Industrial disputes act


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Industrial disputes act

  1. 1. Industrial Disputes Act, 1947----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- ---------------The objective of the Industrial Disputes Act is to secure industrial peace and harmony by providingmachinery and procedure for the investigation and settlement of industrial disputes by negotiations.Various studies indicate that Indian labour laws are highly protective of labour, and labour markets arerelatively inflexible. These laws apply only to the organised sector. Consequently, these laws haverestricted labour mobility, have led to capital-intensive methods in the organised sector and adverselyaffected the sector’s long-run demand for labour. Labour being a subject in the concurrent list, State-levellabour regulations are also an important determinant of industrial performance. Evidence suggests thatStates, which have enacted more pro-worker regulations, have lost out on industrial production ingeneral. -- (Ministry of Finance, 2006, p. 209the Industrial Disputes Act (IDA) of 1947. Particular attention has been paid to its Chapter V-B, introducedby an amendment in 1976, which required firms employing 300 or more workers to obtain governmentpermission for layoffs, retrenchments and closures. A further amendment in 1982 (which took effect in1984) expanded its ambit by reducing the threshold to 100 workers. It is argued that since permission isdifficult to obtain, employers are reluctant to hire workers whom they cannot easily get rid of. Job securitylaws thus protect a tiny minority of workers in the organised sector and prevent the expansion of industrialemployment that could benefit the mass of workersoutside. It is also argued that the restriction on retrenchment has adversely affected workplace discipline,while the threshold set at 100 has discouraged factories from expanding to economic scales ofproduction, thereby harming productivity. Several other sections of the IDA allegedly have similar effects,because they increase workers’ bargaining strength and thereby raise labour costs either directly throughwages or indirectly by inhibiting work reorganization in response to changes in demand and technology.The Act also lays down 1. The provision for payment of compensation to the workman on account of closure or lay off or retrenchment. 2. The procedure for prior permission of appropriate Government for laying off or retrenching the workers or closing down industrial establishments 3. Unfair labour practices on part of an employer or a trade union or workers.[edit]ApplicabilityThe Industrial Disputes Act extends to whole of India and applies to every industrial establishmentcarrying on any business, trade,manufacture or distribution of goods and services irrespective of thenumber of workmen employed therein. Every person employed in an establishment for hire or rewardincluding contract labour, apprentices and part time employees to do any manual, clerical,skilled,unskilled, technical, operational or supervisory work, is covered by the Act. This Act though does notapply to persons mainly in managerial or administrative capacity,persons engaged in a supervisorycapacity and drawing > 10,000 p.m or executing managerial functions and persons subject to Army Act,Air Force and Navy Act or those in police service or officer or employee of a prison.
  2. 2. [edit]Applicability of Parent Act (Unknown Act - ) None[edit]Related Sections Of The Act Section 1 : Short title, and commencement Section 9-B: Power of Government to exempt[edit]Important Definitions Section 2A : Appropriate Government Section 2BB: Banking company Section 2G : Employer Section 2J : Industry Section 2K : Industrial dispute Section 2A : Industrial dispute between individual and employer Section 2KA: Industrial establishment or undertaking Section 2KK: Insurance company Section 2LA: Major port Section 2LB: Mine Section 2N : Public utility service Section 2O : Railway company Section 2RR: Wages[edit]Related Schedules Schedule I - S 2(n)(6): Industries Which May Be Declared Public Utility Services Schedule II - S7 : Matters Within The Jurisdiction Of Labour Courts Schedule III - S 7A : Matters Within The Jurisdiction Of Industrial Tribunal An industrial dispute may be defined as a conflict or difference of opinion between management and workers on the terms of employment. It is a disagreement between an employer and employees representative; usually a trade union, over pay and other working conditions and can result in industrial actions. When an industrial dispute occurs, both the parties, that is the management and the workmen, try to pressurize each other. The management may resort to lockouts while the workers may resort to strikes, picketing or gheraos. As per Section 2(k) of Industrial Disputes Act,1947, an industrial dispute in defined as any dispute or difference between employers and employers, or between employers and workmen, or between workmen and which is connected with the employment or non-employment or the terms of employment or with the conditions of labor, of any person.
