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The Industrial

Disputes Act, 1947


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OBJECTIVES
Investigate and settlement of Industrial
Disputes.
Creation of different machineries of
settlement of Disputes.
Right to workman for strike and right to
workman for lock out
Formalities to be observed for lay off,
retrenchment and closure.
To extent protection to certain workman
Formalities to be observed for recovery of
dues to a workman from employer
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Define Industrial Dispute

Industrial Dispute means any dispute 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 or labour, of
any person.

Settlements & Awards


Settlement is defined in Sec. 2(p) of the Industrial Disputes act
envisages 2 categories:
(a)
a settlement which is arrived at in the course of conciliation
proceedings.
(b) a
agreement between the employer & the workmen arrived at
otherwise than the course of conciliation proceedings.
Awards is defined as in Sec. 2 (b) as an interim or a final
determination of any industrial dispute or of any question
relating thereto, by any Labour Court, Industrial Tribunal or
National Industrial Tribunal.
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On whom it is binding:
i.

All the parties to the industrial dispute;

ii.

All other parties summoned to appear in the proceedings as


parties to the dispute unless they were so summoned without
proper cause;

iii.

Where a party referred to in clause (a) or clause (b) is an


employer, his heirs, successors or assignees in respect of the
establishments to which the dispute relates.

iv.

Where a party referred to in clause (a) or clause (b) is


composed of workmen, all persons who were employed in the
establishment or part of the establishment , as the case may
be, to which the dispute relates on the date of the dispute & all
persons who subsequently become employed in that
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establishment or part.

Period of Binding
Settlements:

A settlement arrived at in the course of conciliation


proceedings is binding for a period agreed upon by the
parties.

If no such period is agreed upon, the settlement will remain in


force for a period of 6 mths. From the date on which the
memorandum of settlement is signed by the parties to the
dispute.

It will continue to be binding until the expiry of 2 mths from


the date on which one of the parties gives notice in writing to
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the other of its intention to terminate the settlement.

Awards:
i.

An award is binding & will come into operation on the expiry of 30 days from
the date of its publication.

ii.

It will remain in operation for a period of 1 year from the date on which the
award becomes enforceable.

iii.

Government may reduce the said period & fix such periods as it thinks fit. The
government may also extend the period of operation by any period not exceeding
1 yr. at a time but the total period of operation of any award cannot exceed 3 yrs.
From the date on which it comes into operation.

iv.

Even if period of operation of an award expires, it shall be binding on the parties


until 2 mths have elapsed from the date on which notice is given by one party
bound by the award to the other party intimating its intention to terminate the
award.

v.

If for any reason the award does not become enforceable, it can never come into
operation. The date on which an award comes into operation may or may not be
the date on which it becomes enforceable.
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Penalties & Case studies of settlement &


awards
Penalty for breach of settlement or award:
i.
ii.
iii.

Shall be punishable with imprisonment for a term which may extend to 6 mths.
Or with fine.
Or with both (and where the breach is continuing one, with a further fine which
may extend to Rs. 200 for every day during which the breaches continues after
the conviction for the first.
The court trying the offence, if it fines the offender, may direct that the whole or
any part of the fine realised from him shall be paid, by way of compensation, to
any person who, in its opinion, has been injured by such breach.

Case Studies:
i.
ii.

Management of Northern India Theatres vs. Presiding Officer Labour Court,


Delhi. (1975-I LLJ. 235)
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Volkart brothers vs. T.V. Chellapa & Others (1954-7 FJR. 513)

Strikes

Sec. 2(q) defines a strike as follows:


i.
ii.

The 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
accept employment.

Following ingredients can be postulated from the definition of


strike:
i. Plurality of workmen.
ii. Cessation of work or refusal to continue to work.
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iii. Acting in combination or concerted action under a common understanding.

General prohibition of strikes:


No group of workman may strike in the following 5 situations:
1.
2.
3.
4.
5.

Conciliation going on before a Board of Conciliation & 7 days


thereafter.
Adjudication before a Labour Court or Tribunal & 2 mths.
thereafter.
Appropriate government prohibits the continuance of any strike.
Arbitration before an Arbitrator & 2 mths. thereafter.
A settlement or an award is in operation.
(Note: prohibition restricted to those matters only which are
covered by the settlement or award.)

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DEFINE PUBLIC UTILITY SERVICE

Any railway service or any transport service for the


carriage of passenger or goods by air
Any service in, or in connection with the working or, any
major port or dock
Any section of an industrial establishment, on the
working
of which the safety of the establishment, or the workmen
employed therein depends

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Any industry which supplies power, light or water to the


public
Any system of public conservancy or sanitation
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.

