Industrial Disputes Act, 1947

Introduction

The Industrial Disputes Act, 1947 was enacted to regulate labour laws across the Indian mainland and address conflicts between employers and employees. Coming into force on April 1, 1947, the Act was introduced to resolve disputes that frequently arose between workers and capitalists. These conflicts often stemmed from differences in opinion regarding working conditions, wages, and employment terms, prompting the government to intervene.

The primary objective of the Act is to promote peace and harmony in industrial relations by providing a structured process for the peaceful settlement of disputes. The Act applies to industries managed by or under the authority of the Central Government, as well as other specified industries, and lays down clear guidelines for fostering good relations between employers and employees while addressing any issues that may arise.

Authorities under the Industrial Disputes Act

Works Committee under the Industrial Disputes Act

The Industrial Disputes Act, 1947, lays down provisions for the establishment of a Works Committee in industrial establishments employing 100 or more workers. The objective of the Works Committee is to maintain harmonious relations between employers and employees and to address concerns of mutual interest.

Constitution of a Works Committee

Under Section 3 of the Industrial Disputes Act, the government can mandate an employer to form a Works Committee. This Committee should have representatives from both the employer and the workmen. Importantly, the number of representatives of the workmen must not be less than the number of employer representatives.

The selection of worker representatives is done in consultation with any trade union present in the establishment, ensuring that their voices are adequately heard. This encourages a structured dialogue between management and employees, fostering a culture of transparency and collaboration.

Role and Responsibilities

The primary duty of the Works Committee is to foster a positive working relationship between the employer and the employees. This is achieved by promoting amicable solutions to issues concerning both parties. The Committee serves as a forum to discuss matters such as working conditions, safety, and productivity, which impact both the employer’s business interests and the workers’ welfare.

In cases of disagreement, the Works Committee endeavours to resolve differences through dialogue, avoiding formal disputes that may escalate into strikes or lockouts. It acts as an intermediary to iron out conflicts at an early stage, ensuring the smooth functioning of the industrial establishment.

Importance of Works Committees

Works Committees play a vital role in promoting industrial peace. By involving both the employer and employees in discussions on mutual concerns, it helps in reducing the chances of industrial disputes. In addition, the Committee ensures that employees have a platform to voice their opinions and grievances, promoting a more engaged workforce.

Moreover, the presence of a Works Committee ensures that small concerns do not snowball into major conflicts, thereby protecting the productivity of the establishment and the interests of the workers.

State Amendments

While the basic structure of the Works Committee is governed by the Industrial Disputes Act, various states have introduced amendments to address local industrial conditions. For instance, Rajasthan has included provisions for appointing a Registrar and Assistant Registrar of Unions, providing further regulatory oversight to industrial relations within the state.

These amendments complement the core objective of the Works Committee, ensuring that the framework adapts to the specific needs of different regions.

Conciliation Officers

Conciliation officers play a crucial role in mediating and promoting the settlement of industrial disputes. Appointed by the appropriate government through a notification in the Official Gazette, these officers may operate in specified areas, industries, or both. Their role is to bring disputing parties to a negotiated settlement and avoid the need for litigation. A conciliation officer can be appointed either permanently or for a limited period, depending on the situation.

Board of Conciliation 

The Board of Conciliation is established as needed by the government to resolve industrial disputes. It consists of a chairman and either two or four members. The chairman is an independent individual, while the other members represent the parties involved in the dispute. Each party is allowed to recommend their representative, but if a recommendation is not provided, the government appoints the representative. The Board can continue its activities despite any absence of members or vacancies, provided the quorum is met. However, if the chairman’s services cease, the Board cannot act until a new chairman is appointed.

Courts of Inquiry

Courts of Inquiry are constituted by the appropriate government to investigate matters related to industrial disputes. These courts may consist of one or more independent members, with one designated as the chairman if there are multiple members. Like the Board of Conciliation, the Court of Inquiry can function as long as the quorum is met. However, if the chairman’s position becomes vacant, the court must wait for a new appointment before continuing its operations.

Labour Courts

Labour Courts are established to adjudicate industrial disputes related to matters specified in the Second Schedule of the Act. These courts consist of a single presiding officer, appointed by the appropriate government. The qualifications for appointment include being or having been a High Court judge, a District Judge with at least three years of experience, or a person with substantial judicial experience. Labour Courts handle disputes related to issues such as working conditions, layoffs, and dismissals.