  3. 3. This definition includes all the aspects of a dispute. It, not only includes the disagreement between employees and employers, but also emphasizes the difference of opinion between worker and worker. The disputes generally arise on account of poor wage structure or poor working conditions. This disagreement or difference could be on any matter concerning the workers individually or collectively. It must be connected with employment or non-employment or with the conditions of labor. From the point of view of the employer, an industrial dispute resulting in stoppage of work means a stoppage of production. This results in increase in the average cost of production since fixed expenses continue to be incurred. It also leads to a fall in sales and the rate of turnover, leading to a fall in profits. The employer may also be liable to compensate his customers with whom he may have contracted for regular supply. Apart from the immediate economic effects, loss of prestige and credit, alienation of the labor force, and other non-economic, psychological and social consequences may also arise. Loss due to destruction of property, personal injury and physical intimidation or inconvenience also arises. For the employee, an industrial dispute entails loss of income. The regular income by way of wages and allowance ceases, and great hardship may be caused to the worker and his family. Employees also suffer from personal injury if they indulge into strikes n picketing; and the psychological and physical consequences of forced idleness. The threat of loss of employment in case of failure to settle the dispute advantageously, or the threat of reprisal action by employers also exists. Prolonged stoppages of work have also an adverse effect on the national productivity, national income. They cause wastage of national resources. Hatred may be generated resulting in political unrest and disrupting amicable social/industrial relations or community attitudes.Section 33 in The Industrial Disputes Act, 194733. 1[ Conditions of service, etc., to remain unchanged under certain circumstancesduring pendency of proceedings.-(1) During the pendency of any conciliation proceeding before a conciliation officer or aBoard or of any proceeding before 2[ an arbitrator or] a Labour Court or Tribunal orNational Tribunal in respect of an industrial dispute, no employer shall--(a) in regard to any matter connected with the dispute, alter, to the prejudice of theworkmen concerned in such dispute, the conditions of service applicable to themimmediately before the commencement of such proceeding; or(b) for any misconduct connected with the dispute, discharge or punish, whether bydismissal or otherwise, any workmen concerned in such dispute, save with the expresspermission in writing of the authority before which the proceeding is pending.(2) During the pendency of any such proceeding in respect of an industrial dispute, theemployer may, in accordance with the standing orders applicable to a workman
  4. 4. concerned in such dispute 2[ or, where there are no such standing orders, inaccordance with the terms of the contract, whether express or implied, between himand the workman],--(a) alter, in regard to any matter not connected with the dispute, the conditions ofservice applicable to that workman immediately before the commencement of suchproceeding; or(b) for any misconduct not connected with the dispute, or discharge or punish, whetherby dismissal or otherwise, that workman: Provided that no such workman shall bedischarged or dismissed, unless he has been paid wages for one month and anapplication has been made by the employer to the authority before which theproceeding is pending for approval of the action taken by the employer.1. Subs. by Act 36 of 1956, s. 21, for s. 33 (w. e. f. 10- 3- 1957 ). 2. Ins. by Act 36 of 1964, s. 18 (w. e. f. 19- 12-1964 ).(3) Notwithstanding anything contained in sub- section (2), no employer shall, duringthe pendency of any such proceeding in respect of an industrial dispute, take any actionagainst any protected workman concerned in such dispute--(a) by altering, to the prejudice of such protected workman, the conditions of serviceapplicable to him immediately before the commencement of such proceedings; or(b) by discharging or punishing, whether by dismissal or otherwise, such protectedworkman, save with the express permission in writing of the authority before which theproceeding is pending. Explanation.-- For the purposes of this sub- section, a"protected workman", in relation to an establishment, means a workman who, being 1[ amember of the executive or other office bearer] of a registered trade union connectedwith the establishment, is recognised as such in accordance with rules made in thisbehalf.(4) In every establishment, the number of workmen to be recognised as protectedworkmen for the purposes of sub- section (3) shall be one per cent. of the total numberof workmen employed therein subject to a minimum number of five protectedworkmen and a maximum number of one hundred protected workmen and for theaforesaid purpose, the appropriate Government may make rules providing for thedistribution of such protected workmen among various trade unions, if any, connectedwith the establishment and the manner in which the workmen may be chosen andrecognised as protected workmen.(5) Where an employer makes an application to a conciliation officer, Board, 2[ anarbitrator, a] labour Court, Tribunal or National Tribunal under the proviso to sub-section (2) for approval of the action taken by him, the authority concerned shall,without delay, hear such application and pass, 3[ within a period of three months fromthe date of receipt of such application], such order in relation thereto as it deems fit:] 4[Provided that where any such authority considers it necessary or expedient so to do, itmay, for reasons to be recorded in writing, extend such period by such further period asit may think fit: Provided further that no proceedings before any such authority shalllapse merely on the ground that any period specified in this sub- section had expiredwithout such proceedings being completed.]
