Provisions: ILO Convention: Equal Pay (Equal Remuneration Convention,1951)- India is a signatory to this
convention. Inter alia, the convention provides for: Draft method for determining rate of wages, implement that, provide for
equal pay for men and women for equal work, make a national legislation or regulation to ensure the same.
Constitution of India: Article 39(d)- DPSP- state should endeavor to enact policy to ensure equal pay for equal work for men
and women. An ordinance was passed in 1975 by president- no discrimination in pay or recruitment. Received assent. Article 14
analysis may also be useful.
Important Sections:S. 2(d), (g),(h),(i), S. 3, S.4,S.5

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Randhir Singh v. UOI 1982 AIR 879
Facts: The petitioner is a driver constable in the Delhi Police Force under the Delhi Administration. The scale of pay in the
Delhi Police Force is for non-matriculate drivers Rs. 210-270 and for matriculate drivers 225-308. The scale of pay of a driver
in the Railway Protection Force is Rs. 260-400. The scale of pay of driver in the non-secretariat offices in Delhi is Rs. 260-6-
326-EB-8-350, while that of Secretariat offices in Delhi is Rs. 260-6-290-EB-6-326-8- 366-EB-8-8-8-390-10 400. The
petitioner and other driver constables have challenged that their pay scales should be the same as the drivers of heavy vehicles
in other departments.
Held: The petitioner and other drivers in the Delhi Police Force perform the same functions and duties as other drivers in
the service of the Delhi Administration and the Central Government. If anything, by reason of their investiture with the
"power, functions and privileges of a police Officer", their duties and responsibilities are more arduous.
The principle "equal pay for equal work" is not an abstract doctrine but one of substance.The principle of “equal pay for equal
work” has not been expressly declared by our constitution as a fundamental right but it is definitely a constitutional goal. Some
courts have pointed out that directive principles must be read into fundamental rights in this situation. Article 14 enjoins the
state not to discriminate and deny any person equality before law or equal protection of laws.

People’s Union for Democratic Rights v. UOI (1982) 3 SCC 235

This is a writ petition brought by way of public interest litigation in order to ensure observance of the provisions of various
labour laws in relation to workmen employed in the construction work of various projects connected with the Asian Games.
Inter alia, it was argued that the women workers were being paid only Rs 7 while male workers were paid 8.25.
“With regard to the observance of the provisions of the Equal Remuneration Act 1946, the Union of India, the Delhi
Administration and the Delhi Development Authority cannot avoid their obligation to ensure that these provisions are complied
with by the contractors. It is the principle of equality embodied in Article 14 of the Constitution which finds expression in the
provisions of the Equal Remuneration Act 1946 and if the Union of India, the Delhi Administration or the Delhi Development
Authority at any time finds that the provisions of the Equal Remuneration Act 1946 are not observed and the principles of
equality before the law enshrined in Article 14 is violated by its own contractors, it cannot ignore such violation and sit quiet by
adopting a non-interfering attitude and taking shelter under the executive that the violation is being committed by the
contractors and not by it. If any particular contractor is committing a breach of the provisions of the Equal Remuneration Act
1946 and thus denying equality before the law to the workmen, the Union of India, the Delhi Administration or the Delhi
Development Authority as the case may be, would be under an obligation to ensure that the contractor observes the provisions
of the Equal Remuneration Act 1946 and does not breach the equality clause enacted in Article 14.”
“ when the petitioners allege non- observance of the provisions of the Equal Remuneration Act 1946, it is in effect and
substance a complaint of breach of the principle of equality before the law enshrined in Article 14 and it can hardly be disputed
that such a complaint can legitimately form the subject matter of a writ petition under Article 32.”