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Section 2(A)

When employer dismisses discharges or retrenches or


terminates the services of a workman any dispute or
difference between and his employer connected with
or

arising

out

of

such

discharge,

dismissal,

retrenchment or termination can be an industrial


dispute. Not withstanding that no other workman or
union is a party to the dispute.
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section 2(A)(1)

In case of discharge, dismissal, retrenchment or


termination of a workman, the workman himself
can rise a dispute directly before the conciliation
officer. If no settlement is reached then the worker
can directly go to the labour court even without
reference by the government for adjudication.

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different machineries available for settlement of dispute?

1.Works Committee
2.Conciliation Officer
3.Conciliation Board
4.Court of Enquiry
5.Voluntary Arbitration
6.Labour Court
7.Tribunal
8.National Tribunal
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duties of conciliation officer


1.Where any industrial dispute exists or is apprehended, the
conciliation officer may, or where the dispute relates to a public utility
service and a notice under section 22 has been given, shall, hold
conciliation proceedings in the prescribed manner.
2.The Conciliation Officer shall, for the purpose of bringing about a
settlement or the dispute, without delay, investigate the dispute and all
matters affecting the merits and the right settlement thereof and may do
all such things as he thinks fit for the purpose of inducing the parties to
come to the fair and amicable settlement of the dispute.

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3. If a settlement of the dispute or of any of the matters in dispute is


arrived at in the course of the conciliation proceedings the
conciliation officer shall send a report thereof to the appropriate
Government (or an officer authorized in this behalf by the
appropriate Government) together with a memorandum of the
settlements signed by the parties to the dispute.
4. If no such settlement is arrived at, the conciliation officer shall,
as soon as practicable after the close of the investigation, send to
the appropriate Government a full report setting forth the steps
taken by him for ascertaining the facts and circumstances
relating to the dispute and for bringing about a settlement
thereof, together with a full statement of such facts and
circumstances, and the reasons on account of which, in his
opinion, a settlement could not be arrived at.
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5. If, on a consideration of the report referred to in sub-section (4),


the appropriate Government is satisfied that there is a case for
reference to a board (labour court, tribunal or national tribunal) it
may make such reference. Where the appropriate Government
does not make such a reference it shall record and communicate
to the parties concerned its reasons therefore.
6. A report under this section shall be submitted within fourteen
days of the commencement of the conciliation proceedings or
within such shorter period as may be fixed by the appropriate
Government.

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For what conditions such notices are required?

The conditions are


Wages, including the period and mode of payment
Contribution paid or payable, by the employer to
any provident fund or pension fund or for the benefit
of the workmen under any law for the time being in
force.
Compensatory and other allowances

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Hours of work and rest intervals


Leave with wages and holidays
Starting, alteration or discontinuance of
shift working otherwise than in
accordance with the standing orders

20

Classification by grades
Withdrawal of any customary concession or
privilege or changing usage.
Introduction of new rules of discipline, or
alteration of existing rules, except in so far as
they are provided in Standing Orders

21

Rationalization, standardization or
improvement of plant or technique which is
likely to lead to retrenchment of workmen.
Any increases or deduction (other than
casual) in the number of persons employed or
to be employed in any occupation or process
or department or shift, (not occasioned by
circumstances over which the employer has
no control).

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9A. Notice of change


No, employer, who proposes to effect any change in the conditions of
service applicable to any workman in respect of any matter specified in
the Fourth Schedule, shall effect such change, (a) Without giving to the workmen likely to be affected by such change a
notice in the prescribed manner of the nature of the change proposed
to be effected; or
(b) Within twenty-one days of giving such notice

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Provided that no notice shall be required for effecting any such


change.
(a) Where the change is effected in pursuance of any
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[settlement or award]; or
(b) Where the workmen likely to be affected by the change are
persons to whom the Fundamental and Supplementary Rules,
Civil Services (Classification, Control and Appeal) Rules, Civil
Services (Temporary Service) Rules, Revised Leave Rules, Civil
Service Regulations, Civilians in Defence Services
(Classification, Control and Appeal) Rules or the Indian Railway
Establishment Code or any other rules or regulations that may
be notified in this behalf by the appropriate Government in the
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Official Gazette, apply

SECTION-11A.

Powers of Labour Court, Tribunals and


National Tribunals to give appropriate relief
in case of discharge or dismissal of
workmen.