  5. 5. Industrial Disputes ActIndustrial disputes are the disputes which arise due to any disagreement in an industrial relation. The termindustrial relation involves various aspects of interactions between the employer and the employees;among the employees as well as between the employers. In such relations whenever there is a clash ofinterest, it may result in dissatisfaction for either of the parties involved and hence lead to industrialdisputes or conflicts. These disputes may take various forms such as protests, strikes, demonstrations, lock-outs, retrenchment, dismissal of workers, etc.Some of the important causes of an industrial dispute are:-  Demand for higher wages and allowances.  Demand for payment of bonus and determination of its rate thereof.  Demand for higher social security benefits.  Demand for good and safer working conditions, including length of a working day, the interval and frequency of leisure and physical work environment.  Demand for improved labour welfare and other benefits. For example, adequate canteen, rest, recreation and accommodation facility, arrangements for travel to and from distant places,etc.  Besides, poor personnel management; conflicting legislative measure or government policies; and psychological factors such as denial of opportunity to the worker for satisfying his/ her basic urge for self-expression, personal achievement and betterment may also result in labour problems.In India, the Industrial Disputes Act, 1947 is the main legislation for investigation and settlement of allindustrial disputes. The Act enumerates the contingencies when a strike or lock-out can be lawfully resortedto, when they can be declared illegal or unlawful, conditions for laying off, retrenching, discharging ordismissing a workman, circumstances under which an industrial unit can be closed down and several othermatters related to industrial employees and employers.The Act is administered by the Ministry of Labour through its Industrial Relations Division. The Divisionis concerned with improving the institutional framework for dispute settlement and amending labour lawsrelating to industrial relations. It works in close co-ordination with the Central Industrial RelationsMachinery (CIRM) in an effort to ensure that the country gets a stable, dignified and efficient workforce,free from exploitation and capable of generating higher levels of output. The CIRM, which is an attachedoffice of the Ministry of Labour, is also known as the Chief Labour Commissioner (Central) [CLC(C)]Organisation. The CIRM is headed by the Chief Labour Commissioner (Central). It has been entrusted withthe task of maintaining industrial relations, enforcement of labour laws and verification of trade union
  6. 6. membership in central sphere. It ensures harmonious industrial relations through:-  Monitoring of industrial relations in Central Sphere;  Intervention, mediation and conciliation in industrial disputes in order to bring about settlement of disputes;  Intervention in situations of threatened strikes and lockouts with a view to avert the strikes and lockouts;  Implementation of settlements and awards.According to the Act, the term industrial dispute means "any dispute or difference between employers andemployers, or between employers and workmen, or between workmen and workmen, which is connectedwith the employment or non-employment, or the terms of employment or with the conditions of labour, ofany person". The basic objectives of the Act are:-  To provide a suitable machinery for the just, equitable and peaceful settlement of industrial disputes.  To promote measures for securing and preserving amity and good relations between employers and employees.  To prevent illegal strikes and lockouts.  To provide relief to workers against layoffs, retrenchment, wrongful dismissal and victimisation.  To promote collective bargaining.  To ameliorate the conditions of workers.  To avoid unfair labour practices.Under the Act, a statutory machinery has been constituted for conciliation and adjudication of industrialdisputes. It includes:-