Mackinnon Mackenzie v. Audrey D’Costa 1987 AIR 1281

Claim: Paid less than male stenographers-performing similar work
Respondent: Duty as Confidential Stenographer- attached to the Senior Executives- hence not similar work as male
Stenographers.
In deciding whether the work is the same or broadly similar-
The Authority should take an equally broad approach, for, the very concept of similar work implies differences in details, but
these should not defeat a claim for equality on trivial grounds. It should look at the duties actually and generally performed not
those theoretically possible by men and women. Where, however, both men and women work at inconvenient times, there is no
requirement that all those who work e.g. at night shall be paid the same basic rate as all those who work normal day shifts. Thus
a woman who works days cannot claim equality with a man on higher basic rate for working nights if in fact there are women
working nights on that rate too, and the applicant herself would be entitled to that rate if she changed shifts.
The fact that the management was not employing any male as a Confidential Stenographer attached to the senior Executives in
the establishment and that there was no transfer of Confidential Lady Stenographer to the general pool of Stenographers where
males were working ought not to make any difference for purposes of the application of the Act. Once It is established that the
lady Stenographers were doing practically the same kind of work which the male Stenographers were discharging the employer
is hound to pay the same remuneration to both of them irrespective of the place where they were working unless it is shown that
the women are not fit to do the work of the male Stenographer.
There is no custom or rule that only ladies can be Confidential Stenographers. If only women are working as Confidential
Stenographers it is because the management wants them there. Women are neither specially qualified to be Confidential
Stenographers nor disqualified on account of sex to do the work assigned to the male Stenographers”
The petitioner contends that the enforcement of the Act will be highly prejudicial to the management, since its financial position
is not satisfactory and the management is not able to pay equal remuneration to both male Stenographers and female
Stenographers. The Act does not permit the management to pay to a section of its employees doing the same work or a work of
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similar nature lesser pay contrary to section 4(1) of the Act only because it is not able to pay equal remuneration to all. The
applicability of the Act does not depend upon the financial ability of the management to pay equal remuneration as provided by
it. Proviso to 4(3) will apply only if condition under 4(3) is fulfilled. In this case only 4(1) is applicable.

State of AP v. G. Sreenivasa Rao 1989 SCR (1)1000

Whether payment of lesser salary to a senior than his junior in the same cadre is violative of the principle of equal pay for equal
work enshrined in the Constitution?

Facts: A bunch of appeals having similar issues were clubbed together. In each of these appeals, employees who were promoted
on a later date were being paid a higher salary than those who had been promoted earlier, i.e. juniors were being paid more than
seniors in the same cadre. The lower courts held that this was violative of the doctrine of equal pay for equal work. Held: The
doctrine of equal pay for equal work cannot be put in a straitjacket. Although it finds place in the DPSP (Article 39(d)), it is also
enshrined in Articles 14 and 16. The abstract doctrine of equal pay for equal work must therefore be read in light of the doctrine
of reasonable classification based on intelligible criteria having rational nexus with a legitimate object. It follows that equal pay
for equal work doesn’t mean that all members of a cadre must receive the same pay irrespective of their seniority, source of
recruitment, educational qualifications and various other incidents of service. Ordinarily, granting higher pay to a junior would
be ex facie arbitrary. But if there are justifiable grounds for doing so, then the seniors can’t invoke the equal pay for equal work
doctrine. Some eventualities in which juniors may legitimately draw higher pay than seniors without violating the doctrine: *
Pay fixation is done under valid rules/instructions.* Persons recruited from different sources are given pay protection.* Senior is
stopped at efficiency bar.* Advance increments are given for: experience, or passing a test, or acquiring higher qualifications, or
efficiency. Conclusion: There was some justifiable reason for fixing the juniors at a higher pay, namely that the last drawn
salary of the juniors in the cadre from which they were promoted was higher than that of the seniors. In some cases, this was a
result of the juniors having been in service in the lower cadre for a longer period of time than their seniors, while in other cases,
the juniors were promoted from a cadre having a higher pay scale than that of the seniors. Thus there is no violation.