Industrial Tribunals

Industrial Tribunals have a broader scope than Labour Courts and adjudicate disputes on matters listed in both the Second and Third Schedules. Like Labour Courts, they consist of a single presiding officer. However, additional qualifications are required for the position, including experience as a High Court Judge, District Judge, or relevant labour department official. The government may also appoint two assessors to assist the Tribunal in its proceedings.

National Tribunals

National Tribunals are constituted by the Central Government to handle industrial disputes of national importance or those affecting more than one state. Similar to Industrial Tribunals, they consist of a single presiding officer, who must be or have been a High Court Judge. The Central Government may also appoint assessors to assist in proceedings, depending on the complexity of the case.

Disqualifications for Presiding Officers

A person is disqualified from holding the position of presiding officer of a Labour Court, Tribunal, or National Tribunal if they are not an independent individual or if they have reached the age of 65. This ensures that the adjudicating authorities remain impartial and competent.

Qualifications, Terms, and Conditions of Service of Presiding Officers 

The qualifications, terms, and conditions for presiding officers, particularly those appointed by the Central Government, are governed by the Tribunals Reforms Act, 2021. This Act outlines the eligibility criteria, appointment procedures, terms of office, and conditions such as salaries and removal. Presiding officers appointed before the enactment of the 2021 reforms continue to follow the provisions of the original Industrial Disputes Act, ensuring consistency and stability in ongoing adjudications.

 Filling of Vacancies

This section addresses a crucial aspect of maintaining the functionality of labour dispute resolution bodies. It stipulates:

• When a vacancy occurs in the office of a presiding officer of a Labour Court, Tribunal, or National Tribunal, or in the office of the chairman or any member of a Board or Court, it must be filled promptly.
• The responsibility for filling these vacancies lies with:
  • The Central Government for National Tribunals
  • The appropriate Government for all other cases
• The new appointment must be made in accordance with the Act’s provisions.
• Once filled, proceedings can continue from the stage at which the vacancy occurred.

Importance: This provision ensures continuity in the dispute resolution process, preventing delays due to administrative gaps. It maintains the integrity and effectiveness of these bodies in addressing labour issues.

Finality of Orders Constituting Boards

This section reinforces the authority of labour dispute resolution bodies:

• Orders appointing members to Boards, Courts, Labour Courts, Tribunals, or National Tribunals cannot be questioned in any manner.
• No act or proceeding before any Board or Court can be called into question merely due to a vacancy or defect in its constitution.
• Settlements reached in conciliation proceedings remain valid even if they occur after the expiry of the prescribed period.
• A settlement signed by the chairman and all Board members is valid even if some members were absent during parts of the proceeding.

Significance: This provision protects the legitimacy of these bodies and their decisions, preventing technical challenges that could undermine the dispute resolution process.

Notice of Change

This section establishes a crucial procedure for implementing changes in working conditions:

• Employers must give notice before changing service conditions specified in the Fourth Schedule.
• The notice must be given to affected workmen in the prescribed manner.
• A 21-day period must be observed between giving notice and implementing the change.
• Exceptions exist for changes made under settlements, awards, or for workers governed by certain government service rules.

Purpose: This provision ensures transparency and gives workers time to prepare for or contest significant changes in their working conditions.

Power of Government to Exempt 

This section provides flexibility in applying the notice of change requirement:

• The appropriate Government can exempt certain classes of industrial establishments or workers from Section 9A requirements.
• Exemption can be granted if:
  1. Applying Section 9A would prejudicially affect employers.
  2. It might cause serious repercussions in the industry.
  3. Public interest necessitates such exemption.
• The exemption is issued through an official notification.

Rationale: This allows for adaptability in cases where strict adherence to notice requirements could harm industrial interests or public welfare.

Grievance Redressal Machinery

This section mandates an internal dispute resolution mechanism:

• Applies to establishments with 20 or more workmen.
• Requires the formation of Grievance Redressal Committees with:
  • Equal representation from employers and workers.
  • A rotating chairperson (annually alternating between employer and worker representatives).
  • A maximum of six members, with provisions for women’s representation.
• Grievances must be addressed within 30 days.
• Workers can appeal committee decisions to the employer, who must respond within one month.
• This mechanism doesn’t affect workers’ rights to raise industrial disputes under the Act.