  7. 7.  The Act provides for appointment of Conciliation Officers, by appropriate Government, charged with the duty of mediating in and promoting the settlement of industrial disputes. He/ she may be appointed for a specified area, or for specified industries in a specified area, or for one or more specified industries, either permanently or for a limited period. It is the duty of these officers to bring both the employees and employers together and help them to resolve their differences. If the dispute is settled, he/ she shall send a report, to that effect, to the appropriate Government. The appropriate Government may, as occasion arises, constitute a Board of Conciliation, which shall consist of a chairman and two or four other members, as the appropriate Government thinks fit. The Chairman shall be an independent person and the other members shall be persons appointed in equal numbers to represent the parties to the dispute. Where a dispute has been referred to a Board, it shall, without delay, investigate the dispute and do all such things as it thinks fit for the purpose of inducing the parties to come to a fair and amicable settlement of the dispute. The appropriate Government may, as occasion arises, also constitute a Court of Inquiry to inquire into any matter appearing to be connected with or relevant to an industrial dispute. It shall, thereafter, report about it to the Government ordinarily within a period of six months from the commencement of its inquiry. Such a court may consist of one independent person or of such number of independent persons as the appropriate Government may think fit and where it consists of two or more members, one of them shall be appointed as the chairman. The appropriate Government may constitute one or more Labour Courts to adjudicate industrial disputes relating to any matter specified in the second schedule like issues related to standing orders, discharge or dismissal of workers, illegality or otherwise of strikes and lockouts, withdrawal of any customary benefit, etc. and to perform such other functions as may be assigned to them under the Act. A labour court shall consist of one person only to be appointed by the appropriate Government. The appropriate Government may constitute one or more Industrial Tribunals to adjudicate industrial disputes relating to any matter, whether specified in the second schedule or third schedule, and to perform such other functions as may be assigned to them under the Act. A tribunal shall consist of one person only to be appointed by the appropriate Government. The third schedule covers the matters such as wages, bonus, allowances and certain other benefits, certain working conditions, discipline, rationalisation, retrenchment and closure of establishment. The Central Government may, by notification in the Official Gazette, constitute one or more National Industrial Tribunals to adjudicate an industrial dispute which, in the opinion of the Central Government, involve questions of national importance or are of such a nature that industrial establishments situated in more than one State are likely to be interested in, or affected by, such disputes. Such a tribunal shall consist of one person only to be appointed by the Central Government. The Act also makes it obligatory for an employer to set up a Grievance Settlement Authority (GSA) in an industrial establishment in which fifty or more workers have been employed in the preceding twelve months. This authority shall have the responsibility to settle industrial disputes concerning
  8. 8. an individual worker employed in that establishment.No reference can be made under the Act to Conciliation Boards, Labour Courts or Industrial Tribunals, unlessthe dispute has first been the subject of a decision of a Grievance Settlement Authority.Under the Industrial Disputes Act, 1947, the Central Government is the appropriate Government forinvestigation and settlement of industrial disputes in regard to the departmental undertakings of the CentralGovernment, major ports, mines, oil fields, cantonment boards, banking and Insurance Companies, LifeInsurance Corporation of India (LIC), Industrial Finance Corporation of India Limited, the Oil and NaturalGas Corporation Limited, the Indian Airlines, Air India, the Airport Authority of India and all air transportservices. While in relation to other industrial establishments, the State Government is the appropriateGovernment.Accordingly, Central Government Industrial