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Where an industrial dispute relating to the discharge or


dismissal of a workman has been referred to a Labour
Court, Tribunal or National Tribunal for adjudication and, in
the course of the adjudication proceedings, the Labour
Court, Tribunal or National Tribunal, as the case may be, is
satisfied that the order of discharge or dismissal was not
justified, it may, by its award, set aside the order of
discharge or dismissal and direct re-instatement of the
workman on such terms and conditions, if any, as it thinks
fit, or give such other relief to the workman including the
award of any lesser punishment in lieu of discharge or
dismissal as the circumstances of the case may require 26:

Provided that in any proceeding under this


section the Labour Court, Tribunal or National
Tribunal, as the case may be, shall rely only on
the materials on record and shall not take any
fresh evidence in relation to the matter

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Additional restrictions on
strikes in Public Utility
Services (Sec. 22).

Strike notice must be given to the employer & Conciliation


Officer.
Strike must not take place 14 days after the notice has been given.
Strike must not take place after 6 weeks from the notice.
Strike must not take place before the day, if any, specified in the
strike notice.
Strike must not take place during conciliation before a Conciliation
Officer & 7 days after the conclusion of such proceedings.
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Penalties
Penalty for illegal
strikes (Sec 26):
Any workman who
commences, continues or
other wise acts in furtherance
of a strike which is illegal
under this Act, shall be
punishable, with
imprisonment for a term
which may extend to 1 mth.,
or with fine which may extend
to Rs. 50, or with both.

Penalty for instigation


of illegal strikes (sec.
27):
Any person who instigates or
incites others to take part on
an illegal strike in punishable
with imprisonment for a term
upto 6 mths., or a fine upto
Rs. 1000, or with both.

Penalty for giving


financial aid to illegal
strikes (sec. 28):
Any person who knowingly
expends or applies any
money in direct support of
an illegal strike is punishable
with imprisonment for a term
upto 6 mths., or a fine upto
Rs. 1000, or with both.

Case Studies:

1. Lakshmi Devi Sugar Mills vs.


Ram Sarup (1957-I LLJ. 17
S.C.)
sudden concerted
stoppage of work.

strikers
cannot be exempted from
the consequences.
employers has the
right to suspend the striking
workmen.
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LOCK-OUTS
A lock-out 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 persons
employed by him.

It means the closure of the place of business and not


closure of business itself.
Lock-out is usually used by the employer as a weapon of
collective bargaining.
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ILLEGAL LOCK-OUTS
Penalty for illegal lockouts
An illegal lock-out is
punishable for a term
extending to 1 month or with
fine up to Rs. 1000 or with
both.

Case Studies : Northbook Jute Co. Ltd. Vs.


Their Workmen
Indian Cork Mills (P) vs. Their
Workmen

Penalty for instigation of


illegal lock-outs
An illegal lock-out is
punishable with imprisonment
for a term which may extend to
6 months or a fine up to Rs.
1000 or with both.

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Lay off (Chpt. VA & VB)


Section 2 (KK) of the Act defines lay off as the failure, refusal
or inability of an employer on account of shortage of coal & power
or raw material or the accumulation of stocks or the breakdown of
machinery or for any other reason to give employment to a
workmen whose name is borne on the muster roll of his industrial
establishment & who has not been retrenched.
Lay off provisions of the Act:
i. Sec, 2 (m) of the Factories Act, 1948.
ii. Sec. 2 (i) of Mines Act, 1952. &
iii.Sec. 2 (f) of Plantation Labour Act, 1951.
In Industrial undertaking where lay off provisions apply, only
those workmen will be entitled to lay off compensation.
A workmen is entitled for compensation for all days of lay off
unless there is an agreement to the contrary between him & the
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employer to the limit of 45 days in a year.

No compensation shall be paid to the workmen:


i. If he refuses to accept any alternative employment in the
same establishment.
ii. If he does not present himself for work at the establishment at
appointed time during working hours atleast once a day.
iii. If such laying off is due to strike or slowing down of
production on the part of workmen.
If a workmen has been laid off by his employer due to
shortage of power or natural calamity, the appropriate
government makes an enquiry if he thinks fit. If the authority
does not communicate the permission within 2 mths. With the
employer then lay off is deemed to be granted. If the
appropriate government refuses the permission for lay off,
then lay off is deemed illegal, then the workmen is entitled
for all the benefits from the time he has been laid off.