Reference of Disputes to Boards, Courts or Tribunals under the Industrial Disputes Act

The Industrial Disputes Act outlines the procedure for resolving industrial disputes through various channels, including Boards, Courts, Labour Courts, Tribunals, and National Tribunals. Section 10 of the Act provides a framework for referring disputes to these bodies based on the nature of the dispute, ensuring that matters are addressed through adjudication or inquiry to promote industrial peace.

Government’s Role in Referring Disputes

The appropriate government, whether the Central or State Government, has the authority to refer disputes to one of these adjudicating bodies when it believes an industrial dispute exists or is likely to occur. The referral is done in writing, and the type of referral depends on the specifics of the dispute.

• Board of Conciliation: The government can refer the dispute to a Board to facilitate a settlement between the disputing parties.
• Court of Inquiry: If the dispute or related matters need further investigation, they may be referred to a Court for inquiry.
• Labour Court: Disputes related to matters specified in the Second Schedule of the Act, such as dismissal or retrenchment, can be referred to a Labour Court for adjudication.
• Tribunal: Disputes concerning matters listed in the Second or Third Schedule, which cover more complex issues like wages and working conditions, can be referred to a Tribunal.

For disputes affecting fewer than 100 workers and related to matters from the Third Schedule, the government has the discretion to refer them to a Labour Court instead of a Tribunal.

Public Utility Services

In the case of disputes involving public utility services, such as transport or communication services, the government is required to refer the dispute to one of the adjudicating bodies once a notice of strike or lockout under Section 22 is given. The only exceptions are if the government finds the notice frivolous or unnecessary.

National Importance or Multi-State Disputes

When a dispute involves matters of national importance or affects industrial establishments across multiple states, the Central Government can refer the dispute to a National Tribunal. This referral is done regardless of whether the Central Government is the appropriate government for the dispute in question.

Applications for Reference by Parties

If both parties to a dispute (or even one party) apply for the matter to be referred for adjudication, the appropriate government must be satisfied that the applicants represent the majority of each side before making the referral.

Time Limit for Adjudication

Once an industrial dispute is referred to a Labour Court, Tribunal, or National Tribunal, the adjudicating body must deliver its award within a specified period, usually within three months. This timeline can be extended if requested by the parties and approved by the presiding officer of the adjudicating body.

Prohibition of Strikes or Lockouts

Once a dispute has been referred for adjudication, the government can issue an order prohibiting any strikes or lockouts in connection with the dispute. This helps maintain industrial harmony during the adjudication process.

Jurisdiction of National Tribunals

When a dispute is referred to a National Tribunal, no other Labour Court or Tribunal can have jurisdiction over that dispute. If any proceedings related to the same dispute are ongoing before a lower court or tribunal, they are automatically transferred to the National Tribunal.

Death of a Party in an Ongoing Dispute

The death of any party involved in the dispute, particularly a workman, does not cause the proceedings to lapse. The Labour Court, Tribunal, or National Tribunal continues the proceedings until an award is made.

Voluntary reference of disputes to arbitration

The Act allows for the voluntary resolution of industrial disputes through arbitration. This provision enables employers and workmen to refer an existing or anticipated industrial dispute to arbitration by mutual consent, before the dispute is referred to a Labour Court, Tribunal, or National Tribunal.

Key Provisions of Section 10A

1. Written Agreement for Arbitration: If both parties agree to arbitration, they must enter into a written agreement specifying the arbitrator or arbitrators. The agreement can include a single arbitrator or multiple arbitrators, including the presiding officer of a Labour Court, Tribunal, or National Tribunal. The arbitration agreement must be signed by all parties and must follow the prescribed format.
2. Appointment of Umpire: In cases where an even number of arbitrators is appointed, the agreement must provide for the appointment of an umpire. If the arbitrators are evenly divided in their opinion, the umpire steps in, and their decision becomes the binding arbitration award.
3. Notification and Publication: Once an arbitration agreement is signed, a copy must be sent to the appropriate government and the conciliation officer. The government is required to publish the agreement in the Official Gazette within one month of receipt. If the government is satisfied that the parties involved represent the majority of the workers and the employer, it may issue a notification allowing other concerned parties, not part of the original agreement, to present their case to the arbitrators.
4. Submission of the Arbitration Award: After investigating the dispute, the arbitrator(s) must submit a signed arbitration award to the appropriate government. If the government issues a notification under sub-section 3A, it can also prohibit the continuation of any strike or lock-out connected to the dispute.
5. Exclusion of Arbitration Act, 1940: Section 10A explicitly excludes the application of the Arbitration Act, 1940, to industrial dispute arbitrations under this section.

