The Industrial Disputes Act 1947

• The Act has been amended several times and is responsive to

the changes taking place in the business environment
• It is a special legislation which applies to workmen
irrespective of the amount of wages but covers supervisors
drawing wages not exceeding a specified amount per month
• It governs their service conditions
• It is regarded as a supplement to the Indian Contract Act
• It deals with prevention and settlement of conflict between
the two parties.
• Basing on various judgements by the Supreme court, the
objectives of ID Act could be found (mentioned in next slides)
• The term “Industry” has a wide meaning which normally
include all economic activities in an organised set up.
 The Industrial Disputes Act 1947
“Industry” includes
• Dock Labour board
• Activities or profession carried on by individual or groups
• Agriculture
• Hospitals, Dispensaries, Nursing Homes,
• Educational, Scientific, Research or Training institutions
• Charitable, Social or Philanthropic institutions
• Khadi and Village industries
• Government activities like defence, research, atomic energy
and space
• Any domestic service
• Co-operative society or club ( min 10 employees)
• Municipality/Municipal Corporation/City Corporation
 The Industrial Disputes Act 1947
Disputes:
• Collective issue raised on management which is rejected
• Community interest of group of employees
• Dispute between employees, employer and employers or between
employers
• Dispute must be related to employment, non-employment or terms of
employment/conditions of labour or withdrawal of benefits to an office
bearer of union. However, benefits like housing, conveyance, education or
medical are the responsibilities of the Government.
• Dispute also relate to Strike or lock outs
• Contractual relationship should be present
• Industry must be existing not a dead one or imaginary
• Individual employee dispute can be treated as an industrial dispute when
taken up by a trade union or by a number of workmen
 The Industrial Disputes Act 1947
Objectives of ID Act:
• Promoting and securing amity and good relations
• Minimising differences and settling disputes through
adjudication
• Providing a suitable machinery for investigation of disputes
• Preventing illegal strikes and lockouts
• Providing relief to workmen in matters of lay-offs,
retrenchment, wronggul dismissals and victimisation
• Giving the workmen the right of collective bargaining
• Promoting conciliation
 The Industrial Disputes Act 1947
Principles under the Act
• Permanent conciliation machinery available. Time limits have been fixed.
Time reckoned from the date of notice of strike. Specific time limits for
various stages also fixed. Individual or collective disputes covered
• Compulsory arbitration in public utility srevides
• Strikes and lockouts during the pendency of conciliation and arbitration
proceedings and arbitration awards, are prohibited.
• An obligation on employers to recognise and deal with representative
union has been imposed
• Works committee –mutual consultation by employer and workers set up
• Disputes may be referred to Industrial Tribunal/Labour court by the
employees, employers or even the government
 Industrial Disputes Act
Important Definitions:
• Appropriate Government: Central or State Government
• Award: Award means an interim or final decision of any industrial tribunal
of dispute or of any question thereto by any labour court, industrial
tribunal or national tribunal. Also includes arbitration award
• Employer: Authorities prescribed by the Central or State Government. If
no authority prescribed, the Head of the Department. In other cases, the
CEO
• Industry: Industry means any business, trade, undertaking, manufacture
or calling. Amended in 1982 to “any systematic activity carried on by co-
operation between an employer and his workmen (whether employed
directly or through any agency including the contractor) for the
production, supply or distribution of goods or services with a view to
satisfy human wants or wishes( not being merely religious or spiritual in
nature)
 Industrial Disputes Act
Important Definitions:
“Industry” does not however include:
Agriculture, Hospitals/Dispensaries, educational, scientific, research or
training institutions, charitable—social—or philanthropic institutions,
khadi and village industries, activities of sovereign government(defense,
research, atomic energy and space), domestic services, co-op society, club
or any other body of individuals where not less than ten persons are
employed
• “industrial Dispute:” any dispute or difference between employers and
employees or between employers and workmen or between workmen
and workmen which is connected with the employment or non-
employment or the terms of employment or the conditions of labour or
any person ( collective will, appreciable number in case of large industry,
first raised with the management and rejected by it, existing industry and
not a dead/non-existing). However, an individual dispute could become
industrial dispute when a trade union or a number of workmen take up
the cause
 Industrial Disputes Act
Certain aspects of Industrial disputes:
• “Employment and Non-employment”:-Dismissal, removal, retrenchment,
or discharge
• Disputes re: Facilities: Tribunals and courts has jurisdiction can pass
appropriate orders
• Withdrawal of privilege of a trade union leader
• Dsiputes re: workmen employed by the contractor
• Lay off ( failure refusal or inability of the employer) on account of shortage
of raw materials or power or accumulation of stocks or breakdown of
machinery
 Industrial Disputes Act
Certain aspects of Industrial disputes:
• Lockout: “temporary closing of a place of employment, or the suspension
of work or temporary refusal by an employer to continue to employ any
number of persons employed by him. Lockout is the anti thesis of strike—
an armour in the hands of the employer
• Public Utility Services
• Retrenchment –does not mean voluntary retirement, superannuation,
termination of services or termination of the contract or non-renewal of
the contract
• Settlement: A settlement means “ a settlement which has been arrived at
in the course of conciliation proceeding, and bind all workmen, and also
which has been arrived at otherwise, but has been signed by both parties
and a copy thereof has been sent to the government and the conciliation
officer (bipartite settlement)
 Industrial Disputes Act
Certain aspects of Industrial disputes:
• Strike: “ A cessation of work by a body of persons employed in any
industry acting in combination, or a concerted refusal to continue to work
or to accept employment”—Mere cessation of work does not constitute
“Strike” unless it is a concerted action for the enforcement of the
demands
• Wages: “ all remuneration capable of being expressed in terms of money
which would, if the terms of employment, expressed or implied were
fulfilled, be payable to the workman in respect of his employment or of
work done in each employment and which includes DA, Housing facilities
—water, electricity, medical attendance or other amenities, travelling
allowance
• Contract of Personal Service: does not fall under the definition of
workman
 Industrial Disputes Act
Authorities under the Act:
• Conciliation ( Works Committee, Conciliation Officer and the Board of
Conciliation)
• Arbitration—court of enquiry
• Adjudication—Labour Court, Industrial Tribunal and National Tribunal

