Industrial Disputes

Act, 1947

Dr. Subir Bikas Mitra

SESSION-13
 Introduction
 The Industrial Disputes Act, 1947 regulates the Indian labor Law so far as
that concerns trade unions as well as individual workmen employed in any
industry in the Indian mainland.
 It was one of the last legislative act before the passing of the Indian
Independence Act of 1947. It came into force on 1 April 1947.
 Before the Industrial Disputes Act, there was no machinery to resolve
the Disputes. The whole system was based on the Common Law and
according to common Law, Disputes should be resolved according to
the contract between the parties.
 Therefore, the Common Law system does not apply to the Industrial
system. Hence, Industrial Disputes Act, 1947 was passed to meet the
needs which were based on Socialistic Law. This act is for social
welfare.
 Objectives and Scope
 The promotion of measure for securing amity and good relationship
between the employer and workmen.
 An investigation and settlement of the Industrial Disputes between
employers and employers, employers and workmen or workmen and
workmen with the right of a presentation by a registered trade union.
 Prevention of illegal strikes and lock-outs, Collective Bargaining.
 To achieve Industrial peace, harmony, good relations, and
economic justice.
 Protection of Trade Union’s right.
 To regulate lay-off and retrenchment.
 Production and productivity should be regulated.
 To provide social justice.
Continued...
 Relief to workmen in the matter of lay-off,
retrenchment and closure of undertaking.
 To fulfil the Industrial needs like work as a unit,
mutual trust and tolerance.
 Cooperation between employer and employee. They
must develop the spirit to work together and help
one another.
 To protect the democratic right of strike and lock-
out.
 To provide effective, easy mechanism, efficient,
speedy and professionalize for the settlement of the
Industrial Disputes.
 Three types of Machinery: Conciliation, Adjudication
and Voluntary Arbitration.
 Important Definitions
 Section 2(a) Appropriate Government
• Appropriate Government means the Central
Government in relation to any Industrial Disputes
concerning any industry carried on by or under the
authority of the Central Government, any industry
carried on by a Railway Company, any controlled
industry specified by the Central Government, The
Unit Trust of India.
• Corporations under the Central Statutes, Banking
company, Insurance company. Mines, Oil field,
Cantonment board, Major ports, etc.
• In relation to any other Industrial Disputes, the
Appropriate Government is the State Government.
 Section 2 (b) Award
It means an interim or a final determination of any Industrial
Disputes or of any question relating thereto by any Labour
Court, Industrial Tribunal or National Industrial Tribunal
and includes an Arbitration award made under section 10A;

Section 2(cc) Closure

It means the permanent closing down of a place of
employment or part thereof.
 Section 2(aaa) Average Pay
 This clause lays down the manner of calculating the
average pay for the purpose of payment of
compensation at the time of retrenchment of a
workman.
 The determination of average pay is to be made in a
different way in the case of
 Monthly paid workmen,
 Weekly paid workmen, and
 Daily paid workmen
 The average pay is calculated in the following manner
for the different categories of workers.
Continued...
 In the case of monthly paid workmen, the average of the
wages paid for three complete calendar months;
 In the case of weekly paid workmen, the average of the
wages paid for four complete weeks;
 In the case of daily paid workmen, the average of the
wages paid for twelve full working days.

 The period of three months, four weeks or twelve days as

specified above, must precede the day on which the average
pay becomes payable. In case a workman has not worked
for the period specified above, the average pay shall be
calculated as the average of wages paid to the workmen for
the period he actually worked.
 Section 2(j) Industry
 The term industry means any business, trade, undertaking,
manufacture or calling of employers & includes any calling,
service, employment, handicraft, or industrial occupation or
avocation of workmen.

 In Bangalore Water Supply and Sewerage Board, Etc., vs. A.

Rajappa and Others, Etc., (1978 AIR 548, 1978 SCR (3) 207)
the organization was excluded from the sphere of industry by
necessary implication. It was held by the Hon’ble SC that the
Act itself treats certain public utility services, run by
governmental agencies as with the sphere of the strength of
such provisions, that a particular set of employees are outside
the scope of the I.D. Act for that reason. The special excludes
the applicability of the general.
Continued...
 In the present case the court by applying liberal
interpretation gave a wider meaning to the definition of
industry so as to include all kinds of activities wherein
there is an employer and employee relationship.
Triple Test
After the Bangalore Water supply case the Supreme Court
(1978) came up with a working principle called as triple test:
 There should be systematic Activity.
 Organized by Co-operation between employer and
employee,
 For the production and/or distribution of goods and
catering of services calculated to satisfy human wants
and wishes.
 Section 2(k) Industrial Disputes
 Means any Disputes or difference between employers and
employers, 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 with the
conditions of labor, of any person.

 The definition of ‘industrial dispute’ under the ID Act did not

expressly include disputes arising out of discharge, dismissal,
retrenchment or termination of workers within its meaning and
the same was included by way of addition of Section 2A through
Industrial Relations Code, 2020. Under the IR Code, for better
clarity, disputes arising out of discharge, dismissal,
retrenchment or termination of workers have been added in the
definition of ‘industrial dispute’ itself.
 Section 2(kkk) Lay-off
 An employer, who is willing to employ, fails or refuse or is
unable to provide employment for reason beyond his
control. Any such failure or refusal to employ workmen may
be on account of:
 Shortage of coal, power or raw material
 The accumulation of stock;
 The breakdown of machinery;
 Natural calamity.
 Meaning of Lay-off: means putting aside workmen
temporarily. The duration of lay-off is not for a period
longer than 45 days in a year.
 Section 2(l) Lock-out
 It means the closing of a place of employment, or the
suspension of work, or the refusal by an employer to
continue to employ any number of person employed by
him.
 Ingredients:
 Temporary closing of a place of employment by the
employer.
 Suspension of work by the employer.
 Refusal by an employer to continue to employ any
number of persons employed by him.
 Section 2(n) Public Utility Service
i. any railway service or any transport service for the carriage of
passengers or goods by air;
any service in, or in connection with the working of, any
major port or dock;
ii. any section of an industrial establishment, on the working of
which the safety of the establishment or the workmen
employed therein depends;
iii. any postal, telegraph or telephone service;
iv. any industry which supplies power, light or water to the public;
v. any system of public conservancy or sanitation;
Continued...