State-Specific Amendments

Several states have amended Section 10A to include additional provisions for handling industrial disputes.

Kerala and Karnataka Amendments (Section 10B)

Both Kerala and Karnataka have introduced Section 10B, which empowers the State Government to issue orders regulating the terms and conditions of employment in certain situations. If a dispute is referred to a Labour Court or Tribunal and the government believes it is necessary for public safety or industrial peace, it can mandate specific terms of employment for a period of up to six months or until the Labour Court/Tribunal issues an award.

These provisions ensure that essential services are maintained and public safety is protected during industrial disputes. Employers may be required to continue operations, and they can deduct any payments made under these orders from the monetary benefits awarded by the Labour Court or Tribunal.

Rajasthan Amendment (Section 10K and Chapter III-A)

Rajasthan has introduced Section 10K, allowing the State Government to enforce specific employment conditions and prohibit strikes or lockouts if necessary for public safety or industrial peace. This provision remains in effect until the dispute is resolved by an Industrial Tribunal.

Additionally, Rajasthan has created a new Chapter III-A, which formalises the arbitration process. The key features include:

• Submission of Disputes: Employers and representative unions can submit disputes to arbitration through a written agreement.
• Irrevocability of Arbitration: Once a submission is made, it remains irrevocable unless otherwise stated in the agreement.
• Reference to Industrial Tribunal: If no arbitrator is appointed, or if a dispute continues to pose a public threat, the State Government may refer the matter to an Industrial Tribunal for adjudication.

The amendment also emphasises the importance of ensuring that public order and essential services are maintained during industrial disputes.

Power to Issue Orders Regarding Terms and Conditions of Service

Section 10B empowers state governments to issue orders regarding employment terms when an industrial dispute has been referred to a Labour Court or Tribunal. The objective is to ensure public safety, maintain public order, secure essential services, and preserve industrial peace.

Employers and workmen can be directed to observe specific terms of employment.

Public utility services can be required to continue operations on specified terms.

The order ceases to operate after six months or once an award is given by the Tribunal or Labour Court.

• State Amendments:
  • Kerala and Karnataka have introduced similar provisions to issue orders in public interest during disputes, with the power to impose terms on employers and workmen.
  • Rajasthan has also incorporated provisions allowing the government to manage terms of employment and prevent strikes in public utility services.

Submission of Disputes to Arbitration

Section 10C introduces the concept of voluntary arbitration where employers and workmen can submit disputes to arbitration by mutual agreement. This agreement is called a “submission.”

Any industrial dispute can be referred to arbitration through a written agreement.

The agreement is registered with the appropriate authority, and the submission is considered irrevocable unless specified otherwise.

Arbitration proceedings follow the rules of the Arbitration Act, 1940, with the Industrial Tribunal overseeing legal matters arising during arbitration.

Proceedings in Arbitration

This section outlines the conduct of arbitration proceedings, emphasising the application of the Arbitration Act, 1940, where applicable. The powers of the Civil Court are vested in the Industrial Tribunal during arbitration.

The arbitrator follows the process as per the Arbitration Act, ensuring fairness in resolving disputes.

Special Case Reference to Industrial Tribunal

If a legal question arises during arbitration, the arbitrator can refer the matter to the Industrial Tribunal for a decision. This ensures that any legal issues are resolved by a competent authority.

The award by the arbitrator must align with the Tribunal’s decision on legal questions.

Award by Arbitrator

Once the arbitration process is complete, the arbitrator is required to make and sign an award after hearing both parties involved in the dispute.

The arbitrator’s award is final, provided it adheres to the law and is submitted in accordance with the procedure.

Reference to Industrial Tribunal if No Arbitrator is Appointed

In cases where no arbitrator has been appointed or an arbitration agreement does not specify an arbitrator, the State Government can refer the dispute to the Industrial Tribunal for adjudication.

This ensures that disputes are resolved even if arbitration fails or is not possible due to technicalities.

Power of the State Government to Refer Industrial Disputes to Tribunals

The State Government has the authority to refer disputes to the Industrial Tribunal if it believes that public peace or industrial harmony is at risk due to prolonged disputes.