Conciliation: Conciliation is a method for the settlement of industrial disputes

through third party intervention. It aims at reconciling the views of
disputants and brings them to an agreement
The conciliator is a neutral party, who without using force, seeks to find some
middle course for mutual agreement between disputants so that the
deadlock is brought to an end at the earliest possible moment and normal
peace restored. Government has the power to nominate the conciliation
officers (including the number of conciliation officers)
 Industrial Disputes Act
Authorities under the Act:
Arbitration:
• A Court of Inquiry as an is constituted as an adhoc body as the occasion
may arise, by the appropriate government. It can enquire into any matter
connected with or relevant to industrial dispute, but not into the dispute
itself. Constitution of the court has to be notified in the Official Gazette.
Government may appoint One or more of the members as independent
persons
During the pendency of the proceedings the following rights are not affected
a) worker’s right to go on strike; b) employer’s right to declare the lockout
and c)the right of the employer to dismiss or otherwise punish the worker
in certain cases.
 Industrial Disputes Act
Authorities under the Act:
Adjudication: The ultimate legal remedy for the settlement of an unresolved
dispute is its reference to adjudication by the government. The
Government appoints a third party for purpose of deciding the nature of
final settlement

Labour Court: Government may constitute a labour court for adjudicating the
industrial disputes. Normally labour court upholds the decisions of the
departmental inquiries(domestic enquiries). But if no domestic enquiries
are held, the labour court has full jurisdictional powers to undertake an
inquiry, accept fresh evidence, reappraise the same and render a new
decision thereon.
 Industrial Disputes Act
Authorities under the Act:
Industrial Tribunal: The Appropriate Government may appoint one or more
industrial tribunals for the adjudication. These tribunals take up disputes
arising out of new demands which may affect the working of the company
or industry. Example:--Wages—including the period and mode of
payment; Compensatory and other allowances; Working conditions;
Bonus; Profit sharing; Classification of Grades; Rationalisation,
Retrenchment and any other matter assigned
It is a judicial body and normally takes up long standing disputes unresolved
National Tribunals Government may appoint one or more national tribunals
for adjudication of industrial disputes involving questions of national
importance or questions affecting the interests of more than one State.
 Industrial Disputes Act
IMPORTANT TERMINOLOGIES:
Strikes
Lockouts
Lay off
Retrenchment
Closure of industry or business
Unfair Labour Practices ( victimisation, threatening with discharge or
dismissal, sponsoring trade unions, favouritism—list is endless)
 The Minimum Wages Act 1948
• This Act prescribes the minimum wages which should be paid
by the employers to workers. However, MINIMUM WAGE is
not defined anywhere. (literally impossible to fix)
• It aims to prevent workers’ exploitation
• It is to secure social justice and welfare of the workers in a
competitive world
• It extends to the whole of India and amended several ties
• It also deals with different kinds of workers like Child labour,
Adolsescent and Adult
• Wages include all remuneration payable to a workers
expressed in terms of money including house rent allowance (
but there are certain exceptions)
 The Minimum Wages Act 1948
Exceptions to the term “Wages:
• Money value of house accommodation, lighting, water,
medical attendance or any other value of amenities
• Employer’s contribution to the Provident Fund or Pension
fund
• Any travelling allowance
• Reimbursement of expenses incurred by the employee for
office work
• Gratuity on discharge of employees
However, compensation for the rest day would be treated as
Wages.
 The Minimum Wages Act 1948
• The concept of minimum wages shall take into account the
prevailing cost of essential commodities, the cost of living at a
particular place and time as neutralised by the prise rise in
essential commodities.
• The minimum wage should be paid irrespective of profit or
loss. It applied to all industries big or small.
• Wages must be fair –sufficiently high to provide a standard
family food, clothing, shelter, medical care and education of
children (appropriate to the workmen) and should consider
the work load
• Kinds of employment defined in the Act –Rice mill, Flour Mill,
Plantations, Oil Mill, Local authority, Construction workers,
stone breaking or stone crushing, leather factory, public
motor transport, leather factory, mines of all categories etc
 The Minimum Wages Act 1948
• The Act empowers the Government to fix and/or review the