No discrimination should be made between men and women workers while recruiting

Case: Air India Cabin Crew v Yeshaswini Merchant and Air India Officers Association v Air India Limited
Appeals were filed against the division bench of the Bombay High Court. The court held that the age of retirement from flying
duties of air hostesses at the age of 50 and then accepting ground duty till age of 58 is discrimination against them based on sex,
which is violative of Article 14, 15 and 16 of the constitution. The courts relied on Air India v Nargesh Meerza as various
constitutional principles were highlighted in this case regarding service conditions and lower age of retirement.
Section 4 of the Equal Remuneration Act prohibits the employer from paying unequal remuneration to male and female workers
for work of a similar nature whereas Section 5 requires the employer not to discriminate men and women with respect to
recruitment conditions of service for same work or work of similar nature.

II. Minimum Wages Act, 1948

History: ILO convention 1928, recommended fixation of minimum wages-->Standing Labour Committee of Tripartite
Organization(ILC) further discussed this matter in 1943-->Ambedkar tabled a bill in 1946 and it was passed in 1948. Objective:
Prevent exploitation of workers by prescribing minimum wage structure. To bring social justice and ensure a minimums
standard of life for workmen. to fix and revise wages for scheduled employment and add new employments to the list. Wage
Structure: Minimum, fair and living. You cannot demarcate between these with clear precision. Minimum=provides bare
subsistence and is at poverty line level, Fair=little above minimum- capacity of employer is relevant., Living=It comes at
comfort level, a certain quality and quantity of housing, food, utilities, transport, health care and recreation-minimum wage may
meet the requirements of living wage. National Floor Level minimum wage- to cut disparity across the country it is fixed- as of
1996 Rs. 36 per day
Important sections: S. 2(h), (i), 3(1),3(2),3(3), 4, 5,7,8,9,19,20,22
Concept of minimum wage: Kamani Metals and Alloys v. Their Workmen: Principles on which wages are fixed
1) minimum wage which in any event must be paid irrespective of the extent of profits, the financial condition etc.
minimum wage is independent of the kind of industry-big/small
2) wages must be fair, sufficiently provide for a standard family with food, shelter, clothing and medical care, education of
children appropriate for the workmen but not at a rate exceeding his wage earning capacity in the class of establishment
to which he belongs
3) Fair wage: earning capacity+workload

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 4) Fair Wage: fair wage is not living wage, it is sufficient only to provide for essentials and does not provide for a fair
measure of frugal comfort with an ability to provide for old age, evil days etc.
5) MW-not defined in the act- no uniform standard-not just bare minimum but also provide for the preservation and
efficiency of the worker-thus education and medical expenses also
Components of Minimum Wage: Tripartite Committee of Indian Labour Conference, 1957: 1) standard working class family
should be taken to consist of 3 consumption units for one earner. 2) Minimum food requirement should be calculated on the
basis of intake of calories, 3) Clothing requirement should be estimated at per capita consumption of 18 yards per annum, 4)
housing-the rent corresponding to the minimum are provided for under Government Industrial Housing scheme, 5) fuel, lighting
and other misc items of expenditure should constitute 20% of the total minimum wage. Raptakos case: This introduced a 6th
element keeping in mind the socio-economic aspect of the wage structure- Dearness Allowance- children education, medical
requirement, minimum recreation including festivals/ceremonies and provision for old age, marriages etc. should further
constitue 25% of the total minimum wage. Thus MW is further structured as Basic MW and DA.

Standard Vacuum Refining Co. of India v Their Workmen AIR 1961 SC 895
Facts: The workmen claimed bonus for the year 1956 equivalent to nine months' total earnings on the ground that the
employers had admitted their capacity to pay and that there was a big gap between the wage actually received and the living
wage.
Held: That the employers had failed to establish that they were paying a living wage to the workmen. In construing wage
structure the considerations of right and wrong, propriety and impropriety, fairness and unfairness are also taken into account
to some extent. As the social conscience of the general community becomes more alive and active, as the welfare policy of
the State takes a more dynamic form,
as the national economy progresses from stage to stage, and as under the. growing strength of the trade union movement
collective bargaining enters the field, wage structure ceases to be a purely arithmetical problem. Wages are usually divided
into three broad categories: the basic minimum wage, the fair wage and the living wage. The concept of a living wage is not
a static concept; it is expanding and the number of its constituents and their respective contents are bound to expand and widen
with the development and growth of national economy.
However court doesn’t answer whether bonus is payable or not if living wage is paid?