The government can intervene to prevent public disorder or severe economic hardship.

When a dispute is referred to the Tribunal, any existing arbitration agreements become void.

Notice of Award to Parties

Once an award is made, the arbitrator or Tribunal must forward copies of the award to the parties involved, the Commissioner of Labour, the Registrar, and the State Government.

The award is registered and officially recorded by the Registrar.

Completion of Arbitration Proceedings

Arbitration proceedings are considered complete once the award is published as per Section 17 of the Act. This marks the formal end of the arbitration process.

Procedures and Powers of Conciliation Officers, Boards, Courts And Tribunals

This section of the article examines the procedures and powers granted to conciliation officers, Boards, Courts, Labour Courts, Tribunals, and National Tribunals under Section 11 of the Act.

Procedural Flexibility

Arbitrators, Boards, Courts, Labour Courts, Tribunals, and National Tribunals have the discretion to follow procedures they deem appropriate, subject to any rules made in this regard.

Powers of Entry

Conciliation officers and members of Boards, Courts, Labour Courts, Tribunals, or National Tribunals may enter premises of establishments related to a dispute after providing reasonable notice. This power facilitates on-site inquiries into existing or potential industrial disputes.

Judicial Powers

Boards, Courts, Labour Courts, Tribunals, and National Tribunals possess powers similar to those of Civil Courts under the Code of Civil Procedure, 1908. These include:

1. Enforcing attendance and examining individuals under oath
2. Compelling the production of documents and material objects
3. Issuing commissions for witness examinations
4. Other prescribed matters

Inquiries or investigations conducted by these bodies are considered judicial proceedings under sections 193 and 228 of the Indian Penal Code.

Powers of Conciliation Officers

Conciliation officers have specific powers to:

1. Enforce attendance for examination
2. Call for and inspect relevant documents
3. Verify the implementation of awards
4. Carry out other duties imposed by the Act

These powers are equivalent to those of Civil Courts under the Code of Civil Procedure, 1908, particularly in enforcing attendance and compelling document production.

Appointment of Assessors

Courts, Labour Courts, Tribunals, and National Tribunals may appoint assessors with specialised knowledge to advise on proceedings.

Public Servant Status

Conciliation officers, members of Boards or Courts, and presiding officers of Labour Courts, Tribunals, or National Tribunals are deemed public servants under section 21 of the Indian Penal Code.

Cost Allocation

Labour Courts, Tribunals, and National Tribunals have discretion over costs related to proceedings. They can determine who bears the costs, to what extent, and under what conditions. These costs can be recovered by the appropriate Government as land revenue arrears.

Civil Court Status

Labour Courts, Tribunals, and National Tribunals are considered Civil Courts for the purposes of sections 345, 346, and 348 of the Code of Criminal Procedure, 1973.

Execution of Awards and Settlements

Awards, orders, or settlements made by Labour Courts, Tribunals, or National Tribunals are executed according to the procedure for executing orders and decrees of Civil Courts. These bodies transmit their decisions to Civil Courts with jurisdiction for execution.

Duties of Authorities under the Industrial Disputes Act

The Act outlines specific duties for various authorities involved in resolving industrial disputes. These authorities include conciliation officers, Boards, Courts, Labour Courts, Tribunals, and National Tribunals. Each plays a crucial role in maintaining industrial harmony and resolving conflicts between employers and employees.

Conciliation Officers

Conciliation officers are the first line of intervention in industrial disputes. Their duties include:

1. Holding conciliation proceedings when an industrial dispute exists or is anticipated.
2. Investigating the dispute and all related matters.
3. Facilitating fair and amicable settlements between parties.
4. Submitting reports to the appropriate government, including:
   • A report with a signed memorandum if a settlement is reached.
   • A full report detailing the investigation, facts, and reasons if no settlement is achieved.
5. Completing the conciliation process within 14 days, unless an extension is approved.

Boards

When a dispute is referred to a Board, its duties are to:

1. Investigate the dispute thoroughly.
2. Encourage parties to reach a fair and amicable settlement.
3. Submit a report to the appropriate government, either:
   • A report with a signed settlement memorandum if successful, or
   • A detailed report of proceedings, findings, and recommendations if no settlement is reached.
4. Complete its work within two months, with possible extensions.

Courts

Courts are required to:

1. Inquire into matters referred to them.
2. Report their findings to the appropriate government.
3. Complete their inquiry within six months from its commencement.