minimum wages for the specified employment. Revision
should be done in a period of two years or on a rise of 50
points in the consumer price index whichever is earlier.(as per
Labour conference of May 1987)
• Minimum wage can be fixed for “ Time wage”, “Piece Wage”,
“Guaranteed wage (in piece wage)”, “Overtime Wage”
• Minimum Wage can be fixed: a) “a basic rate of wage with
adjustment with the cost of living index”; b) a basic rate of
wage with or without cost of living allowance and the cash
value of concessions in respect of essential commodities
(supplied) or c) an all inclusive rate allowing basic rate, cost of
living allowance and the value of concessions
 The Minimum Wages Act 1948
• As per the Act wages are to be paid in Cash. Government has
to be permit payment of wages in kind where such practice is
customary
• There are advisory boards, committees and sub-committees
etc
• Only the following are allowed as deductions from Minimum
wages—Fines, Deductions for absence from duty, damage or
loss deliberately caused, deductions for housing/amenities,
overpayments in some periods; income tax, deductions as per
court orders, PF contribution, payment of Insurance premia or
to a co-op society at the workers request, deductions for
investment in certain securities like NSCs or donations like
National relief fund etc (at the request of a worker)
 The Minimum Wages Act 1948
• Where the employee works for part of the day, the wage can
be paid for part of the day except where the employer himself
is not able to provide full days work
• Claims for minimum wages can be made by a) employee
himself; b) any legal practitioner on his behalf; c) any official
or representative of a trade union on behalf of the worker; d)
any person acting with the permission of the authority.
• Any employer violating the provisions of the Minimum Wages
Act may be punished with imprisonment upto 6 months
and/or fine of Rs Five hundred rupees or with both. Separate
penalties are prescribed for failure to maintain proper
registers.
 The Payment of Bonus Act 1965
• Bonus is something paid as a gesture of goodwill.
• Normally, employees contribute to higher productivity and
profits and a share of profits is given to employees by way of
Bonus.
• It is in addition to regular wages though not required by the
terms of contract of employment
• Supreme Court has given a formula which states that the
following factors to be considered while deciding the
quantum of bonus—a) surplus available; b) gap between
wages received and minimum living wage; c) welfare work
undertaken by employer; d) contribution of labour to profits;
e) the needs of shareholders and the necessity of attracting
them; f) expansion needs and g) financial stability of the
employer
 The Payment of Bonus Act 1965
• The GOI appointed a tripartite committee in 1961 to consider
the question of payment of bonus based on profits. The GOI
implemented the committee recommendations with some
changes in the year 1964. Payment of Bonus Act was enacted
in the year 1965.
• Objectives of the Act: a) Statutory obligation for payment of
bonus to eligible employees; b) to outline the principles for
payment of bonus; c) fixing minimum and maximum bonus as
a per a formula; d) enforcement of the Act
• The Act applies to all establishments employing 20 or more
workers on any day in the accounting year. It applies to banks.
 The Payment of Bonus Act 1965
• Employee means any person (other than apprentice)
employed on a salary or wage not exceeding Rs3500/- per
month (check this limit now). Amt of bonus is on a salary of
Rs2500.
• Employer includes owner, manager or agent of the owner,
Managing director or managing agent
• Wage or salary includes all remuneration (except overtime
work) in monetary terms including DA but excluding the
following: a) temporary allowances; b) commission; c)
travelling concession; d) HRA; e) bonus and additional bonus;
f) contribution to PF or pension funds; g) terminal benefits to
the employee
• Bonus cannot be attached by any court
 The Payment of Bonus Act 1965
• Employees who are terminated on account of Fraud, Riotous or Violent
behaviour within the office premises, or Theft, misappropriation or
sabotage are not eligible for bonus
• Statutory bonus: Minimum bonus is 8.33% of the wages and salary earned
and the Maximum is 20%. It is an employee’s right but non-payment of
bonus is not a dispute under ID Act, but a claim under the Payment of
Bonus Act.
• Festival Bonus: May be paid by the employer in addition to the statutory
bonus as per the bipartite agreements
• Time limit for payment: Eight weeks from the closure of accounts
• Deductions: recovery of financial losses caused by a misconduct
• Records to be maintained by the employer (Bonus paid register and
register showing the calculation of allocable surplus)