vi.any industry specified in the [First Schedule] which the

Appropriate Government may, if satisfied that public
emergency or public interest so requires, by notification in
the Official Gazette, declare to be a public utility service for
the purposes of this Act, for such period as may be specified
in the notification:
Provided that the period so specified shall not, in the first instance,
exceed six months but may, by a like notification, be extended from
time to time, by any period not exceeding six months, at any one
time if in the opinion of the Appropriate Government public
emergency or public interest requires such extension.
 Section 2(oo) Retrenchment
 It means the termination by the employer of the service of a
workman for any reason whatsoever, otherwise than as a
punishment inflicted by way of disciplinary action, but does not
include–
a. voluntary retirement of the workman; or
b. retirement of the workman on reaching the age of
superannuation if the contract of employment between the
employer and the workman concerned contains a stipulation in
that behalf; or
bb. termination of the service of the workman as a result of the non-
renewal of the contract of employment between the employer and
the workman concerned on its expiry or of such contract being
terminated under a stipulation in that behalf contained therein; or
c. termination of the service of a workman on the ground of
continued ill-health.
 Section 2 (p) Settlement
 It means a settlement arrived at in the course of Conciliation
proceeding and includes a written agreement between the
employer and workmen arrived at otherwise than in the course
of Conciliation proceeding where such agreement has been signed
by the parties thereto in such manner as may be prescribed and a
copy thereof has been sent to an Officer authorized in this behalf by
the Appropriate Government and the Conciliation Officer;

Section 2(q) Strike

 It means a cessation of work by a body of persons employed in
any industry acting in combination or a concerted refusal, or a
refusal under a common understanding, of any number of
persons who are or have been so employed to continue to
work or to accept employment;
 Section 2(s)Workman
 “Workman” means any person (including an
apprentice) employed in any industry to do any manual,
unskilled, skilled, technical, operational, clerical or
supervisory work for hire or reward. His terms of
employment may be express or implied.
 For the purpose of any proceeding under this Act in
relation to an Industrial Disputes, ‘workman’ includes
any person who has been dismissed, discharged or
retrenched in connection with, or as a consequence of
that Disputes, or whose dismissal, discharge or
retrenchment has led to that Disputes.
Section 2A. Dismissal, etc., of an individual workman
to be deemed to be an industrial dispute.

 Where any employer discharges,

 dismisses, retrenches, or otherwise terminates the
services of an individual workman, any dispute or
difference
 between that workman and his employer connected with,
or arising out of, such discharge, dismissal,
 retrenchment or termination shall be deemed to be an
industrial dispute notwithstanding that no other
 workman nor any union of workmen is a party to the
dispute.
 Authorities/Machineries under
Industrial Disputes Act, 1947
1) Works Committee (Section 3)
2) Conciliation Officer (Section 4)
3) Conciliation Board (Section 5)
4) Court of Inquiry (Section 6)
5) Labor Court (Section 7)
a. Industrial Tribunal
b. National Tribunal
6) Arbitration
 Matters within the Jurisdiction
of Labor Courts- Second Schedule
The propriety or legality of an order passed by an employer under the standing orders;
 The application and interpretation of standing orders;
 Discharge or dismissal of workmen including reinstatement of, or grant of
relief to, workmen wrongfully dismissed;
 Withdrawal of any customary concession or privilege;
 Illegality or otherwise of a strike or lock-out; and
 All matters other than those specified in the Third Schedule.
 Matters within the Jurisdiction
of Labor Courts- Third Schedule
1. Wages, including the period and mode of payment;
2. Compensatory and other allowances;
3. Hours of work and rest intervals;
4. Leave with wages and holidays;
5. Bonus, profit sharing, provident fund and gratuity;
6. Shift working otherwise than in accordance with standing orders;
7. Classification by grades;
8. Rules of discipline;
9. Rationalization;
10.Retrenchment of workmen and closure of establishment; and
11.Any other matter that may be prescribed.
Voluntary reference of Disputes to Arbitration
[Sec. 10 (a)]
 An Arbitrator is appointed by the Government.
 Whether the Disputes is before Labour Court, or
Industrial Tribunal or National Tribunal, the
parties can go to Arbitration by written agreement.
 The Arbitrators conduct the investigation into the
Disputes matters and give Arbitration award
(final decision or settlement or decree) as for
making reference of an Industrial Disputes. If an
Industrial Disputes exists or is apprehended and
the employer and the workman agree to refer the
Disputes to an Arbitration, they may refer the
Disputes to an Arbitration.
Continued...
 But such reference shall be made before the Disputes
has been referred under Section 19 to a Labour
Court or Tribunal or National Tribunal by a
written agreement.
 The Arbitrator may be appointed Solely or more than
one in number.
 The Arbitrator or Arbitrators shall investigate the
Disputes and submit to the Appropriate Government
the Arbitration award signed by the Arbitrator or
all the Arbitrators, as the case may be.
Thank You
Any Questions?