Labour Courts, Tribunals, and National Tribunals

These bodies have the following duties:

1. Hold proceedings expeditiously when an industrial dispute is referred to them.
2. Submit their award (decision) to the appropriate government within the specified period.

Form, Publication and Binding Nature of Reports and Awards under the Industrial Disputes Act

Form of Reports and Awards

The form and content of reports by Boards or Courts, and awards by Labor Courts, Tribunals, or National Tribunals, are laid down in Section 16 of the Act.

• Reports by Boards or Courts: These reports must be documented in writing and signed by all members of the Board or Court. In case of any dissent among the members, any member can record their minute of dissent from the report. This ensures transparency and reflects any disagreements within the Board or Court.
• Awards by Labor Courts, Tribunals, or National Tribunals: Similarly, the awards made by Labor Courts, Tribunals, or National Tribunals must also be in writing and signed by the presiding officer. The emphasis on written documentation ensures accountability and clarity, providing a formal basis for subsequent legal enforcement.

Publication of Reports and Awards

Section 17 highlights the process by which reports and awards are published, ensuring that these documents are accessible to the public and binding on the concerned parties.

• Time Frame for Publication: Every report of a Board or Court, along with any dissenting opinions, and every award of a Labor Court, Tribunal, or National Tribunal must be published by the appropriate government within thirty days of receiving it. This period provides ample time for the government to review the award while ensuring that delays are minimised.
• Finality of Awards: Once an award is published, it becomes final and cannot be questioned by any court, subject to the provisions of Section 17A. This clause gives legal finality to the awards and prevents any further judicial challenge, thus promoting speedy resolution of disputes.

Commencement and Enforceability of Awards

Section 17A specifies when an award becomes enforceable and the conditions under which the government may modify or reject an award.

• Commencement: An award becomes enforceable after thirty days of its publication, unless the government decides otherwise on grounds of public interest. The government may declare that the award shall not become enforceable if it believes that enforcing the award would harm national interests, such as the economy or social justice.
• Rejection or Modification of Awards: If the government issues such a declaration, it has ninety days to modify or reject the award. After such modification or rejection, the decision must be laid before the legislature. This provision grants the government flexibility in cases where enforcing an award may conflict with broader national concerns.

Binding Nature of Settlements and Awards

Section 18 clarifies on whom settlements and awards are binding. It differentiates between settlements reached through conciliation and arbitration awards.

• Settlement Without Conciliation: A settlement reached between an employer and workers outside of a conciliation process is binding only on the parties who were part of the agreement.
• Settlement Through Conciliation and Awards: Settlements arrived at through conciliation proceedings, or arbitration awards that have become enforceable, are binding on all parties involved in the industrial dispute, including employers, workmen, and any heirs or successors. This ensures that the settlement or award is far-reaching and covers all concerned parties.

Period of Operation of Settlements and Awards 

The Act also governs how long a settlement or award remains operational.

• Settlements: A settlement comes into effect on the agreed date or, if no date is specified, on the date when the settlement is signed. If no specific period is mentioned, the settlement remains in effect for six months from the date of signing and continues to bind the parties until either party gives notice of its intent to terminate the agreement.
• Awards: Awards, on the other hand, remain in effect for one year from the date they become enforceable. The government, however, can reduce or extend this period, but the total period of operation cannot exceed three years.

This section is essential for maintaining stability in labour relations, as it provides a clear timeline for when settlements and awards remain binding.

Confidentiality of Certain Matters

Section 21 provides for the confidentiality of sensitive information disclosed during the conciliation or inquiry process.

• Protection of Confidential Information: The Act protects the confidentiality of any information obtained about a trade union, business, or individual, as long as a written request for confidentiality is made by the concerned party. No information shared during these proceedings can be disclosed without the consent of the party who provided it.

This protection is crucial in ensuring that parties are willing to share sensitive information during the dispute resolution process without fear of it being used against them later.

Strikes And Lockouts under the Industrial Disputes Act

In industrial relations, strikes and lockouts are common tools used by workers and employers, respectively, to express disagreements or demands. The Industrial Disputes Act in India governs these activities to ensure that they are carried out in an orderly and lawful manner.