Bijay Cotton Mills Ltd v Their Workmen AIR 1955 SC 33

Facts: The provisions of ss. 3, 4 and 5 of the Minimum Wages Act (XI of 1948) empower the appropriate Government to
fix the minimum rate of wages in an industrial dispute between the employer and the employed and it is a criminal
offence not to pay the wages thus fixed under the Act. Issue: Whether this amounts to an unreasonable restriction on the
employer under Art. 19(1)(g)?
Held, that the restrictions imposed upon the freedom of contract by the fixation of minimum rates of wages though they
interfere to some extent with the freedom of trade or business guaranteed under Art. 19(1)(g) of the Constitution are not
unreasonable and being imposed in the interest of general public and with a view to carry out one of the Directive Principles
of State Policy as embodied in Art. 43 of the Constitution are protected by the terms of el. (6) of Art. 19. On the other hand, the
employers cannot be heard to complain if they are compelled to pay minimum wages to their labourers even though the
labourers, on account of their poverty and helplessness, are willing to work on lesser wages.

Muir Mills Co. Ltd v. Suti Mills Mazdoor Union, Kanpur [1995 AIR 170]
Facts:The case is primarily about workers' claim for bonus and an appeal for the same was preferred by management through
special leave against the order of Labour Appellate Tribunal in favor of workmen.
Analysis: The term bonus is applied to a cash payment made in addition to wages. it generally represents the cash incentive
given conditionally on certain standards of attendance and efficiency being attained.
There are two conditions, which have to be satisfied before a demand for bonus can be justified and they are, (1) when wages
fall short of the living standard and (2) the industry makes huge profits part of which are due to the contribution which the
workmen make in increasing production. The demand for bonus becomes an industrial claim when either or both these
conditions are satisfied.
Conclusion: Bonus payment can be made with respect to a year when there is surplus in that particular year. Therefore, in the
present case, Management was not legally obligated to make bonus payment as the company suffered trading loss.

Transfer of Undertaking

Relevant Provisions: S. 25 FF

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Unfair Labour Practices
- Unfair labour practices are listed in Schedule 5 of the IDA Act.
- The state of Maharashtra has enacted a special legislation in 1971 specially to deal with unfair labour practices.
- Maharashtra Act provides for prevention, rectification and stoppage of unfair practices.
- Central Act have no such provision.
- “Any unfair labour practices within its very concept must have some elements of arbitrariness and unreasonableness and
of unreasonableness is established the same would bring violation of fundamental right guaranteed under Art. 14 of the
Constitution.”

Penalty for Contravention of Provision of S. 33 (S. 31(1))

- Shall be punishable for a team which may extend to 6 months or with fine which may extend to Rs. 100 or with body.
- Recovery of money due from an employer S. 33 (C)
- Cognizance of Offences (S. 34)
- No court inferior to that of a Metropolitan Magistrate or Judicial Magistrate of the First Class shall try any offence
punishable under this Act. (S. 34(2)
- Protection of persons (S. 35)
➔ expulsion from any trade union or society or
➔ any fine or penalty, or
➔ deprivation of any right or benefit to which he or his legal representative would otherwise be entitled. or
➔ any disability either directly or indirectly or any disadvantage as compared with other members of the union or
society.
- Representation of Parties (S. 36)
- Power to remove difficulties (S. 36 A)
- Power to exempt (S. 36 B)
- Protection of action taken under the Act (S. 37)
- Power to make rules (S. 38)

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