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Lay Off (Chpt. VA & VB)


Cases regarding Lay-off :-3
1. Sur Enamel & Stamping Works Ltd. V/s Their
Workman(1963-II LLJ 367):
Supreme Court said that for 1 year of continuous service it must be
shown that a person must be employed for period not less than 12
months and during those 12 months he must have worked not less
than 240 days.

2. Surendra Kumar Verma V/s Central Government


industrial Tribunal (1981-I LLJ.386):
Here the Supreme Court said that it is not necessary for an
employee to have worked for the period of 12 months and just
having worked for not less than 240 days will qualify within the
terms.

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3. Madras High Court in P. Joseph and


others V/s Loyal Textile Mills (1975-I LLJ
499):

Badli workman who has completed 240 days of


service is entitled to lay-off compensation but here
the badli workman had been excluded from lay-off
compensation.

Penalty for Lay-off:Any employer who contravenes the provisions of lay off is punishable with imprisonment for a term which
may extend to Rs.1000/- or both.

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Retrenchment
(Chpt. VA & VB)

i.
ii.
iii.

Sec. 2 (oo) defines Retrenchment as the termination by the


employer of the service of the workman for any reason
whatsoever, otherwise than a punishment inflicted by way of
disciplinary action.
Retrenchment does not include voluntary retirement
superannuation, termination of employment on grounds of ill
health; do not amount to retrenchment.
No workmen who has been employed for 1 year can be
retrenched until:
1 month notice in written & reason for retrenchment.
15 days average pay for every completed year of service.
Notice served to the appropriate government.
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I.
II.
III.
IV.
V.

VI.
VII.

No workmen employed in any industrial establishment who has been to


continuous service for not less than 1 yr. under an employer shall be
retrenched by that employer until:
Has been given 3 mths notice in written, indicating the reasons for
retrenchment. no such notice shall be necessary if the retrenchment is
under an agreement which specify a date for termination of service.
Compensation shall be equivalent to 15 days average pay for every
completed years of continuous service or any part thereof in excess of 6
months
Notice shall be given to appropriate government or such authority & the
permission of such government or authority is obtained.
Government or authority after making inquiry may grant or refuse the
permission to the employer within 3 mths. Of the date of service of the
notice.
if it does not communicate within 3 mths. Of such notice then the
retrenchment is legal.
if it does refuse the permission then the retrenchment is illegal.
Sec. 25 N is constitutionally valid.
Authority under Sec. 25 - N exercises powers which are quasi-judicial &
not purely administrative.
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Retrenchment :- Case Study


Indian Hume Pipe Co. Ltd. Vs. Their Workmen
( 1959-II LLJ. 830 )
State Bank of India vs. R. Sundaramony
( 1976-I LLJ. 478 )

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Closure

Closure has been defined as the permanent closing down of a place


of employment or part there of.

a)
b)

60days prior notice to the appropriate government. But this section


shall not apply to:
An undertaking in which less than 50 workmen are employed or
were employed on an average per working day in the preceding 12
months.
An undertaking setup for the construction of buildings, bridges,
roads, canals, dams, or for other construction, work or project.

a)
b)

Under Sec. 25 FFA:

Under Sec. 25 FFF:

An employer / workmen who is in continuous service for a period on


1 yr. is entitled for notice of compensation.
Compensation under unavoidable circumstances
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not exceed the average pay for 3 mths.

The act was amended in march 1976.


Imposing some restrictions on the employers right to layoff, retrenchment
& closure.
This special provisions shall apply to all industrial establishments (except
seasonal) in which not less than 300 workmen were employed on an
average per working day for the preceeding 12 months.

a)
b)

Under Sec. 25 0

An employer who intends to close down an undertaking or an industrial


establishment shall serve,
Approval at least 90 days before the date.
It shall not apply to an undertaking setup for the construction of buildings,
bridges, roads, dams, canals, or for other construction work.
If the appropriate government does not communicate the permission
within period of 2 months from the application date
The permission applied for shall be deemed to have been granted on
the expiration of the said period of 2 months.
If the permission for closure is refused
The closure of the undertaking shall be deemed to be ill legal.
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Closure-5B(sec25-o)
Compensation to workmen
in case of closing down
(s.25 fff)
Case - Engineering Metal &
General Workers Union v/s
M.Jeeveanlal Ltd
Case - K.O.Anthony v/s
P.V.kumaran Sec. 25F(b)
Penalties - for illegal closure
(s.25r)

Differences:
LAY-OFF &
RETRENCHMENT
RETERNCHMENT &
CLOSURE
(case: Raj Hans Press v/s
Labour Court Delhi)

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