Tribunals (CGITs) -cum- Labour Courts have been set upin different parts of the country. There are at present 17 CGITsto whom industrial disputes could bereferred for adjudication. These CGITs-cum-Labour Courts are at New Delhi , Mumbai (2 CGITs ), Bangalore,Kolkata, Asansol, Dhanbad (2 CGITs ), Jabalpur, Chandigarh, Kanpur, Jaipur, Lucknow, Nagpur, Hyderabad,Chennai and Bhubaneshwar. Out of these CGITs, 2 CGITs namely Mumbai-I and Kolkata have been declaredas National Industrial Tribunals.Besides, the Organization of the Chief LabourCommissioner( Central) acts as the primary conciliatoryagency in the Central Government for industrial disputes. There are the Regional Labour Commissioners(Central) and Assistant Labour Commissioners (Central) who on behalf of the Chief LabourCommissioner (Central) act as Conciliatory Officers in different parts of the country.(i) INDUSTRIAL DISPUTES ACT, 1947 The Industrial Disputes Act, 1947 came into existence in April 1947. Itwas enacted to make provisions for investigation and settlement of industrialdisputes and for providing certain safeguards to the workers. The Actcontains 40 sections divided into 7 chapters. Chapter – I deals with the title,definitions, etc. Chapter – II contains the various authorities under theAct. These authorities include Conciliation Officers, LabourCourts andTribunals. Chapter – III contains the main scheme of the Act such asreference of disputes to Labour Courts and Industrial Tribunals. Chapter – IVlays down the procedure, power and duties of the authorities constitutedunder the Act. Chapter – V contains provisions to prohibit strikes and lock-outs, declaration of strikes and lock-outs as illegal, and provisions relating tolay-off and retrenchment and closure. Chapter-VI contains provisions ofvarious penalties under the Act. Chapter–VII contains miscellaneousprovisions.
  9. 9. Section 12 in The Industrial Disputes Act, 194712. Duties of conciliation officers.-(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 hasbeen given, shall hold conciliation proceedings in the prescribed manner.(2) The conciliation officer shall, for the purpose of bringing about a settlement of thedispute, without delay, investigate the dispute and all matters affecting the merits andthe right settlement thereof and may do all such things as he thinks fit for the purpose ofinducing the parties to come to a fair and amicable settlement of the dispute.(3) If a settlement of the dispute or of any of the matters in dispute is arrived at in thecourse of the conciliation proceedings the conciliation1. Ins. by Act 48 of 1950, s. 34 and Sch. 2. Subs. by Act 36 of 1956, s. 9, for" Tribunal" (w. e. f. 10- 3- 1957 ). 3.Subs. by Act 46 of 1982, s. 9 (w. e. f. 21- 8- 1984 ). 4. Ins. by Act 45 of 1971, s. 3 (w. e. f. 15- 12- 1972 ).officer shall send a report thereof to the appropriate Government 1[ or an officerauthorised in this behalf by the appropriate Government] together with a memorandumof the settlement signed by the parties to the dispute.(4) If no such settlement is arrived at, the conciliation officer shall, as soon aspracticable after the close of the investigation, send to the appropriate Government afull report setting forth the steps taken by him for ascertaining the facts andcircumstances relating to the dispute and for bringing about a settlement thereof,together with a full statement of such facts and circumstances, and the reasons onaccount of which, in his opinion, a settlement could not be arrived at.(5) If, on a consideration of the report referred to in sub- section (4), the appropriateGovernment is satisfied that there is a case for reference to a Board, 2[ Labour Court,Tribunal or National Tribunal,] it may make such reference. Where the appropriateGovernment does not make such a reference it shall record and communicate to theparties concerned its reasons therefor.(6) A report under this section shall be submitted within fourteen days of thecommencement of the conciliation proceedings or within such shorter period as may befixed by the appropriate Government: 3[ Provided that, 4[ subject to the approval of theconciliation officer,] the time for the submission of the report may be extended by suchperiod as may be agreed upon in writing by all the parties to the dispute.]