Prohibition of Strikes and Lockouts

The law establishes clear guidelines for strikes and lockouts, particularly in industries considered “public utility services” (such as transport, water, and electricity). For workers, going on strike requires giving advance notice, as detailed below:

1. Notice Period: Workers must give their employer a notice of the strike at least six weeks before starting the strike.
2. Cooling-Off Period: After providing the notice, the strike cannot commence for 14 days.
3. Expiry of Strike Notice: The strike cannot begin before the date specified in the notice.
4. During Conciliation: No strikes are allowed while conciliation proceedings are in progress and for seven days after their conclusion.

Similarly, employers cannot lock out their workers in public utility services without following similar notice requirements:

1. Notice Period: Employers must issue a lockout notice six weeks in advance.
2. Cooling-Off Period: A lockout cannot begin within 14 days of issuing the notice.
3. Expiry of Lockout Notice: The lockout cannot start before the date mentioned in the notice.
4. During Conciliation: Lockouts are prohibited during conciliation proceedings and seven days after their conclusion.

Exceptions exist where there is already a strike or lockout ongoing. In such cases, formal notice may not be required, but employers must inform the appropriate authority on the day the strike or lockout is declared.

General Prohibition of Strikes and Lockouts

The law also outlines a general prohibition of strikes and lockouts for all industrial establishments under specific circumstances:

1. During Conciliation Proceedings: Strikes and lockouts are prohibited during conciliation and for seven days after the proceedings.
2. During Legal Proceedings: These activities cannot take place during the pendency of cases before Labour Courts, Tribunals, or National Tribunals, and for two months after the conclusion of such cases.
3. When a Settlement or Award is in Operation: If a settlement or award covers the dispute, strikes or lockouts are prohibited while it remains in effect.

Illegal Strikes and Lockouts

Any strike or lockout commenced or continued in violation of the above provisions is considered illegal. However, if a strike or lockout started before the dispute was referred to a Board or Tribunal and was legal at the time of its commencement, it can continue without being classified as illegal.

Additionally, if a strike is declared in response to an illegal lockout or vice versa, the retaliatory action will not be deemed illegal.

Financial Support for Illegal Strikes and Lockouts

The law further prohibits any person from financially supporting an illegal strike or lockout. This provision ensures that there is no direct encouragement or aid for unlawful industrial actions.

Layoffs And Retrenchment under the Industrial Disputes Act

The Act provides crucial protections for workers in cases of lay-offs and retrenchment. These provisions aim to balance the needs of employers to manage their workforce with the rights of workers to job security and fair compensation. 

Understanding Lay-off

A lay-off occurs when an employer is unable to provide work to employees, typically due to economic conditions, lack of raw materials, or other operational reasons. The Act provides specific rules for lay-offs:

1. Compensation: Workers who have completed at least one year of continuous service are entitled to compensation during a lay-off period. This compensation is equal to 50% of their basic wages and dearness allowance.
2. Duration: Compensation is payable for all days of lay-off, except for weekly holidays. However, if a lay-off extends beyond 45 days in a 12-month period, no compensation is required after the first 45 days, provided there’s an agreement between the worker and employer.
3. Exceptions: Certain workers, such as “badli” (temporary replacement) workers or casual workers, are not entitled to lay-off compensation.

Retrenchment Process

Retrenchment refers to the termination of a worker’s employment for any reason other than punishment. The Act outlines specific conditions for retrenchment:

1. Notice Period: Employers must provide one month’s written notice or payment in lieu of notice to workers being retrenched.
2. Compensation: Retrenched workers are entitled to compensation equivalent to 15 days’ average pay for each completed year of continuous service (or any part thereof exceeding six months).
3. Government Notification: The employer must notify the appropriate government authority about the retrenchment.
4. Last In, First Out: In general, the most recently hired employees in a particular category should be retrenched first, unless the employer has valid reasons to do otherwise.
5. Re-employment Priority: If an employer decides to hire again, retrenched workers must be given preference for re-employment.

Special Cases

1. Transfer of Undertakings: When an undertaking is transferred to a new owner, it’s treated as retrenchment, and workers are entitled to notice and compensation. However, exceptions exist if service is uninterrupted and terms remain favourable.
2. Closure of Undertakings: In case of closure, workers are entitled to retrenchment compensation. If the closure is due to unavoidable circumstances, the compensation is limited to three months’ average pay.

Applicability

These provisions apply to industrial establishments employing 50 or more workers. However, they don’t apply to establishments of a seasonal character or where work is performed only intermittently.