Labour Laws Act

Labour Disputes in India

Labour laws in India, are majorly governed by the provisions of the Indian Constitution, Contract Laws, various Special Labour Laws and a plethora of State enacted laws. Thus, broadly, the labour laws in India can be categorized as under:

  1. Constitution of India;
  2. Indian Contract Act;
  3. Special Laws like the Industrial Disputes Act, Payment of Wages Act, Payment of Gratuity Act, Workmen’ Compensation Act, Contract Labour (Regulation and Abolition) Act, Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act etc.
  4. State Laws – as enacted under the State List in the Seventh Schedule under the Constitution of India.

The Law which majorly regulates and governs labour disputes in India is the Industrial Disputes Act of 1947 (hereinafter referred to as “IDA”).

The IDA was formulated with the object to make provision for the investigation and settlement of industrial disputes. Some of the key features of IDA are discussed below:

What is industrial dispute?

As per the definition under Section 2(k) of the IDA an “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 of labour, of any person.

The definition of the term “industrial dispute” was expanded in the landmark judgment of Bangalore Water-Supply & Sewarage Board Etc.v. R. Rajappa & Others (1978 AIR  548) by Hon’ble Justice Krishna Iyer. This judgement, delivered by a seven judge bench, propounded an extensive definition for industrial disputes and included every possible organisation having worker-employer relations in the industry.

As per the definition under Section 2(j) of the IDA “industry” refers to any systematic activity carried on by co-operation between an employer and his workmen for the production, supply or distribution of goods or services with a view to satisfy human wants or wishes.

As per the definition clause under Section 2(s) of the IDA, “workman” refers to any person employed in any industry to do any manual, unskilled, skilled, technical, operational, clerical or supervisory work and in relation to an industrial dispute, includes any such person who has been dismissed, discharged or retrenched in connection with, or as a consequence of a dispute.

What are the authorities under the IDA?

  1. Labour Courts and Tribunals in IndiaIDA provides for the constitution of Labour Courts and Tribunals for adjudication of industrial disputes. The Labour Courts and Tribunals are constituted by the appropriate Government by issuing notification in the Official Gazette.
  2. National Tribunal – The IDA provides that the Central Government may constitute National Tribunal for adjudication of an industrial dispute which in the opinion of the Central Government may involve questions of national importance.
  3. Works Committee- A works committee is constituted by the employer of an industrial establishment on a special order issued by the appropriate Government wherein the number of workmen employed is one hundred or more. The Committee consists of the representatives of the employer and the workmen. The function of the Committee is to work towards maintaining a harmonious relationship between the employee and employer.
  4. Conciliation Officers/ Boards of Conciliation- Conciliation Officers are appointed by the appropriate Government who are entrusted with the duty of mediating and promoting the settlement of industrial disputes.
  5. Courts of Inquiry – are constituted by an appropriate Government for inquiring into any matter connected with or relevant to an industrial dispute.

Notice of Change under the IDA

Section 9A entails the provision for Notice of Change and prohibits an employer from making any changes in the terms of service without giving any notice to the employee about the nature of change.

Reference of Disputes to Arbitration

IDA provides that where any industrial dispute exists or is apprehended the employer and workmen may agree to refer the dispute to arbitration.

Strikes and Lock-outs India

Chapter V of IDA lays down the provision of strikes and lockouts. The word “strike” refers to cessation of work or refusal under a common understanding by the employees of an industry (section 2(q)). “Lock-out” refers to the temporary closing of a place of employment or refusal by the employer to continue to employ any number of employees (section 2(l)).

Notice before strikes or lockouts:

The IDA prohibits an employee from going on a strike in breach of contract without giving the employer a notice about the strike either six weeks prior to the strike or within 14 days after giving the notice. The IDA also prohibits an employer from lock out of any of the employee without giving the workmen a notice about the lock-out either six weeks prior to the lock-out or within 14 days after giving the notice. If a strike or lock-out is commenced in contravention of the aforesaid conditions then the same becomes an illegal strike or lock-out under the IDA.

Lay-off and Retrenchment in India

“Lay-off” refers to refusal by the employer to employ workmen (whose name is borne on the muster rolls) on account of shortage of any resources or raw- materials, accumulation of stocks, breakdown of machinery or natural calamity. The IDA provides for the provision of compensation for laid-off employees, provided that the said employees have completed a tenure of one year of continuous service under the employer. In such cases, the employee is entitled to a compensation of 50% of the basic wages and dearness allowance which is otherwise payable to the employee.

“Retrenchment” refers to the termination by the employer of the service of a workman for any reason otherwise than as a punishment inflicted by way of a disciplinary action. The IDA provides that in case of retrenchment it is mandatory for the employer to give a notice of one month in writing indicating the reasons for retrenchment.

Unfair Labour Practices in India

The IDA under Chapter V-C exclusively deals with the provisions of unfair labour practices and strictly prohibits the same. The Act also lays down penalty for committing unfair labour practices which is an imprisonment for six months or fine or both.

Some notable judgments on Labour disputes in India

Randhir Singh v. Union of India (1982 AIR 879)In this landmark case, the Apex Court in view of Articles 14, 16, 19 and 39 (d) observed that ‘equal pay for equal work’ is not an abstract doctrine but one of substance. The Court in the case further opined that “we are of the view that the principle ‘Equal pay for Equal work’ is deducible from the Articles of the Constitution and may be properly applied to cases of unequal scales of pay, based on no classification or irrational classification.”

Amita v. Union of India (2005 (3) SLJ 157 CAT) In this case, the Supreme Court held that the expression “matters relating to employment or appointment” contained in Article 16(1) includes all matters in relation to employment both prior and subsequent to the employment which are incidental to the employment and form part of the terms and conditions of such employment.

Badrinath v. Govt. of T.N. (AIR 2000 SC 3243) In this case, the Court held that the right to be considered for promotion by the Departmental Promotion Committee is a fundamental right guaranteed under Article 16 provided a person is eligible and is in the zone of consideration, but the “consideration” must be “fair” and according to the established principles governing service jurisprudence. 

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